26: Is ill health driving economic inactivity, and what can be done about it? – with Sarah O’Connor and Professor James Banks

We're all familiar with some of the challenges ahead in the UK: a fiscal squeeze, limp productivity, a labour shortage and an ageing population with increasing needs. 

As Andy Haldane put it in our recent REAL Challenge lecture, two routes to prosperity for the UK include increasing the number of workers and their productivity. But both of these routes now appear to be hampered by increasing ill health. 

Since the pandemic, 600,000 working people have become economically inactive – that’s the size of the city of Manchester taken out of the economy. Two-thirds are the over 50s who've left and aren't looking for work. And at the other end of life, younger people entering work are reporting markedly more ill health due to depression and anxiety, and more young men in particular are economically inactive.

Can we carry on like this if our economy is to recover? Or is it now time for us to get serious about these trends, and how?

To discuss, our chief executive Dr Jennifer Dixon is joined by: 

Sarah O’Connor, employment columnist at the Financial Times. 

James Banks, Professor of Economics at the University of Manchester and Senior Research Fellow at the Institute for Fiscal Studies.

Show notes

Health is wealth? REAL Challenge annual lecture (2022) The Health Foundation 

Is poor health driving a rise in economic inactivity? (2022) The Health Foundation 

Proportion of UK workers on low pay at lowest level since 1997 (2022) Financial Times 

There is a deepening mental health recession (2022) Financial Times 

Is worsening health leading to more older workers quitting work, driving up rates of economic inactivity? (2022) IFS 

The rise in economic inactivity among people in their 50s and 60s (2022) IFS 

Half a million more people are out of the labour force because of long-term sickness (2022) ONS 

Reasons for workers aged over 50 years leaving employment since the start of the coronavirus pandemic: wave 2 

New Polling for Phoenix Insights (2022) Public First 

Mental health conditions, work and the workplace (2022) Health and Safety Executive 

Labour Market Statistics, October 2022 (2022) Institute for employment studies 

Economic inactivity and the labour market experience of the long-term sick (2022) Jonathan Haskel and Josh Martin (this piece is currently a work in progress and a preliminary download has been made available by the authors)