What is... | October 6, 2015

What is a NEET?

The under-30s were hit harder by the 2007-2012 downturn than any other group, according to the global Organisation for Economic Cooperation and Development (OECD).

Since then, the proportion of NEETs – which the OECD defines as people aged 16-29 not in employment, education or training – worldwide has been growing. This worries many economists because education and training can boost employability – and people with jobs are more likely to enjoy the fruits of a growing economy and have long-lasting life satisfaction.

Fine chance
The OECD says NEET numbers had risen to 38.4 million – or 18% of the 16-29 age group – across OECD countries by the end of 2014. “Employed youth in OECD countries fell by more than 7.5 million between 2007 and 2012,” it says.

And young people who do have jobs are more likely to be in temporary, part-time or low-paid roles. “As a result, 44.7 million people aged 16-29, or 26% of the youth population, now live in poverty,” it says.

Long-term setback
Being a NEET can be a long-term setback. Young people who experience long periods of economic inactivity – neither working nor studying – can become “scarred” and see their lifelong employment and earnings potential suffer, researchers argue.

Popular stereotypes of NEETs may be misguided, however: analysis shows that NEETs come from all walks of life and face different challenges and living circumstances.

No obvious answer
In OECD countries in 2014, the highest proportions of NEETs were found in Turkey, Greece, Israel, Spain and Italy – except for Israel, countries that were badly hit by the 2007-2012 economic downturn. But this cannot be the whole story: Australia, an advanced economy which grew after the downturn, has also reported declining workforce participation among the young.

“Participation rates among women below 25 [in Australia] have been declining. Men’s participation rates generally prevail higher than women, but have been declining among the young (below 29),” writes the IMF in a September 2015 update.

What goes around
Is the trend structural, or just a phase? Some experts think the rising proportion of NEETs might be due to increasing professionalisation of the workforce. There are now fewer of the unskilled, partly-skilled, or blue-collar jobs that might have suited a proportion of young people entering the labour market.

Not just about youth
NEETs may find their horizons narrowed – perhaps becoming part of the so-called “boomerang generation”, returning home to live with their parents, for example. And the NEETs’ predicament may affect everyone. For example, it could act as a drag on long-term growth while at the same time increasing the costs to society.

It’s easy to see why the UN’s Sustainable Development goals included substantially reducing the proportion of NEETs worldwide by 2020 as a top priority.


eZonomics team
.(JavaScript must be enabled to view this email address)