Insecure, low-quality work a major driver of UK’s NEETs and inactivity crisis

Ahead of prime minister Andy Burnham’s announcement on youth unemployment today, researchers have revealed the main factors which are pushing people out of the workforce. The research, published today by the New Economics Foundation (NEF), has found that insecure jobs and jobs where workers have little autonomy or voice in the workplace are the biggest factors in pushing people out of work.

The government is concerned about the stagnating UK labour market. There are low levels of job vacancies and employment rates have still not returned to pre-pandemic levels. The number of people economically inactive due to ill health has more than trebled since 2019 and the number of young people not in education, employment or training (NEETs) has now reached over 1 million.

The poor performance of the UK labour market has been attributed to a variety of factors, including poor levels of health in the population and lengthy NHS waiting lists. But today’s research reveals an additional neglected element: the poor quality of jobs themselves.

Researchers used data from a large-scale representative UK household survey to find the key aspects of work which cause people to leave or be pushed out of their jobs without new work lined up. Low job security such as a lack of a permanent contract, constrained choice over the pace and manner of their work and limited voice and stake over how working arrangements are organised are the biggest drivers in people being pushed out of work.

Workers in poor-quality jobs were found to be up to three times more likely to drop out of the workforce than workers in the highest-quality jobs, according to the research. The research also found that the self-employed and those on zero-hours contracts – who were previously no more likely than employees to leave work – saw a disproportionately higher exit from work during the pandemic period, suggesting that their insecure work arrangements made it easier for them to be pushed from the labour market.

Researchers argue that that investing in higher-quality jobs will help this government hit its employment targets and strengthen the UK economy. The researchers recommend the government build on the Employment Rights Act with a new drive to improve working conditions and rights for self-employed workers, including those in the gig economy, to protect them from unwanted job loss during economic shocks like Covid.

The researchers also recommend that the government support workers to manage ill health while in work with a new formal framework allowing people with health limitations to work variable hours within an agreed range, modelled on successful initiatives in countries like Denmark. They also recommend an employer national insurance tax break for hiring workers who have been on sickness benefits for a prolonged period. Their modelling finds this would support almost two times more people into work than the previous administration’s personal independence payment cuts would have done.

Dr Tom Stephens, senior fellow at the New Economics Foundation, said:

“This government has made improving job quality and raising employment participation two central policy priorities. With the right strategy, these two goals should be complementary, with investment in more secure work and stronger employment protections acting as a route to sustained employment.

“Our analysis suggests a key reason the UK has had such a poor post-Covid labour market experience is because workers in insecure, precarious jobs – particularly the self-employed – didn’t have the support to remain in work during the economic shocks we have seen. Solving this requires a comprehensive plan to improve the quality of working life.”

Notes

The New Economics Foundation is a charitable think tank. They are independent of political parties and committed to being transparent about how we are funded.

The report, The good work effect: How high-quality work can lead a jobs recovery, will be available at https://​newe​co​nom​ics​.org/​2​0​2​6​/​0​7​/​t​h​e​-​g​o​o​d​-​w​o​r​k​-​e​ffect from 00.01 Tuesday 28 July 2026.

The job quality analysis for this report was done using a large-scale household survey, Understanding Society, which is used very widely by social researchers and government statisticians. The survey sample consists of around 100,000 individuals and 40,000 households, interviewed annually from 2009 – 2025. The analysis for this report used over 30,000 observations of adults in paid work at least one point throughout this survey period.

The survey is longitudinal, with the same individuals re-interviewed across multiple years (or ​“waves”). This means researchers have data on both the kind of jobs done by workers based on their answers to various survey questions, and whether they stayed in the labour market in later waves of the survey.

Based on respondents’ answers to these questions, an index of their job quality was constructed, scoring workers on six dimensions: earnings quality, job security, autonomy and voice, working time quality, prospects, and health and safety. How well peoples’ jobs scored on these dimensions was then compared with their subsequent outcomes in the labour market, through a range of statistical models. After controlling for various characteristics, workers in the lowest-quality fifth of jobs were found to be three times more likely to exit employment than those in the highest-quality fifth of jobs.

The economic modelling for this report was done using a microsimulation model built by PolicyEngine UK using the Family Resources Survey – a large Department for Work and Pensions-run survey used widely for modelling the costs and benefits of tax and benefit policies. It modelled for a policy which would exempt employers from National Insurance contributions (NICs) for hiring inactive or disabled workers who had been out of work and on less conditional welfare benefits for over a year. It estimated this would raise employment participation by 17,000 at a cost of £1.37bn, whereas the previous administration’s planned PIP reduction would have raised it by only 8,300.