Jim is an Associate Editor at Wonkhe

Subscribers to the Wonkhe Daily will know that we recently flagged a new report that marks the start of a three-year research programme at the Resolution Foundation investigating the links between the labour market and mental health outcomes of young people.

Much of the analysis and research on “young people” is frustrating from my point of view because it frequently fails to separate out those going into higher education and those that don’t. Given where I work I would say that – but more broadly it’s helpful when we sieve and filter because there may be things that higher education is doing right, or things that it is making worse.

In its report, generally RF finds that young people have been hard hit compared to other age groups during the pandemic when it comes to both economic security and mental health. But it also finds that in both respects, the last year has exaggerated longer-term trends:

Pre-crisis, young people were more likely to be in an insecure job, and substantially more likely to have a mental health problem, than ten years ago. Without policy action, the labour market and mental health impacts of the pandemic could persist, driving down young people’s living standards in the process.

That’s interesting because there’s some notable findings in the launch report that tell a story about the coalitions higher education reforms. Generally, we tend as a sector to pat ourselves on the back about increasing participation in higher education, partly because of the human capital arguments. But we focus less on some of the downsides and potential harms we might be causing.

And given it feels like we’re on the brink of a new higher education funding system for a new decade, interrogating what happened during the decade from as many perspectives as possible makes lots of sense.

What happened?

A comparison between the labour market status of 18-24-year-olds in 2000 and on the eve of the Covid-19 crisis shows that the share of young people in employment and not studying has fallen – from 57 per cent to 52 per cent. That is easily explained by the growing share of this age group in full-time education – in 2019, almost one-in-three (32 per cent) young people were studying full-time compared to less than one-quarter (24 per cent) at the turn of the century.

But beneath the surface there’s real nuance. For example if you split the above out by sex, you find that young men have not benefited from the structural shift away from employment towards higher education to the same extent as women – and in fact a slightly larger share of young men were not in work or education in 2019 than in 2000 (16 per cent compared to 14 per cent respectively).

Generally, not only are young people less likely to be in employment today than they were two decades ago, but the type of work they do has changed too. Here RF has plotted the share of 18-24-year-olds in insecure work, and present it alongside results for workers in older age groups.

Young people were more likely than older people to be in insecure work prior to the crisis (25 per cent compared to 21 per cent), they were 66 per cent more likely to be in insecure work in 2019 as they were in 2000, and the growth in insecure work for young people has been driven by agency work and zero-hours contracts.

The debate about zero-hours contracts is that they suit employers and are exploitative – while others argue that they actually suit some workers, and students are frequently cited in that argument. So to get underneath the numbers RF cross-tabulated insecure work with indicators of dissatisfaction where possible – like those who say they are in a temporary job because they can’t find a permanent one, or would prefer to be employed rather than in self-employment.

Doing so halves the levels, but retains the differences between age groups – and the relative rise following the 2009 financial crisis is far starker:

Then they build on that and split out 18-24-year-olds into students and non-students. It shows that students are twice as likely to be in insecure work than their non-student counterparts – 20 per cent of students were on some form of insecure contract at the end of 2019, compared to 10 per cent of 18-24-year-olds who were not in FT education.

As RF puts it:

There is a debate to be had over whether these types of work are all bad, but they are not consistent with financial security or the kinds of training opportunities that young people need to improve their human capital.”

They are, as something to be experienced alongside study, bad jobs.

Mental health and wealth

On the mental health question, problems among the young were on the rise pre-crisis – and young people were more likely than any other age group to have a clinical mental health condition prior to the crisis:

The dominant narratives that explain these phenomena in the press tend to be things like a delay in gaining financial independence and autonomy from parents, or the rise of social media exposing them to types of cyberbullying. But as you’d expect, RF is interested in the changing labour market experience of young people and any potential link to mental health.

