Recent policy developments related to those not in employment, education and training (NEETs)

Introduction

Across Europe, there is growing evidence of young people being excluded from the labour market and society. Young people have been hit hard by the recession and their transition from education to work has become very difficult. This disengagement from the labour market may have lasting effects. It is certainly resulting in a growing core of disaffected youth who are distanced to such an extent from the labour market and from society itself that they need considerable support to re-engage.

Unemployment is high among all young people in comparison to adults and has worsened since the economic crisis; young people accounted for almost one-fifth (17.8%) of the increase in unemployment between 2008 and 2010 (European Commission, 2010a). This is partly because of the precarious situation of many young people who are in work – they were often among the first to lose their jobs as their temporary contracts were not renewed. Job prospects for young people entering the labour market may also have diminished as they are now competing with jobseekers with more employment experience in a market with fewer jobs to offer.

The labour market situation of young people has traditionally been illustrated through indicators such as the employment and unemployment rates (European Commission, 2010b). However, it has been recognised that such indicators give only a limited picture of the labour market and social situation of young people, since many young people are not in the labour force because they are still in school, training or university. Therefore, the concept of ‘NEETs’ has come to be commonly used to describe this group. The acronym NEET stands for young people ‘not in employment, education or training’, and the first emerged in the UK where, during the 1980s, it was used as an alternative method of categorising young people in line with changes in unemployment benefit policies (Furlong, 2007). NEETs have also caught the attention of policy-makers across the EU as a useful indicator for monitoring the situation of young people in the context of the Europe 2020 Employment Guidelines (European Commission, 2010b).

As defined by Eurostat, the NEET category encompasses all unemployed and inactive young persons who are not in any education and training (European Commission, 2010b). This definition is seen to be more suited to capturing the extent of the group of young people who are disengaged from both work and education and therefore at greater risk of unemployment and social exclusion later in life.

In 2010, over a tenth of young people aged 15–24 in Europe were NEET (in total 7.4 million), with the EU27 average NEET rate at 12.8%, an increase of two percentage points compared to 2008. However the rates vary considerably across the EU, with the highest rate in Bulgaria (21.8%) in 2010 and the lowest rate in the Netherlands (4.4%). The problem is also particularly acute in Ireland, Italy, Spain and Latvia. The situation is no better for those aged 25–29, as shown by the Eurofound elaboration of 2009 Labour Force Survey data, with around one-fifth of the age cohort being classified as NEETs.

However, the NEET definition does not necessarily mean that this is a heterogeneous group; on the contrary, it includes young people with widely differing backgrounds and a range of reasons for falling into NEET status.

NEET sub-groups range from the most disadvantaged and disengaged to those who become NEET after dropping out of a course or losing a job (LSN and IES, 2009), or simply deciding to be NEET. Thus the NEET category encompasses young people who have no or little control over their situation, such as the unemployed, those suffering from an illness, the disabled and young carers, and also sub-groups who do have control over their situation, including young people who are not seeking work or a place in education or training and are not constrained from doing so by other obligations or incapacities. The NEET category also includes those young people who are involved in constructive activities such as unpaid voluntary work, art projects and travelling during ‘gap years’ (Eurofound, 2011a).

A number of social, economic and personal factors, including both individual and family background factors, that are likely to increase the chances of an individual becoming NEET have been identified in the literature (Eurofound, 2011a; LSC, 2006). In particular, young people with a low level of educational attainment, young people with a disability and young people from an immigrant background are more likely to be NEET. Nonetheless, it is important to highlight that, as a result of the economic crisis, a large share of young adults with tertiary education are now also at risk of ending up in NEET status. In countries such as Estonia, Greece and Italy around one-fifth of young people with a tertiary education degree are NEETs.

This implies that even if being NEET is often a consequence of deprivation (often transferred over generations) and disadvantage (such as financial problems, substance abuse issues, criminal activity, low self-esteem, low attainment at school of both parents and children or a complex combination of such factors) (LSC, 2006), being NEET is not the same as being deprived. As shown above, high-achieving young people can become NEET if there are few jobs on offer and the skills of some highly educated young people are not in high demand by employers, as a result of skills mismatch.

Targeting youths who are NEET is extremely important, as being NEET at a young age can have devastating consequences; it is widely agreed that a spell of unemployment early in a young person’s working life can have long-term or ‘scarring’ effects. These effects can influence not only the young person’s employment prospects and income but also their health status and job satisfaction. A study using UK data published in 2009, for example, found that unemployment when a young person is in his /her early 20s can generate permanent scars in terms of unemployment, health status, wages and job satisfaction. This is not the case for unemployment among people in their 30s (Bell and Blanchflower, 2009). Another study into the longer-term consequences of being NEET found links to persistent offending, as involvement in criminal activity amongst 18–30-year-olds is highly correlated with ‘having been excluded from school, having no or low qualifications and regular drug and alcohol misuse’ (Coles et al, 2002). The effects continue throughout the young person’s lifetime and even their pension entitlements may be reduced due to periods of unemployment and involvement in low-paid work (Coles et al, 2002). Furthermore being NEET is also an enormously costly problem, both for the individual and their family, as well as for society as a whole. In Finland, for example, the cost of exclusion at a young age has been calculated at €27,500 per young person per year (Valtiontalouden tarkastusvirasto, 2007). In the UK, the average individual lifetime public finance cost of being NEET was estimated at around GBP 52,000 (around €60,900) in 2002, increasing to a lifetime cost of an estimated GBP 56,300 (around €66,000) according to calculations in 2009 (Coles et al, 2010). More recently, Eurofound (2011a) has found that the cost of the problem reaches around €100 billion per year across a sample of 21 European countries.

It could be argued that the term ‘NEET’ crept into the policy vocabulary without much consideration being given to what it means and what it tries to capture. Therefore the term NEET draws attention to the multifaceted nature of disadvantage. It includes different groups with varying needs but who are highly likely to be unemployed regularly or persistently or to be out of education and training in the short- to medium-term. For this reason, while it is correct to set targets to reduce the overall numbers of ‘NEETs’, policies and interventions should take account of the varying needs of the different sub-groups among the NEET population (Eurofound, 2011a).

Within this framework, this report aims to investigate the policy measures that Member States have adopted in recent years in order to re-engage young NEETs into education and employment. In fact, as there is a clear recognition of the importance of tackling the problem of NEETs at European level, highlighted in policy documents as well as in the setting of targets and recommendations to Member States at the national level, there seems to be a rising level of awareness of the issue. This is confirmed by the ERM country experts for this CAR, who were asked to assess the level of interest among different stakeholders in their country (policy-makers, the media, employers and trade unions) in the issue of NEETs.

With regard to measures tackling early school leaving and measures to make the transition from education to employment easier, the report outlines the way in which countries across Europe are focusing their policy responses on certain sub-groups of the overall NEET population, in order to develop more tailored and personalised support.

An overview is given of measures that have been introduced at national level in order to tackle the problem of NEET in relation to the following core themes.