Economic inactivity has been increasing in the UK. This Insight discusses why older workers may have left the workforce and whether they might return to work.
Economic inactivity – the proportion of people who are neither working nor looking for work – has risen since the start of the coronavirus pandemic.
Rising economic inactivity occurred across all G7 countries after lockdown restrictions were introduced. However, this has largely reversed in all countries except the UK, where it has continued to rise.
The Government has said a review of economic inactivity is due to be published shortly.
This Insight looks at how ill-health is affecting economic inactivity.
Long-term sickness is the most common reason for leaving the workforce
Long-term sickness accounted for 28% of total inactivity at the end of January 2023, up from 23% at the start of 2019, making it the most common reason for economic inactivity. A further 2% of economic inactivity is due to temporary sickness.
As shown in the chart below, the number of working age people who can’t work because of long-term sickness has been increasing since before the coronavirus pandemic. It rose from 2 million at the start of 2019 to 2.5 million as of November 2022 to January 2023.
Since the pandemic started in early 2020, this number has increased by around 400,000.
Older people are leaving the workforce faster than younger people
The biggest increase in economic inactivity due to long-term sickness, as well as for other reasons, has been among people over the age of 50. However, as shown in the chart below, increases can be seen across all ages.
As of October to December 2022, 54% of people who were economically inactive due to long-term sickness were aged 50 to 64 (around 1.4 million people).
This in part reflects how the prevalence of disability and long-term health conditions increases with age, although the recent growth in numbers is larger than might be expected due to ageing factors alone.
The increase in survey-reported long-term sickness is reflected in Department for Work and Pensions data on benefit claims. The number of 50-to-64-year-olds claiming the main types of benefits associated with long-term illness or disability increased by around 400,000 between August 2019 and August 2022–from 2.3 million to 2.7 million claimants.
Does poor health explain the rise in economic inactivity?
Recent attempts to explain the rise in economic inactivity among older age groups have looked at the effects of health-related factors. Considerations include access to healthcare, the possible impact of long Covid and long-term trends in declining health.
The Health Foundation’s article asking Is poor health driving a rise in economic inactivity? discusses these issues further.
Access to healthcare
Some commentators argue that rising economic inactivity may be due to health conditions worsening because of poor access to healthcare provision (for example, Lane Clarke and Peacock’s report on due to ill-health (PDF) and the Financial Times article on chronic illness in the workforce).
We lack data on the number of working age people on hospital waiting lists to verify this. However, it is true that the overall numbers on hospital waiting lists have been unprecedentedly high in recent months, as have the numbers experiencing very long waits.
In addition, Office for National Statistics (ONS) estimates of why those aged 50–65 years have left employment found that almost one in five (18%) who had left work since the start of the pandemic (March 2020) reported that they were currently on a waiting list for NHS medical treatment. This compares with around 13% of the population as a whole.
Long Covid, in which symptoms persist months after a Covid-19 infection, could partly explain the observed increases in economic inactivity.
The latest ONS estimates of the prevalence of long Covid in the UK report around 2 million people had ongoing symptoms at least 12 weeks after an infection (as of January 2023). Around 380,000 people reported that their symptoms limited day-to-day activities substantially. The age group most affected by long Covid is 35-to-69-year-olds, which partly aligns with the larger increases in economic inactivity.
A 2022 report by the Institute for Fiscal Studies on long Covid and the labour market estimated that up to 110,000 people in the UK were not working because of long Covid. However, these people could potentially return to the labour market after a period of sick leave. This is a substantial number but isn’t large enough to explain all the increase in economic inactivity.
Longer-term health trends
There is some evidence to suggest a decline in the overall health of the UK population.
The most recent estimates of life expectancy in the UK show that improvements in life expectancy at birth have slowed over the past decade.
Other ONS measures of national wellbeing suggest a decline in self-reported assessments of health.
In 2020/21, 45% of people reported being mostly or completely satisfied with their health, down from around 52% in 2010/11. Over the same period people reporting experiencing depression and anxiety increased from around 18% in 2010/11 to 24% in 2020/21.
In 2021/22, over a third (35%) of working age people reported a long-term health condition. Over a fifth (22%) of people reported that they had a long-term condition which limited their ability to carry out day-to-day activities, classifying them as disabled.
The ONS analysis of people who were economically inactive due to long-term sickness found that many had already left the workforce for another reason, such as looking after the family or home, or retiring, but had recently switched to reporting long-term sickness as the main reason for their inactivity.
Evidence suggests that health factors have affected recent rises in economic inactivity, although they are clearly not the only factor at play.
See more Library Insights discussing economic inactivity:
- House of Commons Library, UK Labour Market Statistics, February 2023
- House of Commons Library, Coronavirus: Impact on the labour market, August 2022
- House of Commons Library, Will more economic inactivity be a legacy of the pandemic?, February 2022
- Find all of the Library’s research on the Spring Budget 2023 in one place
About the authors: Esme Kirk-Wade and Rachael Harker are statistics researchers at the House of Commons Library, specialising in areas of health and social security.
Ahead of the 2023 Spring Budget on 15 March, this briefing looks at the UK’s economic situation, economic forecasts, and the public finances.
Economic inactivity has been increasing in the UK. This Insight discusses why young people may not be entering the workforce after leaving education.