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Publications:Focus on: The Long Shadow of NEET

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Date of publication: 15 December 2017

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"…there are shadows because there are hills" - E.M. Forster

Not many sociological concepts make it into the Urban Dictionary. The fact that NEET – young people Neither in Employment nor in Education or Training – is there demonstrates the enormity and permanence of the phenomenon as well as the social anxieties it has generated. In 2016, a third of the planet's youth was NEET, while almost 17 million young Europeans aged 20 - 34, or 1 in every 5 were NEET. Young people have begun to use the acronym to describe themselves. "I am a NEET," they say, or "soy ni-ni" in Spanish and "sou nem-nem" in Portuguese.

Many governments, international organisations, and NGOs have initiated studies, targets, and programmes on getting young people back into employment or education and training. More recently, we have begun to understand that the long-term implications of NEET – for individuals, states, and the EU – are even more problematic than the short-term effects.

The biggest risks NEETs face are poverty, social exclusion and political alienation. In the OECD, 26 % of young people live in poverty because they are NEET or work in low-paid jobs. NEETs are less likely to be interested in politics, to vote in elections, or to trust governments and public institutions. They are more likely to be single parents and suffer poor health.

Even more worrying are the long-term effects of having experienced a period of NEET. NEETs are more likely to be unemployed in the future and face a 20 % wage penalty for as long as 20 years. Scholars describe these effects as "scarring" – "permanently reducing a young person's future employment and earnings potential."

The NEET category is broad and diverse, encompassing young people who are looking for a job, those who have been discouraged from the job market long term, and even some who are voluntarily neither working nor studying. People who leave education early are at higher risk of becoming NEETs, although there are also significant numbers who complete secondary and even tertiary education. Nevertheless, in all EU countries, women, young people with low levels of education, low household income, migrant background and/or having a disability are more likely to become NEETs. The NEET status amplifies and deepens existing economic and social inequalities and makes it even harder for underprivileged youth to escape these disadvantages in the future. 

Eurostat data shows that the NEET rate for older age groups (e.g. 25-29 and 30-34 year olds) remains stubbornly high even though the rate for 20-24 year-olds and the overall NEET rate have decreased across all countries since 2013. This means that as the cohorts hit hardest by the financial crisis are getting older, a high percentage of them become NEET adults.

Most policy initiatives assume that NEETs simply need help in finding stable employment. But the NEET phenomenon has risen concurrently with profound changes in the nature of employment. The increase of precarious employment conditions and the rise of the gig economy may well mean that there is no secure work to which NEETs can eventually transition.

High NEET rates have long-term implications for states as well. Eurofound estimates that countries with high NEET rates like Greece and Bulgaria had a productivity loss between 3 and 3.5 % of GDP in just 2011. In addition to current costs (lower productivity and higher spending on unemployment and housing benefits), having so many unemployed young people means that there are lower pension contributions, adding more pressure in the future to the already strained pension systems. As older workers retire, a significant share of the labour force will be comprised of "scarred" generations lacking the needed education, skills, and work experience.

The average NEET rate for the EU hides an unequal distribution across states. The Netherlands, Denmark, Sweden, and Germany have consistently had a lower share of NEET young people (below 10 % in 2016). Spain, Greece, and Italy have had the highest NEET rates – approximately one-third of 20-34 year olds in Greece and Italy in 2016. The regional concentration of NEETs has harmful consequences for the European Union as a whole. Unequal rates of productivity and economic growth already plague the continent. The concentration of productivity losses and fiscal demands in countries already suffering the most severe economic problems will only deepen these divides. 

NEET casts a long shadow over the future. Most policy attention has rightly been on the young people currently in this status. But we need to prepare for what will happen to today's NEETs in the future. In two decades from now, will we need new sociological concepts:  FNEET (Formerly Not in Employment, Education or Training)? or PNEET (Permanently Not in Employment, Education or Training)? And which status will be most prevalent?

Authors: Ralitsa Donkova and David Crosier