Definition: Economic inactivity means that people (aged 16-64) are not involved in the labour market – they are neither working or actively seeking employment.
Economic inactivity includes students, early retirees, people looking after family members and the long-term sick. There are 9.0 million counted as economically inactive in the UK. (March 2026)
- The unemployed who are seeking working and willing and able to accept a job are counted as economically active.
- Economic inactivity is related to the participation rate (% of the population economically active). A rise in inactivity means a fall in the participation rate.
Reasons for economic inactivity
Source: ONS
- Early retirement. People who are made redundant may choose to take early retirement and live off savings rather than re-enter the labour market.
- Student. A high school student, university student or someone on a full-time training course is counted as economically inactive.
- Looking after family/home. People who stay at home to care for members of the family are counted as economically inactive as they do not have time to work in paid employment. This can also include people who stay at home to look after the children and the house.
- Discouraged workers. After several years of seeking employment, the long-term unemployed may give up and leave the workforce. This may involve moving on to sickness benefits or acting as a caregiver/parent.
- Long-term sickness/disability. Another cause of inactivity is those who are physically unfit to enter the labour market and gain full-time employment.
- Other. This could include people who choose alternative lifestyles, for example being self-sufficient and growing your own food. As there is no official job, it would count as economically inactive.
Economically inactive and wanting to work
The UK produces statistics on rates of economic inactivity. This includes a category for those who want a job and those who do not want a job. For example in Jan 2026. There were 9 million people aged 16-64 who were classified as economically inactive. Of these:
- 7.3 million – did not want a job
- 1.7 million did want a job (unemployed
The distinction is that within economic inactivity – somebody may want a job – but they are not in a position to actually take one. For example, if you are staying at home to look after an elderly parent, you may want a job. However, if you are unable to take any job offered, you are not counted as unemployed. To be counted as officially unemployed, you have to be willing and able to accept a job.
Alternatively, people with long-term sickness may want to work but be unable.
Trends in economic activity
Since 1970s, there has been a sharp reversal. Male inactivity rates increased from 16% to 33%. For women it has fallen from 56% to 40%
Source: ONS
It may surprise some people to learn economic inactivity has fallen since 1982. This is due to
- Lower rate of structural unemployment
- Rise in female employment levels. This is related to the decline in ‘housewives’, women staying at home to look after children. In 1981, female employment was 55% . In 2023, 72%
- Related to this is the decline in fertility rate – less women leaving the workforce to have children.
- Fewer early retirees. In the post-war period, firms were often more willing to give workers generous redundancy packages to retire early. This was particularly true in large nationalised industries.
- Higher retirement age means people are working longer in the age brackets 50-65
- Welfare reforms have increased pressure to enter the labour force. Changes to Universal Credit have tried to encourage people to enter the labour force.
- Structural change in the economy – growth of part-time, temporary service sector job, makes the labour market more flexible and gives people a chance to combine looking after children with a part-time job.
Cyclical nature of inactivity
This shows there is a cyclical element to economic inactivity. In a period of rising unemployment, we tend to get a rise in economic inactivity. Why is this?
- When unemployment rises and there are fewer job prospects; there will be a rise in redundancy so it is more likely older workers may choose to take early retirement than struggle in a difficult labour market.
- In a period of unemployment young people have a greater incentive to study and be a student rather than enter a difficult labour market.
- If wages are lower, work may be less attractive and it is cheaper to have one parent look after their children rather than employ childcare provision.
Economic inactivity since 1971
Could the economically inactive fill job vacancies?
In Feb 2020, the UK government announced new immigration laws which restrict the number of ‘unskilled’ workers from the EU. The home secretary Priti Patel announced that the economically inactive could fill these vacancies. How realistic is that?
- Early retirees – it is difficult to persuade early-retirees back into the labour force. They tend to have more economic independence and would need a well-paid job with interesting activities. They are very unlikely to want to take on relatively low paid ‘unskilled’ work.
- Students. Students already take on part-time work to help finance study. But, it would be difficult to significantly change this. Especially since in the new immigration climate, the government are encouraging firms to train more native-born workers – this may require more students not less.
- Care-givers. One opportunity to reduce economic inactivity would be to provide greater social care for those needing long-term treatment. This would free-up current care-givers to take on paid employment. However, this kind of social care would be very expensive and it is difficult to see how the government would be willing to make any significant change in freeing up long-term care-givers. It may also require immigrants to work as care-givers.
- Discouraged workers. There is scope amongst discouraged workers to increase labour market participation, but the number in this category is very low – only 33,000 in Dec 2019.
- Long-term sick. This is one of the biggest categories at 2.8 million (2025). Within this category, there is a range of different sub-categories. Some may be able to work – at least in non-manual work or part-time. However, it is already a contentious issue with Universal Credit being blamed on forcing genuinely sick people to take jobs they can’t really do or lose benefits.
Conclusion
With 9 million economically inactive, it is a very significant part of the population. However, ‘economically inactive’ is a rather misleading term.
- Students are increasing long-term labour productivity.
- Care-givers are offering a vital public service – which would have a very high cost should the government pay directly.
- Parents and people who look after family also provide a hidden economic service.
- Early retirement is chosen by many who want to prioritise leisure over monetary gain.
- The long-term sickness of 2.8 million suggests we should endeavour to try and improve the health of the population – through better preventative policies for issues like diabetes and heart disease.
Some types of inactivity are increasing
There has been a rise in health related inactivity since 2020 with growth in long-term sick. There is a smaller decline in looking after family.
Since 2019, the combined unemployment plus sickness benefit has increased.
This decline in the fertility rate explains some of the reasons for falling inactivity. (ONS typically underestimate the decline in fertility.
NEET
Another area of concern is rise in inactivity amongst young people. The number of NEET – not in education, employment or training has risen since 2020. The UK NEET rate is now higher than European average.
Related
- The true level of unemployment
- Male Inactivity Rates in UK
- Causes of Relative Poverty in UK
- ONS Inactivity
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