Fraser of Allander Institute and Scottish Centre for Employment Report on Scottish Labour Market Trends

The Fraser of Allander Institute and Scottish Centre for Employment has released their report on Scottish labour market trends. 

The Fraser of Allander Institute is a leading economic research institute with over 40 years of experience researching, analysing and commentating on the Scottish economy. The FAI undertakes a unique blend of cutting-edge academic research alongside applied commissioned economic consultancy in partnership with business, local and national government and the third sector. 

The report shows that Scotland’s labour market remains strong, in absolute terms and relative to the rest of the U.K., with a slightly lower unemployment and a higher employment rate. Scotland continues to have the best employment rate outside of the East and South of England with a record high of 75.2% employment and unemployment remaining low at 4.0%.

Much of the increase in employment comes from self employment. The nature of this work is predominantly unknown, whether a move to increase work flexibility and potential earnings or a result of not being able to find employment and so becoming precariously self employed. The kind of work being undertaken will have an impact on the amount of tax revenue generated by this upturn in self employment. 

Self employment has risen particularly in women since 2008, perhaps indicating that child care is a motivation in the increase. In terms of age, the largest increase in employment since 2008 has been in the 65+ demographic, 25-34 and 35-49 are also back at pre-2008 levels of employment. 

Trends in youth labour market of 16-24 show employment at a record low, however this could in part be due to employment inactivity indicating an uptake in full time education between these years.Productivity remains sluggish, as a result of which real earnings once adjusted for inflation are also subdued. 

You can read the full report here as well as John Sutherland looking in more detail at firm’s workplace adjustment strategies during the Great Recession with insights from the Workplace Employment Relations. John is an Honorary Research Fellow at the Scottish Centre for Employment Research (SCER) in the Department of Human Resource Management at the University of Strathclyde.