Future-Proofing the Skills System in the Glasgow City Region (Scotland, United Kingdom)

Report

OECD Reviews on Local Job Creation

16 September 2024

2. Glasgow’s labour market: a story of economic recovery

Abstract

This chapter describes the labour market and socio-economic landscape of Glasgow City and its surrounding metropolitan area, the Glasgow City Region. It begins by offering an overview of the population’s characteristics and the city’s economic performance. Following this, it examines the labour market dynamics, focusing on metrics like unemployment rate, inactivity rate and labour market tightness. Subsequently, the chapter addresses poverty and income distribution within the metropolitan region. Finally, it explores labour productivity, analysing factors such as educational attainment and occupational composition within the population that could influence it.

In Brief

The unemployment rate in the Glasgow City Region (GCR) decreased to a record low over the last two decades, which, coupled with an increase in vacancies, led to a tightening of the labour market. The unemployment rate in the metropolitan region peaked during the financial crisis at 10% in 2010, and it has since decreased to the record-low level of 3% in 2023, contributing to an increase in the employment rate. The decrease in the number of unemployed and a simultaneous rise in online vacancies that tripled between 2020 and 2022 has led to a labour market tightening in GCR.
The high number of economically inactive people constitutes a pool of untapped potential in GCR. Around 1 in 4 people aged 16 to 64 were economically inactive in GCR in 2022, higher than in many UK and OECD cities. Over 14% of the inactive wanted to work, representing a resource the region could tap into in a tightening labour market.
Poverty remains a challenge in Glasgow City and many surrounding areas. The three councils with the highest share of income deprivation in Scotland, Glasgow City, Inverclyde and West Dunbartonshire, are located in GCR. The high incidence of income deprivation in Glasgow City aligns with low household income. In 2021, the gross disposable household income per head was only 79% of the UK average, and, in relative terms, it decreased over the last 20 years.
Labour productivity remains subpar compared to the UK average and OECD cities. Workers in GCR are only 91% as productive as in the UK, measured as GVA per hour worked. The gap narrowed from 87% in 2004 to 93% in 2015, but it has recently started widening again. Labour productivity in GCR is also lower than in most OECD cities.
The share of degree-holders increased in the last 20 years in GCR, which is now above the UK average. In 2023, those holding a degree accounted for 57% of 25-64-year-olds in GCR, five percentage points above the UK average and higher than in many OECD cities. This results from a tremendous improvement in educational attainment in GCR, with the share of 25-64-year-olds holding a degree increasing from 30% in 2004. However, despite the overall increase in educational attainment, the share of 25-64-year-olds with no qualification remains high in GCR compared to the UK average.
There are large disparities in the labour market outcomes across the Local Authorities in GCR. The inactivity rates observed in GCR ranged from 28% in North Lanarkshire, above the UK average, to 20% in East Renfrewshire, below the UK average and similar to the best-performing cities in the OECD. The composition of the workforce within the region differs, too. In East Renfrewshire, the share of high-skilled workers was 68% in 2023, while in the worst-performing councils on this measure, it was around 40%, which likely contributed to large income disparities observed within the metropolitan region.

Glasgow: Scotland’s biggest urban area and its economic powerhouse

The Glasgow City Region is one of the largest metropolitan areas in the UK and an economic powerhouse of Scotland. With a population of over 1.8 million people the Glasgow City Region (GCR) is the fifth biggest Functional Urban Area1 in the UK, after London, Manchester, West Midlands urban area and Leeds. GCR includes four councils that belong to the Glasgow urban area2, Glasgow City, East Dunbartonshire, East Renfrewshire, and Renfrewshire, as well as Inverclyde and West Dunbartonshire in the west, and North Lanarkshire and South Lanarkshire in the east. GCR is home to a third of the Scottish population. It is also an economic powerhouse of Scotland, generating GBP 48 billion Gross Value Added (GVA) in 2022, a third of the Scottish economic output (Figure 2.1). In addition to its economic significance, GCR is an important cultural, educational, and research centre home to several universities and institutions of international reputation.

