National Minimum Wage

Chapter 3: Young People, Interns and Apprentices
compared with 18-20 year olds. Although employment rates fell and unemployment rates
rose for all age groups following the onset of recession, both employment and
unemployment rates appear to have levelled off for 21 and 22 year olds since the first quarter
of 2010. However, for 18-20 year olds, employment rates have continued to fall and
unemployment rates have continued to rise.
Figure 3.8: Employment and Unemployment Rates of 18-22 Year Olds Not in Full-time
Education, by Age, UK, 1999-2011
Employment rate (per cent)
80
75
70
65
60
55
50
45
40
35
30
1999 Q1
1999 Q3
Employment rates (LHS)
Unemployment rates (RHS)
2000 Q1
2000 Q3
2001 Q1
2001 Q3
2002 Q1
2002 Q3
2003 Q1
2003 Q3
2004 Q1
2004 Q3
2005 Q1
2005 Q3
18-20 21
2006 Q1
2006 Q3
Quarter
2007 Q1
2007 Q3
2008 Q1
2008 Q3
Start of
recession
2009 Q1
2009 Q3
Source: LPC estimates based on LFS Microdata, quarterly, four-quarter moving average, UK, Q2 1998-Q3 2011.
22
2010 Q1
2010 Q3
2011 Q1
2011 Q3
3.43 As well as analysing earnings and labour market activity, we commissioned new research for
this report on 21 year olds. Crawford, Greaves, Jin, Swaffield and Vignoles (2011) found that
extending the adult minimum wage to include 21 year olds had no significant effect on the
likelihood of a 21 year old being in FTE, in work, or NEET. There was therefore no evidence
that this change in entitlement had affected the education or labour market choices of 21
year olds compared with 20 year olds.
3.44 From the data presented above, there continues to be strong evidence that the earnings and
labour market position of 21 year olds more closely resembles that of older workers than
younger workers. Further, it does not appear to be the case that the movement of 21 year
olds from the Youth Development Rate to the adult rate of the minimum wage in 2010 has
had an adverse impact on their employment. We will continue to analyse new data as they
become available, and monitor any further related research evidence. We now turn to
another recent development in the labour market for young people: the growth in the number
of interns.
50
45
40
35
30
25
20
15
10
5
0
Unemployment rate (per cent)
85