Economic inactivity and ill health in Scotland

The economic inactivity rate represents the proportion of the population that is not in work and is not ready to start work in the near future. While some types of inactivity are not causes for concern, like being in further education, others like poor health may reflect barriers to participation in paid work.Rates of inactivity in Scotland and the rest of the UK both trended downwards from 2001 to about 2015, when Scotland’s began to rise and the rest of the UK’s continued to fall. When the UK’s overall rate of inactivity rose during the pandemic, research focused on the potential roles of Long Covid and early retirement prompted by disillusionment with work. However, Scotland’s inactivity rate actually fell during the pandemic, starting to rise again in 2023.Scotland’s recent trend in inactivity has therefore been very different from the UK, likely reflecting different underlying drivers. One potential reason for this divergence is differences in population health and health inequalities. This report therefore explores labour market survey data and NHS wait times data to understand the relationship between health and inactivity in Scotland.This report starts by comparing Scotland to the rest of the UK on a number of measures, including rates of inactivity attributed to poor health, prevalence of limiting long-term illnesses (LLTIs), and correlations between LLTIs and inactivity. It then explores variation in health and inactivity within Scotland by area, age, gender, and level of education. Finally, the report summarises the relationship between healthcare access (proxied by A&E wait times) and inactivity, distinguishing between the overall trend from 2012-2022 and the pre-pandemic period. The briefing concludes with a discussion of key policy considerations.Key findings include:

• Poor health explains a larger proportion of economic inactivity in Scotland than in the rest of the UK, reflecting both a higher proportion of the population with long-term conditions or disabilities and a higher correlation between long-term conditions or disabilities and inactivity.
• A higher proportion of economic inactivity is attributed to permanent ill health or disability by men over 24 than by women in Scotland. However, this reason has trended downward for men over 24 since 2001, but increased for women of all ages in the last five years.
• NHS wait times for A&E services are leading indicators of healthcare access. Rates of A&E attendances not meeting the four-hour statutory target have increased sharply since the start of the pandemic in many health boards, indicating reduced healthcare access in these areas.
• Reduced healthcare access in the preceding year is correlated with a higher probability of individuals reporting long-term health conditions or disabilities and economic inactivity due to poor health or disability even when controlling for factors like age, gender, education, and number of children in the household.

The briefing describes several key considerations for research and policy. These include:

• UK-wide research on inactivity may be of limited relevance in Scotland; Scotland-specific data and research are needed to fully understand the relationship.
• To fully understand the impact of policy decisions, labour market policy should consider health drivers, and health policy should consider employment outcomes.
• The relevant policy levers to reduce rates of inactivity and inactivity due to poor health or disability may also differ depending on the targeted group (e.g., different age groups).

The report concludes by laying out some key questions for further research on this topic. These questions include:

• How do health policy changes affect inactivity or other employment outcomes?
• What types of health policy changes have the largest impact on inactivity or other employment outcomes?
• What types of employability services would best support people not working due to poor health into work?
• What impact might an increase in rates of poor health have on demand for other services (e.g., social care) and on the Scottish Government’s fiscal position?

This briefing is published in collaboration with the Scottish Parliament Information Centre (SPICe) as part of their Academic Fellowship Scheme.