Figure 2.1. The Glasgow City Region accounts for over a third of the Scottish population and economic output

Gross Value Added (GVA) is a measure of economic output. Simplistically, it is the value of the amount of goods and services that have been produced, less the cost of all inputs and raw materials that are directly attributable to that production (UK Department for Environment Food & Rural Affairs, 2022[1]).

Within its metropolitan area, Glasgow City is by far the biggest of the eight councils in the Glasgow City Region in terms of population and economic size. Its population of over 600 000 people constitutes over a third of the population of GCR. It is almost twice as large as the populations of the second and third-biggest councils in the region. The economic dominance of Glasgow City in the region is even stronger. It contributes almost half of the GVA produced in the metropolitan area (Figure 2.2). Glasgow City is also at the heart of GCR's educational and cultural activities. The second and third-biggest councils in the region regarding population and economic output are North Lanarkshire and South Lanarkshire. North Lanarkshire is the second most densely populated area in the region. It includes many residential areas for commuters in the south-west and some rural areas in the north and east. South Lanarkshire has the region's largest surface and lowest population density. It is characterised by varied landscapes with some towns and many rural areas. The fourth largest council, Renfrewshire, is a densely populated area home to Glasgow International Airport and has strong transportation links to Glasgow City. GCR also includes four smaller councils, East Dunbartonshire and East Renfrewshire, affluent sub-urban areas, and West Dunbartonshire and Inverclyde, which were historically associated with shipbuilding and, after the traditional industries declined, are working towards revitalising and diversifying their local economies.

Figure 2.2. Glasgow City has the biggest population and economy in the Glasgow City Region

The Glasgow City Region is an integrated economic area with the vast majority of people work either in their place of residence or in Glasgow City. In 2023, among the residents of GCR, 66% worked in the same Local Authority as their place of residence, 16 % commuted to Glasgow City and 17% commuted to work outside of GCR (Figure 2.3). The share of residents who commuted to work in Glasgow City differed across the metropolitan region. In East Dunbartonshire and East Renfrewshire, respectively, 39% and 45% of residents commuted to work in Glasgow City. In contrast, in Inverclyde, most of the population worked in their place of residence, and only 15% commuted to Glasgow City.

Figure 2.3. Eight in ten of the Glasgow City Region’s residents work in the region

Place of work of the residents of Local Authorities in GCR, 2023

The population of the Glasgow City Region is relatively young, and it is growing again after decades of rapid decline

Glasgow City and the surrounding area were shaped by the Industrial Revolution and experienced a fast decline when the position of its core industries weakened. In the late 18^th and 19^th centuries, Glasgow became a major centre for shipbuilding, trade and heavy industry. Employment opportunities attracted workers, and Glasgow’s population grew, reaching a peak of over 1 million inhabitants in 1925. Subsequently, Glasgow’s population remained stable until the early 1950s (Understanding Glasgow, n.d.[2]) when the pre-eminent position of many of the city’s industries weakened and Glasgow entered a period of economic decline and de-industrialisation.3 This led to a steep decline in population, typical of post-industrial areas. Between the 1950s and early 2000s, Glasgow lost almost half of its population (Understanding Glasgow, n.d.[2]).

More recently, the population of the Glasgow City Region began to rise again, however, the growth rate has been slower than in comparable cities in the UK. While many major cities, such as London, Edinburgh or even post-industrial Manchester, have increased their population over the last 40 years, the current population of GCR is similar in size to its population in 1981 (Figure 2.4, Panel A). Glasgow’s population is projected to continue growing in the 2018-2043 perspective but slower than in many comparable cities. By 2043, GCR is expected to increase in population by 3%, while Edinburgh is projected to grow by 13%, London by 10%, and Manchester by 9%.

