Occasional Paper 59 - The trouble with inactivity

Despite the recent concern, the current inactivity rate is now back to where it was in 2018 - before the pandemic - and well below the level seen at the tail end of the Great Recession of 2008-2011. [...] The dotted line in the graph shows the inactivity rates for those whose youngest child is between the aged 1 or 2, the target of recent policy changes extending free child care to children under the age of 3. [...] In around 5% of all working age households, everyone is inactive and sick, though the pattern of sickness across households over time, mirrors the pattern for individuals – a steady improvement on the 1990s, with a small upturn in the share of sick households around the time of the pandemic. [...] Most of the improvement in inactivity over the first twenty years of data is driven by a fall in the share of the group who had worked before but did not like work. [...] Each dot on the graph plots the change in gross monthly wages and the change in the inactivity rate for 16-64 year olds in each of 41 NUTS2—level areas of the UK (roughly corresponding to areas with a population of around 1.5 to 2 million).