Longer working lives and youth unemployment: are they really in conflict?

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Following this year’s publication of the Second Pensions Commission report which argues for longer working lives and the Milburn Review on rising numbers of young people not in education, employment or training, our new discussion paper asks whether one comes at the expense of the other. What does the evidence show?

Are older workers taking opportunities from younger people?

As policymakers look for ways to help people work for longer, a familiar concern is back in the spotlight: if people in their 50s, 60s and 70s stay in work for longer, will they block labour market opportunities for younger workers? 

The issue feels especially urgent following two major 2026 reviews: the Second Pensions Commission, which put longer working lives at the centre of its response to population ageing, and the Milburn Review, which highlighted rising numbers of young people who are not in education, employment or training.

So are these two goals in conflict?

Our review finds little evidence that keeping older workers in employment pushes younger people out of work or reduces their progression opportunities at an economy-wide level. Where bottlenecks do arise, they are more likely to be local, workplace-specific issues around progression, job quality or fixed headcounts.

The evidence in brief

• Higher employment among older workers does not appear to drive up youth unemployment in the UK or across comparable economies.
• When the economy is strong, employment tends to improve for younger and older workers: stronger economies create opportunities across the age range.
• Youth labour market weakness is more likely to reflect weak local demand, poor job quality, limited training routes, skills mismatch, health barriers and potential shifts in entry-level hiring linked to GenAI.
• Policy should focus on creating more and better opportunities across generations, rather than using early retirement as a youth employment lever.

What is the idea behind the debate?

The concern rests on a simple but misleading idea: that there is a fixed number of jobs to go round.

Economists call this the “lump of labour” fallacy.

If it were true, encouraging older people to retire earlier would open up jobs for younger workers. But labour markets do not work like that.

Jobs are constantly being created and lost as businesses respond to changes in demand, investment, technology and growth. The size and quality of the labour market depends on much more than how many older people remain in work.

Historical, international and UK evidence provides little support for the simple ‘lump of labour’ view that more work for older people means fewer opportunities for younger workers.

In fact, employment rates for different age groups often move together. When demand is strong, firms tend to hire across the age range; when demand weakens, prospects deteriorate, making it harder for everyone.

The UK’s 1977 Job Release Scheme reduced employment among older workers but did not deliver the intended reduction in youth unemployment. More recent evidence around the recent rise in the State Pension age from 65 to 66 also suggests that raised employment among older workers did not worsen young people’s job prospects.

What does UK data tell us?

UK labour market data tells the same story: older worker and youth unemployment do not show the simple opposite movement we would expect if jobs were fixed and one age group’s gain was another’s loss.

Across regions and countries, wider economic conditions, labour demand, skills systems, job quality and local opportunity, appear to matter far more than direct competition between generations.

That does not mean local pressures never arise. In some organisations or local labour markets, a delayed retirement might slow promotion routes or postpone recruitment opportunities in the short term.

But those pressures are best understood as workplace or institutional adjustment challenges, not evidence the economy has a fixed stock of jobs to share out.

Read the full paper for a detailed review of UK and international evidence, including labour market data and policy research.