Figure 2.4. Population growth in the Glasgow City Region has been slower than in comparable cities in the UK, and large differences within the metropolitan region are observed

The recent population growth in Glasgow City was driven mainly by migration. The natural change declined in Glasgow City over the last decade and was pushed further down by the Covid-19 pandemic, bringing it to negative territory. However, since 2006, the number of people moving to Glasgow City exceeded the number of people leaving, helping boost population growth. This was principally due to an increase in overseas migrants, including refugees from Ukraine, since Russia’s war against Ukraine started. More recently, net migration with the rest of the UK also became a positive (National Records of Scotland, 2022[3]). The future population growth is projected to be driven mainly by overseas migration, while the natural change is expected to remain negative (National Records of Scotland, 2020[4]). Brexit may further limit Glasgow’s population growth, although Glasgow City, with approx. 5% of the EU-born population (The Migration Observatory, 2022[5]) is less exposed to the impact of Brexit on migration than many other Local Authorities in the UK.

While the population of Glasgow City is undergoing gradual expansion, the demographic trends in other Local Authorities differ. For example, the population of East Renfrewshire experienced a fast increase over the last three decades and is projected to grow in the next twenty years (Figure 2.4, Panel B). In contrast, Inverclyde lost 16% of its population in the same period, experiencing the fastest population decline in Scotland (National Records of Scotland, 2020[6]). A similar trend was observed in West Dunbartonshire, which lost 10% of its population since 1991. In both councils, more people were leaving the area than moving in (Understanding Glasgow, n.d.[7]). Inverclyde and West Dunbartonshire are projected to further depopulate in the next 20 years (National Records of Scotland, 2022[8]). Depopulation undermines the local economy and reduces the funds available for public services (OECD, n.d.[9]), impacting the area's attractiveness and discouraging investment and migration.

Glasgow City has a relatively young population and low elderly dependency ratio, but the demographic composition differs across the metropolitan region. The elderly dependency ratio, i.e., the proportion of 65+ year-olds to the working-age population, is lower in GCR (27%) than the Scottish (31%) and UK averages (30%) and lower than in many comparable cities in the OECD. The elderly dependency ratio is particularly low in Glasgow City (19%). In the 1990s, the elderly dependency ratio in Glasgow City was similar to the Scottish and UK averages. However, since then, a simultaneous increase in the size of the working-age population and a decrease in the size of the 65+ population led the elderly dependency ratio in Glasgow City to drop from 25% in 1992 to 19% in 2021, a strikingly different trend than in Scotland and the UK. This also contrasts the trends observed in other Local Authorities in GCR. The other councils in the GCR have a lower share of the working-age population than Glasgow City and observed an increase in the elderly dependency ratio over the last three decades.

The foreign-born population's share in the Glasgow City Region is lower than in many cities in the OECD and the UK. In GCR, 11% of the population was born outside of the UK in 2023 (Figure 2.5). That was four percentage points lower than the UK average. The foreign-born population was concentrated in Glasgow City, with 19% of the population born outside the UK. In contrast, less than 4% of the population was foreign-born in Inverclyde.

Figure 2.5. One in five foreign-born people in GCR lives in Glasgow City

Share of foreign-born population, latest available year

The economy of the Glasgow City Region is growing but at a slower rate than the Scottish and UK averages

GVA, a measure of economic performance, increased in the Glasgow City Region over the last two decades but at a slower rate than the Scottish and UK averages. The GVA measured in 2019 money values increased by 42% in the GCR between 1998 and 2022. However, the cumulative growth in GVA in the GCR over the last two decades was slower than in Scotland (45%) and the UK (52%), partly due to a larger decrease in GVA during the financial crisis in GCR (ONS, 2024[10]).

Manufacturing, real estate activities, and human health & social work activities are the biggest contributors to GVA in the Glasgow City Region, but the information & communication industry recorded the largest increase in GVA over the last two decades. Manufacturing, real estate activities, and human health & social work activities each produced 9%, 11%, and 12% of GVA in the GCR in 2022 and contributed to its growth over the past two decades. Other important industries that contributed most to the region’s GVA growth over the past decades are information & communication, professional, scientific & technical activities, and administrative & support service activities (Figure 2.6). The main driver of growth in GVA was the information & communication industry, which accounted for 30% of the increase.

