The Scottish Government

Why is this Purpose target important?

Improved labour market participation is a key driver of economic growth. Increasing the number of people in employment adds to the productive capacity of the economy and makes better use of our human capital potential. It also improves the standard of living of those moving into employment and supports a more equitable distribution of the benefits of growth.

What will influence this Purpose target?

Participation rates in Scotland are influenced by demand for labour and the number of jobs in the Scottish economy as well as the supply of labour to fill those jobs. Supply depends on:

• The ability of individuals to participate in the labour market (which is influenced by health and social factors as well as skills levels).
• The willingness of individuals to participate in the workforce (which is affected by issues such as the relative incentive of seeking income from employment).
• The impact of net migration on the size of the workforce.

What is the Government's role?

The Government can take a number of actions to influence labour market participation in Scotland. These include:

• Learning, skills and well-being: ensuring the supply of education and skills is responsive to, and aligned with, actions to boost demand for skills; and removal of any barriers that stand in the way of individuals realising their potential in the workforce.
• Supportive business environment: provision of responsive and focused enterprise support to increase the number of highly successful, competitive businesses; a focus on key sectors with high-growth potential; and a competitive tax regime which gives incentives for business growth and attracts mobile factors of production.

• Effective government: supporting local employability partnerships to increase job outcomes for those disadvantaged in the labour market, developing and delivering effective and coherent services which meet the needs of individuals and the local labour market.

How are we performing?

For UK Target:

Scotland has the highest employment rate of the 4 countries in the United Kingdom. The employment rate in Scotland has been steadily increasing since the mid 1990's with a rate of 76.3 per cent in the latest available calendar quarter (Jul-Sep 2008). This compares to an employment rate of 74.5 per cent in England (the country with the second highest employment rate within the UK) for the same quarter. Thus the gap between Scotland and England's employment rates is currently 1.8 per cent. In the third quarter of 2007 Scotland had an employment rate of 76.6 per cent and England had an employment rate of 74.5 per cent, giving a gap of 1.9 per cent. So the gap (decreasing by 0.1 per cent) has remained practically unchanged - a maintaining of Scotland's relative position.

Source: Labour Force Survey, Seasonally Adjusted data, Office for National Statistics

Methodology

This evaluation is based on: any difference in the gap within +/- 1 percentage points of the equivalent quarter in the previous year suggests that the position is more likely to be maintaining than showing any change. An increase of 1 percentage point or more suggests that the position is improving; whereas a decrease in the gap of 1 percentage point or more suggests the position is worsening.

For information on general methodological approach, please click here.

For Organisation for Economic Co-operation and Development (OECD) Target:

The employment rate in Scotland, using the European age definition (15-64), in 2007 was 72.4% which is 0.1 percentage points higher than the previous year. Compared to the other countries in the Organisation for Economic Co-operation and Development (OECD) Scotland has the 10th highest employment rate. Between 2006 and 2007 the gap in employment rates between Scotland and the country with the 5th highest rate (Sweden in 2007 and New Zealand in 2006) increased from 2.9 percentage points in 2006 to 3.3 percentage points in 2007.

Gap between the employment rates in Scotland and the fifth highest OECD country

Source: Organisation for Economic Co-operation and Development, Annual Population Survey

Methodology

This evaluation is based on: any difference in the gap within +/- 0.5 percentage points of last year's figure suggests that the position is more likely to be maintaining than showing any change. A decrease in the gap of 0.5 percentage points or more suggests that the position is improving; whereas an increase in the gap of 0.5 percentage points or more suggests the position is worsening.

For information on general methodological approach, please click here.

Further Information

2007 Spending Review Technical Note

Statistics Topic Page