Perhaps unsurprisingly, those who were in work or education were consistently less likely to have a mental health problem than those in neither – a finding that RF points out is consistent with evidence which shows work and education is beneficial for mental health (and/or that mental health plays a key role in ensuring people can gain, and remain in, employment or study):

But here’s a thing. Although the group with the highest rate of problems are those who are neither working nor studying, full-time students have seen an increase in mental health problems in recent years that has widened the gap with those who are in employment and not studying. Over the decade students have had consistently higher rates of mental health problems than those who are in employment (and not studying). By 2018-2019, the share of working 18-24-year-olds with a mental health problem had risen to 26 per cent, while the share of students with a mental health problem had increased to almost a third (32 per cent).

Is that a compositional issue – in other words, does the rising number of students explain it? RF has crunched the numbers and doesn’t think so:

Upsides and downsides

So overall, expanding participation in higher education has increased student numbers among 18-24-year-olds, but they’ve experienced significant increases in mental health problems – and insecure employment puts them at a higher risk of poor mental health.

The reason why all of this might matter quite a bit is the pandemic, the major impact on student and graduate employment, and what happens next. We already know from other RF work that among under 25s, graduate unemployment rose during Covid by 33 per cent (and by 20 per cent for those with lower quals).

But to try to take a run at some longer-term predictions of problems out of the pandemic, RF looked at what happened coming out of the financial crisis in 2009. Rates of insecure work rose dramatically, with young people at the sharp end of this trend – and which then naturally became a long term feature of the labour market.

RF reckons that out of the pandemic it’s plausible that employers will make greater use of atypical workers (like those on zero-hours and temporary contracts) to build up capacity while avoiding costly commitments to hire (and indeed house) permanent staff. The press is full of stories about a permanent shift to home working – which has worked out so well for students’ mental health while at university this year.

Insecure forms of work both come with a pay penalty of 29-69p per hour compared to work on more standard contracts, and are associated with poorer mental health for young people compared to those in standard employment. Add that to the massive hit to young people’s mental health already seen during the pandemic, and you get the title of the report – “Double Trouble” – as both the labour market and mental health crises could end up having deep scarring effects far beyond the ending of social-distancing restrictions.

RF says that its findings suggest a two-pronged approach is required. It says:

  • “Direct government investment to create jobs in sectors such as social care and green jobs would provide opportunities for young and older workers alike;
  • “Ongoing support may be needed in the hardest-hit sectors while social distancing unwinds, esp in leisure and hospitality in which young people are more likely to work;
  • “Kickstart should be extended beyond the end of 2021 in recognition of renewed restrictions since the scheme was announced;
  • “The government should not lose sight of job quality – an Employment Bill, would provide an opportunity to raise standards by enhancing workers’ rights to request longer hours, advance notice of their working hours, and compensation for shifts cancelled at the last minute – so young people have the opportunity to take up jobs that will have positive impacts on their mental health;
  • “Expanding funding for mental health;
  • “Ensuring that young people have sufficient benefit support when their incomes are affected by unemployment, working in low-pay jobs or illness.

They’re all interesting ideas, but we should go further and recognize the agency of the sector here. Universities have an important role to play in “good work” both for students and graduates – partly in relation to their own employment, partly in relation to partnerships, partly in relation to support for entrepreneurship, and partly in connection with their supply chains.

It’s remarkable in many ways that both universities and their SUs aren’t deeply involved in defining, delivering and stimulating “good work” for students and graduates. If nothing else students who do work will spend more time doing so than they will in the classroom.

A real agenda for this aspect of the student experience ought to span availability, pay, precarity, terms and conditions, investment in learning and development, culture, trade union membership and rights, internships and work experience, diversity and so on. Where are the minimum standards? Where are the awards for good local employers? Where are the campaigns?

More broadly, I’ve said it before and I’ll say it again – we really are looking at “lost generation” scale stuff here, and yet the only lobbying on it we’ve heard from the sector has been in the context of careers advice and return to campus, rather than properly scaled economic intervention solutions to prevent the deep scarring that this could all cause.

At Wonkfest Digital on 9-10 June we’ll be thinking through how universities can Build Back Higher after the Covid-19 pandemic. Find out more about Wonkfest Digital and get your ticket here

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