Figure 2.6. The information & communication industry was the main driver of GVA growth in the Glasgow City Region over the last two decades

The Glasgow City Region¹, chained volume measures in 2019 money values, GBP million

The most prominent industries in terms of GVA contributions were not necessarily those employing the largest share of workers. Human health & social work activities, wholesale & retail trade, and administrative & support service activities account for 15%, 13, and 11% of employment respectively. However, wholesale & retail trade and administrative & support services only contributed to 8%, respectively 6%, of GVA in the GCR in 2022. In contrast, financial & insurance activities and information & communication account for a much higher share of GVA than employment. This implies that productivity, measured as GVA per worker, differs across industries. The highest GVA per worker was observed for real estate activities and utilities (electricity, gas, water, sewerage and waste management) (ONS, 2024[10]; NOMIS, 2023[11]).

The unemployment rate is at a record low in the Glasgow City Region, but economic inactivity remains high despite a positive trend

The employment rate in the Glasgow City Region, at 73% in 2023, is low compared to the other cities in the UK and the OECD. The employment rate in GCR is below the UK (75%) and Scotland’s averages (75%), and it is lower than in many OECD cities (Figure 2.7, Panel A). While the overall trend in the employment rate was positive in the last two decades, the employment rate in GCR dropped during the financial crisis to 67% and recovered to the pre-crisis level only in 2015. Subsequently, the employment rate stagnated before increasing to 73% in 2022 (Figure 2.7, Panel B). Over that period, the short-term volatility in the employment rate was driven mainly by the change in the number of unemployed, with the labour force participation, i.e., the share of economically active in the 16-64-year-old population, remaining stable during the financial crisis. However, the long-term increase in the employment rate is explained by both the gradual increase in labour force participation and a decrease in unemployment, accounting for a 3 and 2 percentage points increase in the employment rate since 2004, respectively. In 2023, the employment rate differed within GCR, ranging from 68% in Inverclyde to 78% in East Renfrewshire.

Figure 2.7. The employment rate in the Glasgow City Region is relatively low despite a positive trend

Employment rate, 15 to 64-year-olds

The unemployment rate in the Glasgow City Region, at 3.2% in 2023, is at a record low. The current unemployment rate is below the UK (3.8%) and Scottish (3.6%) averages. It is also low compared to the other major cities in the UK and the OECD (Figure 2.8, Panel A). The unemployment rate in Glasgow City was 3% in 2023 and it was modelled to be even lower in the other Local Authorities, and especially low in South Lanarkshire (2.2%) and Renfrewshire (1%).

The decrease in the unemployment rate in Glasgow City is consistent with the trends in the UK and the rest of the OECD. The unemployment rate in GCR peaked during the financial crisis at 10.1% in 2010, and it has since decreased to the current record-low level of 3% in 2023 (Figure 2.8, Panel B). This is in line with the trends in the UK and the OECD. In the UK, the trend that started before the COVID-19 pandemic and was temporarily reversed by the pandemic brought the unemployment rate to the low levels not seen since the 1970s (ONS, 2024[12]). In the OECD, the average unemployment rate followed a similar trend and decreased to 5.1% in 2022, a record-low since the start of the series. (OECD, 2024[13]).

Figure 2.8. The unemployment rate in the Glasgow City Region decreased over the last decade to one of the lowest levels among the comparable cities

Unemployment rate, 15 to 64-year-olds

The number of filled jobs in the Glasgow City Region increased over the last two decades but at a slower rate than in the UK. Between 2000 and 2008, the number of filled jobs in GCR increased faster than in the rest of the UK but then dropped drastically in the aftermath of the financial crisis and only recovered to the pre-crisis level in 2015 (Figure 2.9, Panel A). Overall, in 2022, there were 115 000 more jobs in GCR than in 2000, corresponding to a 14% increase. This is a similar growth rate to the Scottish average (13%) but lower than the UK (23%). An increase in the number of jobs since 2000 was observed in most of the Local Authorities in GCR, except in Inverclyde and East Dunbartonshire, which recorded a 15% and 3% decrease, respectively.

