3.4.15 Economic inactivity measures those that are not engaged with the labour market, i.e. not in employment or classed as unemployed using the International Labour Organisation (ILO) definition. A person must be either economically active or inactive and therefore the pattern identified in this section is a mirror image of the economic activity analysis covered above.
3.4.16 The economically inactive, as measured by the Labour Force Survey (LFS), can be split into three broad groups:
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Those seeking work but not available to start;
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Those who want work but are not actively seeking it;
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Those who do not want work.
The majority of students and those in retirement are classified as economically inactive.
3.4.17 It is natural to expect a degree of economic inactivity in the population as some people are not able or chose not to work. Important activities are carried out by this group, including caring for children and elderly relatives, studying and voluntary work; however, a relatively high inactivity rate can be a sign of under utilisation of labour resources. It may also be an indicator of - and a contributor to - social exclusion.
3.4.18 In the region, there are 1.6 million economically inactive people aged over 16 years - around 0.9 million of these are over retirement age. As the relative size of the retired population varies across the country and the region, this analysis focuses on economic inactivity in the working age population.
3.4.19 In the South West, there are 705,400 economically inactive people of working age or 21.6% of the working age population. Only the South East and East had lower economic inactivity rates than the South West during the period July 2009 - June 2010 (see Figure 3.4.4).
Figure 3.4.4 Reasons for Economic Inactivity: Working Age July 2009 - June 2010
Reasons for Economic Inactivity: Working Age, July 2009 - June 2010 (Fig 3.4.4). Source: Annual Population Survey, NOMIS.
3.4.20 The majority of inactive working age people in all regions “do not want a job” - 77% in the South West. The remaining 23% want a job but are either not actively looking or are unable to start work in the near future. Of the economically inactive working age individuals not looking for work, 6.2% give the reason of long term sickness in the South West, slightly below the England average (6.4%) – see Figure 3.4.5.
Figure 3.4.5 Percentage of Economically Inactive Individuals Wanting a Job: Working Age July 09 - June 10
Percentage of Economically Inactive Individuals Wanting a Job: Working Age July 09 - June 10 (Fig 3.4.5). Source: Annual Population Survey (NOMIS).
3.4.21 As with economic activity, the economic inactivity rate in the region has remained fairly stable until relatively recently. Data from the Annual Population Survey (APS) indicates that the number of economically inactive people in the region rose by around 23,200 between Q1 2009 and Q1 2010 (0.6 percentage points) - see Figure 3.4.6. This is larger than the 0.4 percentage point rise for England as a whole. Although inactivity rates fell slightly in the early part of the recession, they rose throughout 2009 and into the first quarter of 2010. Inactivity rates fell in the second and third quarters of 2010. Whether this is the start of a more significant recovery-driven fall is yet to be determined. During the recession, most of the rise in South West inactivity was due to rising male inactivity.
Figure 3.4.6 Economic Inactivity Rates: Working Age Q3 2000 to Q3 2010
Economic Inactivity Rates: Working Age Q3 2000 to Q3 2010 (Fig 3.4.6). Source: Labour Market Statistics (ONS).
3.4.22 Sub-regional inactivity: The highest rates of inactivity are found in Cornwall (26.0%), Bournemouth (25.2%) and Torbay (25.1%), while the lowest rates are found in South Gloucestershire (17.2%), North Somerset (17.8%) and Swindon (18.0%). The reasons for inactivity also differ across the region, although the data at this level is less robust. For example, the percentage of economically inactive individuals who want a job but are not looking due to long term sickness varies from 13.6% in Torbay and 8.8% in Plymouth to 3.1% in South Gloucestershire and 3.3% in North Somerset.
3.4.23 Both regionally and nationally, economic inactivity rates are lower for white groups than for non-white groups (see Figure 3.4.7). South West inactivity rates are substantially lower than the national averages, particularly for the non-white population, regardless of nationality. The figures for all ethnic and nationality groups (apart from white UK nationals) are less reliable at the regional level given the small size of the survey sample.
Figure 3.4.7 Economic Inactivity Rate by Ethnic Group and Nationality: Working Age July 2009 - June 2010
Economic Inactivity Rate by Ethnic Group and Nationality: Working Age July 2009 - June 2010 (Fig 3.4.7). Source: Annual Population Survey (NOMIS).
