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Publication - Statistics

Scotland's Labour Market Overview: December 2023

Published
19 December 2023
Directorate
Chief Economist Directorate
Topic
Business, industry and innovation, Economy, Work and skills

Summary of employment, unemployment and economic inactivity estimates sourced from a range of official labour market statistics for Scotland and the UK.

View supporting documents Supporting documents

Employment

Due to the increased uncertainty around the ONS Labour Force Survey (LFS) estimates, ONS published an alternative experimental series of estimates of employment, unemployment and economic inactivity. The experimental adjusted estimates were derived using growth rates from Pay as You Earn Real Time Information and the Claimant Count for the periods from May to July 2023 onwards. These experimental estimates have been produced by ONS to provide a more holistic view of the state of the labour market while the LFS estimates are uncertain.

The adjusted experimental employment rate for Scotland had been increasing over time before falling following the 2008 recession. The employment rate then increased until 2019 before falling in 2020 as a result of the coronavirus pandemic. The employment rate had returned to pre-pandemic rates during 2022 but has been decreasing during 2023.

Figure 1: Adjusted experimental employment rate for Scotland (74.3 per cent) in August to October 2023 is lower than the UK (75.7 per cent) for the same period

Adjusted experimental employment rates for persons aged 16 to 64, Scotland and the UK, November to January 1997 to August to October 2023

Figure 1: A time-series chart showing adjusted experimental employment rates for Scotland and the UK from 1997 onwards. The UK and Scottish rates are closely related and show a general upwards trend. There is a decrease in the rates around the 2008 recession, before returning to a general upwards trend.

Source: Labour Force Survey from ONS, PAYE RTI from HMRC and Claimant Count from ONS, seasonally adjusted

Sex

The ONS adjusted experimental employment rates are not published by sex. Therefore, the information in this section covers ONS Labour Force Survey data to April to June 2023.

The employment rate for men in Scotland has generally been below the employment rate for men in the UK since 2010. In April to June 2023, the estimated employment rate for men in Scotland (76.7 per cent) was lower than the rate for the UK (79.4 per cent).

The employment rate for women in Scotland has typically been above the employment rate for women in the UK since 2002, except for the period between May to July 2019 to June to August 2020 when the employment rate for women in the UK was higher. In April to June 2023, the estimated employment rate for women in Scotland (71.9 per cent) was lower than the rate for the UK (72.1 per cent).

Figure 2: Employment rate for men in Scotland in April to June 2023 was 2.6 percentage points lower than the employment rate for men in the UK, while the employment rates for women in Scotland and the UK are similar

Employment rates for persons aged 16 to 64 by sex, Scotland and the UK, November to January 1997 to April to June 2023

Figure 2: A time-series chart showing employment rates by sex in Scotland and the UK from 1997 onwards. The UK and Scottish data shows broadly similar trends. Rates are broadly increasing apart from a dip around the 2008 recession. The employment rate for men is typically higher than for women, although the difference is narrowing, mostly due to increases in the rates for women.

Source: Labour Force Survey, seasonally adjusted, ONS

Age

Employment in Scotland varies by age group. As may be expected the younger and older age groups have lower employment rates.

Since October 2006 to September 2007, the employment rate for 16 to 24 year olds has been consistently lower than the employment rate for any other age group. This is due to higher numbers of people aged 16 to 24 being in education.

The employment rates for 25 to 34 year olds and 35 to 49 year olds have been fairly stable across the series. However, the rates were slightly lower in the years following the 2008 recession. The estimated employment rate for 25 to 34 year olds was 84.6 per cent in October 2022 to September 2023. The estimated employment rate for 35 to 49 year olds was 84.8 per cent in October 2022 to September 2023.

The estimated employment rate for those aged 50 to 64 had increased throughout the economic recovery from the 2008 recession and has been relatively constant since October 2016 to September 2017, except for the decrease following the start of the coronavirus pandemic.

Figure 3: Employment rate for those aged 16 to 24 in Scotland has been lower than any other age group since October 2006 to September 2007

Employment rates for persons aged 16 to 64 by age group, Scotland, year ending September 2005 to year ending September 2023

Figure 3: A time-series chart of employment rates in Scotland separated by age groups from October 2004 to September 2005 onwards. The 16 to 24 year old age group has a lower employment rate than any other age group since October 2006 to September 2007. Those aged 50 to 64 had the second lowest employment rate and those aged 25 to 34 and 35 to 49 had fairly similar employment rates.