Moreover, there has been a large increase in online job postings in the last two years, and the labour market in Glasgow City and the surrounding areas has tightened. The number of online job postings in Glasgow travel to work area4 tripled between 2020 and 2022, a faster increase than in the UK. The increase in online vacancies, coupled with a decrease in the number of unemployed people, has led to a tightening of the labour market (Figure 2.9, Panel B). This is consistent with the trends observed in the UK and many OECD countries (OECD, 2023[14]). Among sectors, exceptionally high demand was observed in human health & social work, which accounted for 25% of the vacancies advertised online. A higher share of vacancies than employment (15% in 2021) may indicate unmet demand in the sector.

Note: The number of job postings per year is an average of the quarterly number of postings.

Source: OECD’s calculations based on NOMIS [Jobs density] for the number of jobs NOMIS [Annual Population Survey] for the number of unemployed and Lightcast for the job postings.

While the unemployment rate in the Glasgow City Region is low and the labour market has tightened, economic inactivity remains a challenge. About 1 in 4 people (25%) aged 16 to 64 were economically inactive in GCR in 2023. The inactivity rate in GCR was higher than the Scottish (23%) and UK (21%) averages. It was also higher than in many UK cities, such as Manchester, London or Edinburgh, and high compared to many cities in the OECD (Figure 2.10, Panel A). However, over the last two decades, the economic activity of residents of GCR improved, and the inactivity rate decreased from 27% in 2004. A further reduction of the inactivity rate in GCR to the level observed in the best-performing OECD cities, such as Stockholm, would mean an extra 6 to 9% of the 16-64-year-olds, which translates to 70 000 to 100 000 additional workers in the labour market.

What is economic inactivity? Economically inactive are those who are not in employment and who (i) do not want a job, (ii) want a job but have not been seeking work in the last four weeks, or (iii) want a job and are seeking work but not available to start work in the next two weeks.

Figure 2.10. The inactivity rate remains high in the Glasgow City Region compared to other regions but differs across the Local Authorities

Inactivity rate, 15 to 64-year-olds

However, the inactivity rate differs across Local Authorities in the Glasgow City Region. The highest inactivity rate is observed in North Lanarkshire (28%), Inverclyde (27%) and Glasgow City (26%), above the UK average (Figure 2.10, Panel B). In contrast, South Lanarkshire has the lowest inactivity rate in GCR at 21%. That’s below the UK and Scottish averages and similar to the best-performing cities in the OECD on this metric.

Glasgow City has a strikingly high share of households where no adults work. 1 in 7, or 15%, of Glasgow City residents between 16 and 64 years old live in a workless household, defined as a household where no individuals aged 16 and over are employed. This is higher than the UK average (10%). A high share of workless households is a challenge not only because it may lead to poverty but also because it may perpetuate inactivity as children grow up in households where they cannot emulate the good work habits of their parents. The high share of workless households in Glasgow City is driven mainly by the prevalence of inactivity – 1% of the 16-64-year-olds lived in a household where all members were unemployed, 1.3% in a workless household with unemployed and inactive people, and 12.7% in a household where all members were inactive. However, it should be noted that the share of 16-64-year-olds living in workless households decreased over the last two decades from 23% in 2004.

In some Local Authorities, around five in ten inactive people would like to work. In GCR the share of inactive people who want a job (14%) is below the UK (18%) and Scottish (17%) averages. (Figure 2.11). In contrast, in Renfrewshire and North Lanarkshire, 20% and 18% of the inactive would like to work. These people represent an important untapped resource for the local economy and labour market.

