1、PwC UK Economics TeamDecember 2025Youth Employment Index 2025Topic in focus:Is the rise in Artificial Intelligence leading to the displacement of young workers in the UK?PwC2Jake FinneyPwC UK Senior EconomistToo early to blame AI for rising youth unemployment,but cracks are starting to show.Our 2025
2、 Youth Employment Index shows the UKs youth jobs market has deteriorated sharply,marking the steepest decline in the G7.Young people account for over half of the total rise in unemployment since mid-2022,despite making up under a fifth of the working-age population.Youth inactivity has also climbed
3、to new highs,with three million young people now out of the labour force,more than any other working-age group.What explains this downturn?The youth labour market is not immune to the broader economic slowdown.As demand for labour has softened,young workers have inevitably felt the squeeze.They are
4、concentrated in entry-level roles,leaving them more exposed than colleagues with longer tenure.Yet this alone is unlikely to explain why the UKs youth-to-adult unemployment ratio has hit a record high.The big question is whether AI is displacing some of the entry-level roles that young people rely o
5、n to start their careers.For now,its too soon to say.Our modelling finds no statistically significant relationship between AI adoption and youth unemployment,likely because young people tend to work in sectors with lower AI exposure,such as retail and hospitality.However,there are early signs of imp
6、act in sectors most exposed to AI.In the Information and Communication sector,youth employment has fallen by around one fifth over the past year,driven largely by fewer graduate roles,while adult employment has remained broadly stable.Graduates may be at the sharp end of this.In 2025,more than one m