account arrow-down-linearrow-down-small arrow-downarrow-download arrow-left-small arrow-leftarrow-link arrow-rightarrow-upawarded books calendar close-modal closedate delete document education emailevent facebookhamburger impact instagramjustice linkedin location-outline location opinion page phonepinterestplay plusplyr-pause plyr-play post preview project publication reports search-bigsearch share star-full star-open startime twitterwelfare youtube zoom-in zoom-out

The crisis cohort’s pay and career prospects have been scarred for up to a decade

By Nuffield Foundation

The ‘crisis cohort’ who entered the world of work in the midst of the financial crisis continued to face higher unemployment, lower pay and worse job prospects up to a decade later, compared to other young people entering work before or after the downturn.

This is according to a new Nuffield-funded report published today by the Resolution Foundation. Growing pains is the first major examination of the impact of the post-financial crisis downturn on the young people who were unlucky enough to leave education in its midst.

It notes that Britain avoided a repeat of the mass youth unemployment (among 18-29 year olds) that endured for much of the 1980s. Instead the pain was spread more evenly across young people, the majority of which experienced a prolonged pay squeeze. But the analysis shows that the crisis cohort have experienced different scarring effects from the last downturn compared to other young people.

These include:

  • Lower employment for low-skilled workers – The probability of a young person qualified only to GCSE level finding employment fell by over 30 per cent as a result of leaving education during the recent downturn. This effect endured for almost a decade.
  • Lower-paid jobs for graduates – Graduates entering the labour market during the financial crisis had a 30% higher chance of being in a lower paying occupation one year after graduating, and remained more likely to be in low-paid work a full seven years later.
  • Reduced pay – The crisis cohort of graduates experienced a 6% reduction in pay, relative to those starting before or after the crisis, while their wages took up to seven years to recover. For lower-skilled workers, their potential pay reductions were protected to some extent by the minimum wage.

The Resolution Foundation says that policy makers should be focused on these lasting effects from the financial crisis, and what they mean for the crisis cohort’s prospects today. It adds that nine years on from the last recession, Britain should be preparing for a future downturn, and thinking about how to respond to any future labour market scarring.

This could include reformed active labour market policies that focus on the nature of the jobs young people find themselves in, as well as planning for the potential of youth unemployment being higher in the next crisis than it was in the last one. Such planning could include targeted jobs support, and adjusting the implementation of Universal Credit in the face of higher unemployment.

Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, said: 

“Britain was able to avoid a repeat of the mass youth unemployment scarring that characterised the 1980s in the wake of the financial crisis.

“But the ‘crisis cohort’ who had the misfortune to enter the world of work in the midst of the last downturn still faced significant scarring effects. Low-skilled workers faced a higher risk of unemployment, while graduates were more likely to trade down the types of jobs they did, with their pay and prospects stunted as a result.

“These scarring effects have stayed with the crisis cohort for up to a decade, reducing their living standards at a time when they may be facing the additional financial strains of buying a home, or bringing up kids.

“Politicians and policy makers owe it to those young people who leave education during downturns to mitigate the negative effects of this bad timing through active labour market policies, including targeted jobs support.”

More about this project


By Nuffield Foundation

Explore our projects

Girl with mum reading School availability parental labour supply and family wellbeing
New

Welfare | 2020 - 2021

COVID-19 and school availability: impact on parental labour supply and well-being

View project
New

Welfare | 2020 - 2022

Pension saving over the lifecycle

View project
Medical-professional-massages-patient-knee-Understanding-joint-replacement-surgery-decision-making-for-older-patients-PROJ
In progress

Welfare | 2020 - 2023

Supporting older patients to make informed decisions about knee surgery

View project
New

Education | 2020 - 2022

Evaluating the short- and medium-term impacts of Sure Start

View project
Older-man-reads-textbook-Assembling-data-jigsaw-Greater-Manchester-PROJ
In progress

Welfare | 2020 - 2024

Assembling the data jigsaw: powering robust population research in MSK disease

View project
Woman-medical-professional-treats-patient-impact-MSK-conditions-outcomes-other-illnesses-PROJ
In progress

Welfare | 2020 - 2022

The impact of musculoskeletal conditions on outcomes of other illnesses

View project
Female-nurse-sees-patient-in-office-Integrating-enriched-longitudinal-data-North-Staffordshire-Stoke-on-Trent-PROJ
In progress

Welfare | 2020 - 2025

Enriched data integration for population musculoskeletal health intelligence

View project
Older-man-and-woman-walk-together-Geographical-mapping-prevalence-outcomes-MSK-conditions-Wales-Scotland-PROJ
In progress

Welfare | 2020 - 2022

Mapping rheumatic and musculoskeletal disease in Scotland and Wales

View project
In progress

Welfare | 2020 - 2022

Older people in England: the geography of challenges and opportunities

View project
In progress

Welfare | 2020 - 2022

Vulnerability, migration and well-being: experiences, perceptions and barriers

View project
Senior-woman-enjoys-video-call-on-smartphone-Social-cohesion-in-context-of-COVID-19-PROJ
In progress