Figure 2.11. A high share of the working-age population in Glasgow City is involuntarily inactive

Share of the inactive people by willingness to work, 2023

The inactivity rate in the Glasgow City Region after excluding students is mainly driven by a high incidence of long-term sickness. The high economic inactivity of the population poses a challenge to the local economy as it limits its growth potential. However, a high share of students are inactive temporarily while they invest in developing skills that will benefit the economy in the future, which means that high inactivity driven by enrolment in education does not need to be a negative phenomenon. In GCR, in 2023, 45% of the inactive were long-term sick, 3 and 7 percentage points higher than the Scottish and UK averages. However, it should be noted that over the last two decades, the share of the working-age population that was inactive for this reason decreased. The share of the inactive who take care of house/family (30%) is also higher in GCR compared to the UK and Scottish averages.

Poor health leading to the high incidence of disability in the population may be a barrier to employment in Glasgow City and some of the surrounding areas. Life expectancy in Glasgow City, 74 years for males and 79 years for females is the lowest in the UK (Figure 2.12) and lower than the OECD average, at 78 years for males and 83 years for females in 2021 (OECD, 2023[15]). Males in Glasgow City are expected to live over a decade shorter than males in Westminster (85 years), the area with the highest life expectancy in the UK. While women tend to live longer than men, life expectancy for women in Glasgow City is also lower than for the rest of the UK. This phenomenon, referred to as the “Glasgow effect”, persists even after controlling for deprivation, which is generally associated with poor health and a shorter lifespan (Glasgow Centre for Population Health, 2010[16]). In addition to overall low life expectancy, Glasgow City also fairs poorly in terms of healthy life expectancy, a measure of the average number of years a person would expect to live in good health (ONS, 2022[17]). Glaswegians report lower levels of life satisfaction and higher levels of anxiety than the UK average (ONS, 2022[18]).

Figure 2.12. Glasgow City has the lowest life expectancy in the UK

Life expectancy at birth in years by Local Authority, UK, 2017-2019

Poverty remains a challenge in Glasgow City and many of the surrounding areas

The three most income-deprived councils of Scotland are located in the Glasgow City Region. In Glasgow City, almost 1 in 5 people, or 19%, live in income deprivation. In Inverclyde and West Dunbartonshire, this figure is also high and stands at 14% and 13%, respectively. These three councils have the highest share of income deprivation in Scotland. Child poverty indicators also reflect income deprivation in Glasgow City and some surrounding areas. In 2021-22, over a third of children aged 16 or less lived in a poor household5 in Glasgow City (Understanding Glasgow, n.d.[19]). However, there are large differences in income deprivation in the metropolitan area (Figure 2.13). East Renfrewshire and East Dunbartonshire record one of the lowest rates of income deprivation in Scotland, at 7%, below the Scottish average (12%) (Scottish Government, n.d.[20]). Poverty in the metropolitan region is likely to be exacerbated by the cost of living crisis, i.e., the current period during which the price of everyday essentials increases faster than average household income, with Glasgow urban area experiencing higher inflation than most other cities in the UK (Rodrigues and Quinio, 2022[21]).

Income deprivation, as defined by the Scottish Index of Multiple Deprivation (SIMD), is a measure of the percentage of the population (adults and their dependents) in receipt of Income Support, Employment and Support Allowance, Job Seekers Allowance, Guaranteed Pension Credits, and Child and Working Tax Credits (Understanding Glasgow, n.d.[22]).

Figure 2.13. Three councils with the highest share of income deprivation in Scotland are located in the Glasgow City Region, but there are income disparities within the metropolitan region

Income deprivation in 2020 and gross disposable household income per head in 2021.

The high incidence of income deprivation in Glasgow City is in line with the low household income in the area. The gross disposable household income per head (GDHI), i.e., the amount of money individuals has for spending or saving, was GBP 17 215 per head in 2022 in Glasgow City. That was just above half of the GDHI in London and only 79% of the UK average. In relative terms, the GDHI in Glasgow City decreased over the last 20 years from 84% of the UK average in 1997. In 2023, the median annual pay in Glasgow City was also slightly lower than the UK figure, but the gap was smaller than in household income. In 2023, the median yearly pay in Glasgow City was GBP 28 840. That’s more than 20%, or GBP 7 400, lower than in London.

