"Despite unemployment rates falling over the past decade, economic inactivity rates have remained relatively stable and high, at around 21-22 per cent for people of working age. At the same time, there has been increasing recognition of the need to consider the size and composition of the inactive group in assessing potential labour supply and making projections, and a greater policy focus on the scope for reducing inactivity, as well as unemployment, as a means of boosting economic performance. The article summarises the findings of previous articles which have looked in detail at people who are economically inactive classified according to their reason for inactivity. These discovered that the reasons often correlate to key life stages: students; people (mainly women) looking after the family or home; temporarily sick, long-term sick and disabled people; and the retired. This article looks at the inactive group as a source of potential labour supply, starting with the desire and availability for work of people in these different situations using current LFS information. Actual transitions into employment are then considered. This highlights difficulties with the available classification and cognitive testing of the LFS questions, reported in a separate article, informs suggestions for improving the current classification of sub-groups of inactivity in order to measure potential labour supply more effectively."

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