In contrast to the big differences in employment profiles by age, the gender employment gap is similar in the UK and in the frontier countries. In the UK, 71.9% of working age women are employed compared to 78.4% of working age men (a 6.6 percentage points gender employment gap). In the frontier countries, 78.3% of women are employed, compared to 85.0% of men (6.8ppts difference). Of the four frontier countries, only Iceland has a smaller gender employment gap than the UK. Closing the gender employment gap in the UK would be a big step to the 80% employment rate target but would not take the UK all the way. International examples suggest that the UK will likely need to raise employment rates for men and women, if it wants to hit the 80% target.

Table 2 shows employment rates near retirement age and normal retirement ages (the age at which you can claim a full state pension) in the different countries. In all five countries the normal retirement age is over 64, so differences in normal retirement ages are unlikely to explain the difference in employment rates. It also shows that the employment gap between the UK and the frontier countries is already wide for 55–59-year-olds, more than five years before normal retirement age.

Instead, ill health and early retirement are likely to be the two key reasons for lower employment at older ages in the UK than in the frontier countries.  Two-thirds of 50–64-year-olds who are not working have either taken early retirement or are not working due to ill health. Official statistics suggest that the rise in people not working due to ill health has been particularly stark for 55-64-year-olds. 11.3% of 55–64-year-olds were inactive due to ill health in 2023, up from 8.9% in 2019. If the government wants to increase employment for older people, it will likely need to take measures that reduce the number of people not working due to ill-health or encourage people not to take early retirement.

History suggests higher employment rates for older people (and particularly men) are possible.  In 1975, 86% of men aged 50-64 were employed – compared to 75% now, despite significant improvements in life expectancy since 1975 (Banks, Emmerson and Tetlow, 2019).  

When considering employment rates for young people, it is useful to separately consider young people in and out of education. Figure 4 shows employment rates for 15–24-year-olds for the UK and the four frontier countries in 2019 and 2023 by whether they are in education. Interestingly, the UK stands out for having low employment rates amongst young people in education. In 2023, 41% of 15-24-year-olds in education in the UK were in employment, compared to 59% on average across the frontier countries and over 70% in the Netherlands. This partly reflects differences in the education systems. In the Netherlands, 69% of students in upper secondary education (typically 15–19-year-olds) are engaged in vocational education, which typically involves 4 days in the place of education and 1 day in the workplace. The government may be able to make changes to the education system to encourage more people to work while studying, although naturally this comes with potential trade-offs with longer-term outcomes.  

The UK also has lower employment rates for young people not in education, but the gaps here are smaller. 74% of 15-24-year-olds who are out of education are in work in the UK, compared to 82% on average across the frontier countries. Nevertheless, this may be a particular concern to the government as young people in education are likely to transition into productive work in future, whereas spending a significant amount of time not in education, employment or training as a young person may result in lasting scarring effects on future life outcomes. A particularly worrying trend in the UK is the increase in 18-24-year olds stating that they are not working due to ill health- from 143,000 in 2019 to 193,000 in 2023, and the related increase in young people claiming health-related benefits. Finding a way to support these young people into work could improve their future life outcomes and make significant fiscal savings.

El gobierno podría intentar aumentar el empleo de muchas maneras. Este análisis sugiere que la vía más plausible para lograr una tasa de empleo del 80% consiste en mejorar las tasas de empleo de quienes están al principio y al final de sus carreras, reducir el número de personas que no trabajan debido a problemas de salud y reducir las desigualdades geográficas en las tasas de empleo.

El libro blanco del gobierno titulado "Get Britain Working" (Hagamos que Gran Bretaña trabaje) establece un diagnóstico de las barreras para un mayor empleo que coincide en líneas generales con este análisis. Incluye una serie de políticas para intentar abordar estas barreras, incluidas intervenciones sanitarias destinadas a reducir la inactividad relacionada con la salud y una garantía para la juventud, que establece el objetivo de que todos los jóvenes de entre 18 y 21 años estén en educación o trabajando. Sin embargo, en relación con el ambicioso objetivo de conseguir que 2,2 millones más de personas trabajen, la financiación fue bastante modesta (240 millones de libras esterlinas) y gran parte de ella se destinó a una selección de áreas "pioneras". Si bien hay motivos para probar intervenciones para comprobar si son eficaces, es probable que el gobierno deba ampliarlas para que den como resultado un progreso significativo hacia su ambición. Y, por supuesto, gran parte de esto simplemente está fuera del control directo de las políticas: los shocks macroeconómicos, los cambios en las normas sobre los padres o las mujeres en el trabajo o los cambios en el mercado laboral debido a la IA podrían hacer que el objetivo sea mucho más fácil (o más difícil) de alcanzar.