Gross disposable household income (GDHI) is the amount of money that all the individuals in the household sector have available for spending or saving after income distribution measures (for example, direct taxes, social contributions and benefits) have taken effect (ONS, 2016[23]).

There are large differences in pay and household income across the councils in the Glasgow City Region. Among the Local Authorities in GCR, Glasgow City and West Dunbartonshire have annual salaries below the UK median. In contrast, East Renfrewshire and East Dunbartonshire recorded a median income higher than in the UK of 31% and 20% respectively. Like in the case of pay, there are differences across the LAs in GCR in household income. The lowest GDHI per head in GCR was recorded in Glasgow City.

Labour productivity in the Glasgow City Region is below the UK average, but the gap has narrowed as the share of high-skilled workers and degree holders increased

The Glasgow City Region is underperforming compared to the UK and OECD in terms of productivity, and while that gap has narrowed in the last 20 years, it has recently started widening again. Workers in GCR are only 91% as productive as in the UK, measured as GVA per hour worked. The gap narrowed from 87% in 2004 to 93% in 2015, but it has recently started widening again. Labour productivity in GCR is also lower than in most comparable cities (Figure 2.14, Panel A). Low labour productivity is a broader challenge in the UK’s second-tier cities, i.e., major cities other than the capital. While in most large OECD countries, second-tier cities have productivity levels that are as high as, or higher than, the national average, the opposite is true in the UK (OECD, 2020[24]).

Figure 2.14. Labour productivity in the Glasgow City Region is low compared to other cities in the OECD

Labour productivity is below the UK average in all Local Authorities of the Glasgow City Region, but it is particularly low in Inverclyde. The lowest productivity is observed in Inverclyde, where, on average, the output of one hour worked was only 71% of the UK average in 2021. In contrast, in North Lanarkshire, the council with the highest productivity in GCR, GVA per hour worked was 97% of the UK average. While productivity increased in most of the councils in GCR over the last two decades, in Inverclyde, productivity relative to the UK average has been decreasing since 2013 (ONS, 2023[25]). Improving infrastructure, supporting technology adoption, and skills development could help address the disparities within GCR and ensure sustainable growth for all communities (see Chapter 3).

The share of degree-holders increased in the last 20 years in the Glasgow City Region, and it is now higher than the UK average, but there are still many Glaswegians with no qualification. In 2023, those holding a tertiary degree accounted for 57% of 25-64-year-olds in GCR, one percentage point lower than in Scotland but five percentage points higher than the UK average. The share of degree holders in GCR was higher than in many OECD cities, including Paris, Berlin and Brussels (Figure 2.15, Panel A). This results from a tremendous improvement in educational attainment in GCR, with the share of 25-64-year-olds holding a degree increasing from 30% in 2004 to 57% in 2023. At the same time, the share of those with no qualification nearly halved from 21% in 2004 to 12% in 2023 (Figure 2.15, Panel B). However, despite the overall increase in the educational attainment in GCR over the last two decades, the share of 25-64-year-olds with no qualification remains above the UK and Scottish averages by six and four percentage points, respectively.

Figure 2.15. The share of degree holders nearly doubled in the Glasgow City Region over the last two decades

Despite the increase in the number of degree holders, the share of high-skilled jobs remains below the Scottish average. In 2023, the employment structure in GCR comprised 52% of high-skilled workers, 37% of medium-skilled workers and 11% of low-skilled workers (Figure 2.16). While the share of high-skilled workers in GCR was still below the Scottish average of 58%, it equalled the UK average in 2023.

Figure 2.16. The share of high-skilled occupations in the Glasgow City Region is close to the UK average

Employment by occupation in GCR, Scotland and the UK, 2023

There are striking differences in the occupational composition and educational attainment within GCR. For example, in East Renfrewshire, the share of high-skilled workers was 68% in 2023, while it was slightly above 40% in North Lanarkshire and West Dunbartonshire, (Figure 2.17). There are also large differences in educational attainment. In East Renfrewshire, the Local Authority has the highest share of degree holders, and in 2023, over 70% of the 15-64-year-olds obtained a degree. This value is 26 percentage points higher than in West Dunbartonshire, the Local Authority with the lowest share of degree holders. Similar differences are observed in the share of the population with no qualification. In North Lanarkshire, 15% of 16-64-year-olds do not have a qualification. In contrast, this statistic stands at only 4% in East Renfrewshire.