Source: Annual Population Survey, Oct-Sep datasets, ONS

Disability

We define disability based on the Equality Act 2010. Level and rate estimates for employment by disability are all based on those aged 16 to 64 years. There is more information in the Glossary section.

The employment rate for disabled people has been consistently lower than the employment rate for non-disabled people. The employment rate for disabled people aged 16 to 64 was estimated at 54.4 per cent in October 2022 to September 2023. This was significantly lower than the employment rate for non-disabled people (83.1 per cent).

The disability employment rate gap is the difference between the employment rates for disabled and non-disabled people aged 16 to 64. It is calculated as the non-disabled employment rate minus disabled employment rate.

The disability employment rate gap has gradually decreased from 38.2 percentage points (pp) in October 2013 to September 2014 to 28.7 pp in October 2022 to September 2023.

Figure 4: Employment rate for disabled people aged 16 to 64 has continually been lower than the employment rate for non-disabled people

Employment rates for persons aged 16 to 64 by disability, Scotland, year ending September 2014 to year ending September 2023

Figure 4: A time-series chart of employment rates in Scotland for disabled and non-disabled people from October 2013 to September 2014 onwards. The non-disabled employment rate is higher than the disabled employment rate and is fairly stable over time. The disabled employment rate has been gradually increasing over time, narrowing the gap slightly between the disabled and non-disabled rates.

Source: Annual Population Survey, Oct-Sep datasets, ONS

Ethnicity

Respondents are asked questions about their ethnicity in the labour force survey interview. "Minority Ethnic" describes all ethnic groups excluding those who answered "White" to the first question. There is more information in the Glossary section.

There will also be variation between the individual ethnic groups included within the combined 'Minority ethnic' group which should be considered.

The employment rate for minority ethnic groups has been consistently lower than the employment rate for white groups. The employment rate for minority ethnic groups aged 16 to 64 was estimated at 66.0 per cent in October 2022 to September 2023. This was lower than the employment rate for white groups (76.0 per cent).

The minority ethnic employment rate gap is the difference between the employment rates for minority ethnic groups and white groups aged 16 to 64. It is calculated as the employment rate for white groups minus employment rate for minority ehnic groups.

The minority ethnic employment rate gap has generally been decreasing from 17.2 percentage points (pp) in October 2017 to September 2018 to 10.0 pp in October 2022 to September 2023.

Figure 5: The employment rate for people from minority ethnic groups aged 16 to 64 has continually been lower than the employment rate for people from white groups

Employment rates for persons aged 16 to 64 by ethnicity, Scotland, year ending September 2012 to year ending September 2023

Figure 5: A time-series chart of employment rates for people from minority ethnic groups and white groups in Scotland from October 2011 to September 2012 onwards. The employment rate for white groups is higher than for minority ethnic groups, and is fairly stable over time. The employment rate for minority ethnic groups is fluctuating over time and from October 2017 to September 2018 onwards, the gap between the groups is narrowing.

Source: Annual Population Survey, Oct-Sep datasets, ONS

Payrolled employees

This information is based on experimental monthly estimates of paid employees and their pay from HM Revenue and Customs’ (HMRC’s) Pay As You Earn (PAYE) Real Time Information (RTI) data.

The number of payrolled employees in Scotland had been gradually increasing until the start of the coronavirus pandemic. In November 2020, the lowest point following the start of the pandemic, there were 80,000 fewer payrolled employees in Scotland than prior to the pandemic (February 2020). However the estimated number of payrolled employees has generally been increasing since November 2020 and has continued to be above the pre-coronavirus level (February 2020) since November 2021. The latest early payrolled employee estimate for November 2023 indicates that there were 2.45 million payrolled employees in Scotland.

Figure 6: Number of payrolled employees in Scotland declined between February and November 2020. However, it has continued to be above the pre-coronavirus level since November 2021

Payrolled Employees, seasonally adjusted, Scotland, July 2014 to November 2023

Figure 6: A time-series chart showing the number of payrolled employees in Scotland from July 2014 onwards. The number of payrolled employees is steadily increasing until early 2020, decreases sharply until late 2020 and has been gradually increasing since then. After the pandemic it had recovered to a higher level than pre-pandemic and is continuing to increase.

Source: PAYE RTI, all industries, seasonally adjusted, HMRC

Note: Early estimates for November 2023 are provided to give an indication of the likely level of employees. The figures are based on around 85% of information being available. They are considered of lower quality and may be subject to revision in next month's release when between 98% to 99% of data will be available.