Welfare | 2020 - 2021

Social cohesion in the context of COVID-19

View project
Toddler-gleefully-eats-baked-beans-How-COVID-19-is-affecting-food-security-proj
In progress

Welfare | 2020 - 2021

How the COVID-19 crisis is affecting food security

View project
New

Welfare | 2020 - 2022

Pension saving over the lifecycle

View project
Girl with mum reading School availability parental labour supply and family wellbeing
New

Welfare | 2020 - 2021

COVID-19 and school availability: impact on parental labour supply and well-being

View project
New

Education | 2020 - 2022

Evaluating the short- and medium-term impacts of Sure Start

View project
In progress

Justice | 2020 - 2022

Youth custody: Educational influences and labour market consequences

View project
In progress

Welfare | 2020 - 2022

Vulnerability, migration and well-being: experiences, perceptions and barriers

View project
Toddler-gleefully-eats-baked-beans-How-COVID-19-is-affecting-food-security-proj
In progress

Welfare | 2020 - 2021

How the COVID-19 crisis is affecting food security

View project
In progress

Welfare | 2020 - 2022

Older people in England: the geography of challenges and opportunities

View project
Senior-woman-enjoys-video-call-on-smartphone-Social-cohesion-in-context-of-COVID-19-PROJ
In progress

Welfare | 2020 - 2021

Social cohesion in the context of COVID-19

View project
Teenage-girl-looks-at-smartphone-next-to-laptop-Growing-up-under-COVID-19-PROJ
In progress

Education | Welfare | 2020 - 2021

Growing up under COVID-19

View project
In progress

Welfare | 2020 - 2022

COVID-19 social study

View project
In progress

Welfare | 2020 - 2021

COVID realities: families on low incomes during the pandemic

View project
Woman-looks-at-smartphone-screen-How-the-UK-public-gets-information-about-COVID-19-PROJ
In progress

Welfare | 2020 - 2020

How the UK public gets information about COVID-19

View project
New

Welfare | 2020 - 2022

Pension saving over the lifecycle

View project
Girl with mum reading School availability parental labour supply and family wellbeing
New

Welfare | 2020 - 2021

COVID-19 and school availability: impact on parental labour supply and well-being

View project
New

Education | 2020 - 2022

Evaluating the short- and medium-term impacts of Sure Start

View project
In progress

Justice | 2020 - 2022

Youth custody: Educational influences and labour market consequences

View project
In progress

Welfare | 2020 - 2022

Vulnerability, migration and well-being: experiences, perceptions and barriers

View project
Toddler-gleefully-eats-baked-beans-How-COVID-19-is-affecting-food-security-proj
In progress

Welfare | 2020 - 2021

How the COVID-19 crisis is affecting food security

View project
In progress

Welfare | 2020 - 2022

Older people in England: the geography of challenges and opportunities

View project
Senior-woman-enjoys-video-call-on-smartphone-Social-cohesion-in-context-of-COVID-19-PROJ
In progress

Welfare | 2020 - 2021

Social cohesion in the context of COVID-19

View project
Teenage-girl-looks-at-smartphone-next-to-laptop-Growing-up-under-COVID-19-PROJ
In progress

Education | Welfare | 2020 - 2021

Growing up under COVID-19

View project
In progress

Welfare | 2020 - 2022

COVID-19 social study

View project
In progress

Welfare | 2020 - 2021

COVID realities: families on low incomes during the pandemic

View project
Woman-looks-at-smartphone-screen-How-the-UK-public-gets-information-about-COVID-19-PROJ
In progress

Welfare | 2020 - 2020

How the UK public gets information about COVID-19

View project
Reported

Welfare | 2013 - 2017

IFS Green Budget 2013 – 2016

View project
Reported

Welfare | 2013 - 2016

Data about fathers in birth cohort studies (Life Study)

View project
Reported

Welfare | 2017 - 2017

General Election 2017

View project
Reported

Justice | Welfare | 2015 - 2018

Bridging the Evidence Gap in Family Proceedings

View project
Reported

Welfare | 2018 - 2018

Interdisciplinary conference on evidence use in policy

View project
Reported

Welfare | 2019 - 2020

Valuing data: foundations for data policy

View project
Reported

Welfare | 2018 - 2019

Overview of the major ethical issues arising from data, algorithms and AI

View project
Reported

Welfare | 2015 - 2016

Our world in data

View project
Reported

Welfare | 2011 - 2013

Smoking: behavioural economics and public policy

View project
Reported

Welfare | 2014 - 2018

Antiretroviral adherence among HIV+ adolescents in Southern Africa

View project
Reported

Welfare | 2004 - 2007

The Governance of Parliament 2004 – 2007

View project
Reported

Education | Welfare | 2013 - 2019

Neglected tropical diseases

View project
Search projects

We improve people’s lives by funding research that informs social policy, primarily in Education, Welfare and Justice. We also fund student programmes that give young people skills and confidence in science and research.

We offer our grant-holders the freedom to frame questions and enable new thinking. Our research must stand up to rigorous academic scrutiny, but we understand that to be successful in effecting change, it also needs to be relevant to people’s experience.

Profile