Glenda Quintini and Stéphane Carcillo, OECD Employment, Labour and Social Affairs Directorate
Agnès attended a French High School but left at 16 with poor qualifications. She had not enjoyed school and was pleased to leave but now she would be pleased to go back as work has not been as pleasant or easy as she had expected. She found a job at a local burger company but hated it and felt that she had been very badly treated. She then got into restaurant work with some basic training which was much better but had then been laid off because they were cutting back on staff. She is living with her boyfriend who is also unemployed.
One of today’s top policy priorities around the world is to help people like Agnès and reduce extremely high youth unemployment while easing young people’s access to good quality jobs. As the first edition of “Youth Skills day” unfolds, about 40 million youth aged 15-29 in OECD countries are either looking for work or entirely disconnected from the labour market and from education and training. For the young people affected, this is a major setback that could have long lasting negative implications. For countries, not only does this represent human capital that is not being productively used but it also constitutes a financial cost as marginalisation from the labour market at such a young age is likely to bring about benefit dependency for life.
The so-called NEET rate (the share of youth neither in employment nor in education or training) currently stands at 14% in the OECD on average, up from 12.5% before the Great Recession. But in some countries, the problem is much bigger and has been exacerbated by the crisis. For example, the NEET rate rose by about 10 percentage points to exceed 20% in Greece, Italy and Spain.
The lack of skills is a major factor behind being NEET, along with a number of other barriers to employment – poor health, substance abuse, housing – that put NEETs at high risk of social and economic marginalisation. In Spain and England and Northern Ireland, 40% of NEET youth score at level 1 or below in literacy in the Survey of Adult Skills (PIAAC) – the lowest level of proficiency. And about a third do so in Canada and Norway. In addition, many have dropped out of general education – 40% of NEETs on average only have lower secondary qualifications – and have no recognised qualification to show for in the labour market.
To bring down this alarmingly high rate, the OECD Action Plan for Youth proposes a set of policies to tackle the current youth unemployment crisis and strengthen the long-term employment prospects of youth. It encourages countries to act fast to strengthen and expand cost-effective active measures such as short-term training, job search counselling or hiring subsidies – all crucial to prevent unemployed youth from disconnecting from job search, particularly in times of poor job creation. It also suggests acting now in areas that may take a while to bear fruit. For instance, prevention is better than cure and the accent is put on ensuring that the education system provides youth with the skills needed for the labour market.
A major challenge is how to deal with those young people who are not even looking for work. These youth typically fall through the cracks of safety nets. Reaching out to them and (re)motivating them in participating in education, training or any form of active programmes is challenging and requires frequent contacts as well as a good cooperation and information sharing between social and employment services.
Some programmes have been successful in helping NEETs get back into learning or employment – such as YouthBuild or JobCorps in the United States. They tend to have a significant hands-on learning component and often partner with employers to provide in-work learning modules. However, all this tends to be rather costly – often in excess of $10,000 per participant. Acting early, to prevent disengagement in the first place is therefore crucial. Apprenticeships and VET programmes, if available to all youth in education, can help prevent dropping out without qualifications in the first place, reducing the likelihood of becoming NEET.
Effective action to reduce NEET rates requires coordinated measures across all relevant ministerial portfolios and at the national and local level to ensure that youth acquire the right skills, bring those skills to the labour market and are able to utilise them effectively.
The OECD Action Plan for Youth is intended to build on and support existing national and local initiatives as well as the ILO Resolution on “The youth employment crisis: a call for action”, the G20 commitments on youth employment and the EU Council’s agreement on the Youth Guarantee.
Stéphane Carcillo et al. (2015), NEET Youth in the Aftermath of the Crisis : Challenges and Policies, OECD Social, Employment and Migration Working Papers, No. 164