Payrolled employees by age

In October 2023, HMRC published monthly estimates for payrolled employees by age group up to September 2023. These estimates are based on the payrolled employees’ age at the time of receiving their payment.

Of the total payrolled employees in Scotland in September 2023, 94.5 per cent were aged 18 to 64 years.

Over the year to September 2023, the number of payrolled employees increased across all age groups, except the 18 to 24 year old age group.

Figure 7: The 65 and over age group seen the largest percentage increase in payrolled employees since September 2022

Annual Percentage Change in Payrolled employees by age group, Scotland, September 2022 to September 2023

Figure 7: A bar chart showing the percentage change over the year in payrolled employees by age group for Scotland. Most age groups are showing moderate increases in payrolled employees. The number of payrolled employees increased across all age groups, except the 18 to 24 year old age group.

Source: PAYE RTI, all industries, seasonally adjusted, HMRC

Payrolled employees by industry

In November 2023, HMRC published monthly estimates for payrolled employees by industry sector up to October 2023. Industry sectors are based on the ONS UK Standard Industrial Classification (SIC) codes.

Over the year to October 2023, payrolled employee growth varies by industry sector.

The energy production and supply industry sector has shown the largest percentage growth in payrolled employees over the year. Only four industry sectors showed a decrease over the year.

Figure 8: The energy sector has seen the largest percentage increase in payrolled employees since October 2022

Annual Percentage Change in Payrolled employees by industry sector, Scotland, October 2022 to October 2023

Figure 8: A bar chart showing the percentage change over the year in payrolled employees by industry for Scotland. The majority of industries showed an increase in payrolled employees over the year, with the energy sector showing the greatest growth. Only 4 of the 20 industries showed a decrease in payrolled employees over the year, with the biggest decrease being in the Administrative and support services sector.

Source: PAYE RTI, all industries, seasonally adjusted, HMRC

Median earnings for payrolled employees

This information is based on experimental monthly estimates of paid employees and their pay from HM Revenue and Customs’ (HMRC’s) Pay As You Earn (PAYE) Real Time Information (RTI) data.

The median pay for payrolled employees in Scotland has been gradually increasing over time, except for at the start of the coronavirus pandemic when the median pay for payrolled employees decreased sharply. The trends in median pay for payrolled employees is similar for both Scotland and the UK.

The latest early estimate for November 2023 indicates that median monthly pay for payrolled employees in Scotland was £2,334, an increase of 4.4 per cent compared to the same period the previous year. This is lower than the annual growth in median monthly pay for the UK over the same period (5.3 per cent).

Figure 9: Median pay for payrolled employees decreased sharply in April 2020 but has genderally been increasing since then

Median Monthly Pay for payrolled employees, seasonally adjusted, Scotland and UK, July 2014 to November 2023

Figure 9: A time-series chart showing the median pay for payrolled employees for Scotland and the UK from July 2014 onwards. The trends for Scotland and the UK are broadly similar. Median pay is increasing over the period, the increase is greater in more recent years. There is a noticeable decrease in median pay in April 2020.

Source: PAYE RTI, all industries, seasonally adjusted, HMRC
Notes: Early estimates for November 2023 are provided to give an indication of the likely level of employees as well as median pay in the latest period. The figures for November 2023 are based on around 85% of information being available. They are considered of lower quality and may be subject to revision in next month's release when between 98% to 99% of data will be available.

Adjusted for inflation (using the Consumer Prices Index including owner occupiers' housing costs (CPIH)), real earnings have grown by 2.4 per cent over the year to October 2023 compared with nominal earnings which had grown by 7.2 per cent over the same period.

Figure 10: Real pay for payrolled employees has remained relatively constant over time. However, real pay in October 2023 is higher than at the start of the coronavirus pandemic

Median Real and Nominal Monthly Pay for payrolled employees, seasonally adjusted, Scotland, July 2014 to October 2023

Figure 10: A time-series chart showing the Median Real and Nominal Monthly Pay for payrolled employees in Scotland from July 2014 onwards. Real pay for payrolled employees has remained relatively constant over time. However, real pay in October 2023 is higher than at the start of the coronavirus pandemic

Source: PAYE RTI, all industries, seasonally adjusted, HMRC and CPIH, ONS

Contact

For enquiries about this publication please contact:

Labour Market Statistics,
Office of the Chief Economic Adviser
Telephone: 0131 244 6773,
E-mail: LMStats@gov.scot

For general enquiries about Scottish Government statistics please contact:

Office of the Chief Statistician
E-mail: statistics.enquiries@gov.scot

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