By Jerry Jones, Michael Joyce and Jonathan Thomas of the Bank's Structural Economic Analysis Division.
According to the Labour Force Survey, about 20% (approximately 7.5 million) of the non-student working-age population were not in paid employment in 2002. Of these people about one in five were classified as unemployed, with the remainder labelled as 'inactive'. Despite this categorisation, however, some groups in the so-called inactive population are as likely to move into employment as those classified as unemployed, so any comprehensive measure of labour availability needs to incorporate information on the characteristics of the non-employed pool as a whole. This paper describes the key trends in the demographic and skill structure of the non-employed population since the mid-1980s and contrasts them with those in employment. It also attempts to draw out the implications of these trends for overall labour availability, building on recent Bank research which models individual transition rates from non-employment into employment.