The Swiss top 2025 rankings
Switzerland, Iceland and the Netherlands top our latest Youth Employment Index 2025. The top countries found success through targeted investment in skills via vocational training and through more effective job placements. In addition, relative to the UK, other OECD economies offer more flexible employment opportunities and supporting higher rates of part-time work.
UK falls down the table
The UK ranks 27th out of the 38 OECD economies included in our Index, down from 22nd last year. This year’s decline reflects a combination of rising youth unemployment, now at its highest level since 2020, and higher levels of economic inactivity. This rise is part of a broader slowdown in the UK labour market; however, the deterioration has been steeper among young people than older workers.
No strong AI impact yet
PwC’s Hope and Fears survey found nearly a third of entry-level workers say they’re worried about AI’s impact on their future. Across all sectors, our modelling found no direct impact of AI on youth unemployment, with weaker business sentiment and softer labour demand being the main drivers behind the recent uptick. However, analysing sectors with high AI exposure such as IT shows a potential impact on entry-level roles over the past year.
UK NEET levels a continuing concern
The UK continues to underperform relative to its peers in the proportion of young people that are not in education, employment or training (NEET). Our estimates suggest that UK GDP could be boosted by up to 1% p.a. if it was able to reduce the NEET rate in all UK regions to match the level of the Northern Ireland, the best performing region.
The UK ranks 27th out of 38 countries in the OECD, dropping five places in the index ranking since last year. Overall, the UK has seen a stagnation in its Index score post-pandemic, reflecting a combination of rising youth unemployment, now at its highest level since 2020, and higher levels of economic inactivity, while other OECD economies continue to improve. A growing share of young people in the UK are inactive, driven by a larger pool of students and three-times as many inactive due to long-term sickness than in 2005, with mental health conditions a key driver.
Young people are not immune to the pressures facing the wider labour market. UK youth unemployment is now 2.8 percentage points higher than the OECD average, with young workers appearing to be more impacted by the overall trend of softer demand in the job market than older workers. The UK’s youth-to-adult unemployment ratio is now at its highest level on record and the highest in the OECD, while inactivity has grown faster among young people than in any other age group.
The overall share of recent graduates in ‘graduate jobs’ has fallen to its lowest level since 2014, indicating the labour market’s capacity to absorb new entrants is weakening. The number of graduates entering the jobs market continues to climb with 2024 marking the first year over one million students graduated from university.
Long-term policy changes are vital to help bridge the gap between education, employers and young people. We identify five key policy areas:
- Improving skills matching and profiling to address the skills gap
- Increased strategic funding for higher education
- Rebranding apprenticeships through apprenticeship levy reform
- Equitable access to career guidance
- Targeted and practical embedding of AI skills into all stages of education
"Meeting this challenge is increasingly urgent, but there are roadmaps. If the rest of the UK matched Northern Ireland’s NEET levels, GDP could be boosted by around £13-26bn."
Jake Finney, Senior Economist, PwC UK
"There’s a lot of talk and anxiety about AI taking jobs, but I think the bigger risk is people losing confidence in their place in the future. With the right investment in skills and inclusion, technology can open more doors than it closes. Helping young people build confidence with digital tools and technology is how we turn uncertainty into resilience and that’s what will really shape the UK’s future economy."
Asim Siddiqi, Technology Talent Leader, PwC UK
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