A report exploring labour force participation in the UK from the Covid 19 pandemic to a decade ahead.

In 2023, almost three years on from the advent of Covid-19, economists and policymakers are trying to understand the lasting impacts of the pandemic.

One area of focus in recent months has been labour supply: despite unemployment reaching historic lows, a rise in economic inactivity means that the UK employment rate remains one percentage point lower than pre-pandemic (the employment rate for 16-64-year-olds is down from 76.6 per cent in December-February 2020 to 75.6 per cent in the final three months of 2022). This is now a key focus for policymakers, and so it is crucial to understand the causes properly.

The legacy of the Covid-19 pandemic in the UK has not been high unemployment as was feared in 2020, but an increase in economic inactivity of over half a million workers, concentrated among older workers and those with long-term health conditions.

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