FAI Publications, Labour Market, Scottish Economy

A summary of our latest Scottish Labour Market Trends report

We published the 3rd edition of our Labour Market Trends report today. In addition to the usual review of the headline trends in the labour market, this edition includes two in depth articles provided by the Scottish Centre for Employment Research. These articles focus on the increasing polarisation of training opportunities in the labour market and recent trends in trade union representation in the UK and Scotland.

The full report can be accessed here.

This blog summarises some of the key issues identified in our assessment of current conditions and outlook.

1. Despite apparently very little growth in the overall economy, Scotland’s labour market continues to hold up remarkably well.

Indeed, since 1992 – when the labour force survey was first published – only in the early summer of 2008 has Scotland’s unemployment rate ever been lower than the current rate of 4.4%.

Untitled 2. But challenges remain. One reason why the unemployment rate is so low is because inactivity rates have risen over the last eighteen months or so.



Scotland’s inactivity rate is now a full percentage point higher than that of the UK. Indeed, only the North East and the North West of England, the West Midlands and N. Ireland have higher inactivity rates than those in Scotland.

3. Levels of underemployment – as measured by the proportion of people in employment who would like to work longer hours, given the opportunity – have also fallen back from their post-financial crisis peaks.

Untitled 4. But on the other hand, the trend toward away from conventional full-time employment has continued

Since the financial crisis, there has been a rise in part-time employment (up around 9% since 2007). Within the part-time figures, there has been a 60% increase in the number of people who say that the reason they are working part-time is that they cannot find a full-time job.


Of the near 40,000 increase in employment over the last year, nearly ¾ of the increase has been from self-employment.

5. Scotland’s youth unemployment rate continues to outperform the rest of the UK – and is the lowest of any of the 12 Government Office Regions in the UK (i.e. the 9 English regions or 3 devolved administrations)


6. The challenges in the North East continue – with Aberdeen City having the toughest year in terms of falling employment.


7. The gap between male and female activity and employment rates has closed over the last couple of decades. However, within sectors there remains significant differences within the types of employment that are undertaken.


8. With weak productivity growth – and a fragile economic outlook – the prospects for higher wage growth are likely to be fragile. Within rising inflation, households will continue to feel squeeze.







The Fraser of Allander Institute (FAI) is a leading economy research institute based in the Department of Economics at the University of Strathclyde, Glasgow.