Going Solo: Does self-employment offer a solution to youth unemployment?

The UK has the largest number of self-employed under 25 in the EU – and three times more than in Germany. The UK accounts for nearly one in four of all self-employed under 25’s in the EU, and as such, it is clear that for some young people self-employment is a welcome and viable employment option.But dig below the headlines, and the picture becomes more nuanced. The UK has so many self-employed young people because we have an unusually high share of young people in work by EU standards. Higher youth labour market numbers skew the figures, but rates of self-employment among young people are actually similar to the EU and OECD averages.

Furthermore, there was no clear link found between the prevalence of self employment among young people and overall performance of youth labour markets across the EU. Realistically, policies that focus on getting young people into self-employment can only make a small contribution to reducing youth unemployment. Most young people will be better served by policies helping them get into salaried employment, where they can learn the skills and make the connections to help them set up successful businesses later in life.

Authors: Katy Jones, Ian Brinkley and Lizzie Crowley

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