Figure 2.17. There are large differences in occupational composition and educational attainment across councils in the Glasgow City Region

Share of high-skilled occupations and educational attainment by Local Authority, UK, 2023

Educational attainment differs even within Local Authorities and is lower in income-deprived areas. For example, there are large differences in the share of 17-21-year-olds entering university within Glasgow City. In the zone with the lowest university enrolment, almost none of the 17-21-year-olds enter university, while in the best zone on this metric, this statistic stands at 82% (Scottish Government, 2020[26]). Even in Local Authorities with high university enrolment like East Renfrewshire, there are zones, such as parts of Neilston and Uplawmoor or Arthurlie and Gateside, where few 17-21-year-olds enter university. Educational attainment is correlated with income deprivation. In the least deprived areas of Scotland, 17-21-year-olds are more likely to enter university than in the most deprived areas. At the same time, the share of the working-age population with no qualification increases with income deprivation of the area. The differences in educational attainment matter because they correlate with labour market outcomes. In GCR, more than eight in ten people (84%) with tertiary education are employed versus less than five in ten (46%) among people with no education.

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[24] OECD (2020), Enhancing Productivity in UK Core Cities: Connecting Local and Regional Growth, OECD Urban Policy Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9ef55ff7-en.

[9] OECD (n.d.), OECD Regional Outlook, OECD Publishing, Paris, https://doi.org/10.1787/2dafc8cf-en.

[12] ONS (2024), LFS: ILO Unemployment rate: UK: All: Aged 16-64: %: SA.

[10] ONS (2024), Regional gross value added (balanced) by industry: all ITL regions.

[27] ONS (2024), Travel to Work Areas, United Kingdom, 2011.

[25] ONS (2023), Subregional productivity: labour productivity indices by local authority district.

[17] ONS (2022), Health state life expectancies, UK: 2018 to 2020.

[18] ONS (2022), Personal well-being in the UK: April 2021 to March 2022.

[23] ONS (2016), Gross disposable household income (GDHI) for local enterprise partnerships: 1997 to 2014.

[21] Rodrigues, G. and V. Quinio (2022), Out of pocket: the places at the sharp end of the cost of living crisis.

[26] Scottish Government (2020), Scottish Index of Multiple Deprivation 2020v2 - indicators.

[20] Scottish Government (n.d.), Scottish Index of Multiple Deprivation 2020.

[5] The Migration Observatory (2022), Local data on migrants in the UK.

[1] UK Department for Environment Food & Rural Affairs (2022), , https://www.gov.uk/government/statistics/rural-productivity/rural-productivity-and-gross-value-added-gva.

[2] Understanding Glasgow (n.d.), .

[19] Understanding Glasgow (n.d.), Child poverty across Glasgow City Region.

[22] Understanding Glasgow (n.d.), Income Deprivation.

[7] Understanding Glasgow (n.d.), Net migration in Glasgow City Region, 2001/02 - 2021/22.

Notes

← 1. Glasgow City Region is Glasgow’s Functional Urban Area (FUA). A FUA comprises a densely inhabited city and the surrounding commuting zone and aims to include the full economic function of a city.

← 2. Using primary urban areas (PUAs) definition applied by the Centre for Cities, Glasgow includes the following Local Authorities: East Dunbartonshire, East Renfrewshire, Glasgow City, Renfrewshire.

← 3. Despite the de-industrialisation, some heavy industries, such as shipbuilding and aerospace industry, remain in the metropolitan area (Invest Glasgow, n.d.[28]).

← 4. Travel to work areas are statistical entities in the UK which have been created to demonstrate areas in which people live and work (ONS, 2024[27]).

← 5. Households are defined as living in poverty if their income is less than 60% of the UK median income.

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