Investing in Disadvantaged Youth – Challenges and Policies

By Sebastian Königs.

The Great Recession has hit youth harder than any other group in the labour market, and the situation has improved only little since. While public debates about youth labour market outcomes tend to focus on the concerning levels of youth unemployment – around 50% in Spain and Greece, 40% in Italy, and 25% in France – a better measure of labour market performance among young people is the rate of youth not in employment, education or training (the ‘NEETs’). The main reason is that unemployment is only part of the problem: an even greater share of young people are out of education or work but not looking for a job, and these inactive youth are not captured by the youth unemployment rate. Together, inactive and unemployed NEETs accounted for around 14% of all 15-29 year-olds in OECD countries in 2014, 1.5 percentage points more than before the start of the crisis (OECD Employment Outlook, 2015). Many of these youth, and particularly those at risk of remaining NEET for longer, have a disadvantaged background.

Identifying risk factors for NEET status is essential for designing policies that effectively address barriers to independence: a recent OECD Working Paper documents that NEETs are far from a homogeneous group both within and across countries: low educational attainment can be an important driver of NEET status, with about one out of three NEETs in OECD countries not having attained a high school degree. Data from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) presented in the most recent OECD Skills Outlook show that many NEETs have only low literacy or numeracy skills. Non-educational barriers matter too: NEET inactivity is particularly high among young women in their late twenties, many of whom remain out of the labour market to care for a child. The incidence of single parenthood is three times as high among NEETs as for other youth. Among young males, NEET inactivity is often due to health issues – including mental health problems and substance abuse –, and more generally, the share of NEETs who report suffering from bad health is three times as high for NEETs as for other youth. Social disadvantage moreover persists across generations, as NEETs’ parents have lower educational attainment and are more likely to be out of work than parents of youth in education or employment (see Figure).

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The OECD’s most recent Investing in Youth’ country reviews identify three broad streams of solutions to provide disadvantaged youth with the skills they need and thus reduce the share of youth outside of education or employment:

  1. Fighting early school-leaving: Youth without upper-secondary education are strongly over-represented among NEETs, and tackling early school leaving is therefore key to reduce NEET rates. However, poor schooling outcomes are not just the consequence of learning difficulties, but may for instance reflect family problems or mental or physical health issues. To avoid an accumulation of disadvantage that may ultimately lead to drop-out, such issues need to be identified early and addressed quickly. The solutions offered to a troubled young person should moreover address social and educational issues jointly. Intensive counselling and mentoring can be further components to reduce drop-out rates and help young people get the necessary qualifications for a successful transition into work. A challenge however is that education systems often work in silos, while a timely sharing of information between schools, social and employment services is instrumental for identifying at-risk youth.
  2. Providing relevant practical training: High-quality practical training can help smooth school-to-work transitions by making educational programmes attractive to young people while providing them with skills that are valued in the labour market. To ensure quality and relevance, training should be partly company-based, ideally in the form of apprenticeships. But succeeding in vocational programmes can be challenging for the most disadvantaged, who may lack foundation skills or motivation. Pre-apprenticeship programmes can help prepare young people with skills gaps for participation in standard vocational education programmes.
  3. Offering NEETs a programme guarantee: ‘Youth Guarantees’ that entitle NEETs to participate in training or work experience programmes can be a powerful tool for bringing youth back into education or stable employment. They contribute to improving young people’s labour market skills while preventing idleness and helping identify potential non-educational barriers. Successful implementation of youth guarantees can however be challenging, notably in countries with high unemployment and / or low administrative capacity: not all inactive youth are in contact with governmental services, and reaching out to the most disadvantaged among them is difficult. Programme quality and targeting are moreover crucial, and participation in the wrong programme can have negative effects on employment outcomes. A tight coordination with local employers and social services is moreover key to ensure that programme contents are relevant. Intensive and comprehensive ‘second-chance’ learning options, which combine education with social support and housing, are needed for drop-outs who are not willing or able to return to mainstream schooling.

‘Investing in Youth’ reviews on Brazil, Tunisia and Latvia have already been published. Reviews are upcoming on Australia, Lithuania, Norway, Sweden and Japan.

Further resources

OECD work on youth: http://www.oecd.org/youth.htm

OECD Action Plan on Youth: http://www.oecd.org/employment/action-plan-youth.htm

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