Alastair Wood and Stéphane Carcillo, OECD Employment, Labour and Social Affairs Directorate
In the 1955 film Rebel without a cause, Jim Stark (played by James Dean) is an alienated and unhappy young man in mid-1950s America. He and his friends form a trio that evokes youthful pain, torment and bewilderment. The film’s focus is on teenage rebellion and parental neglect, and it conveys an important message about listening to the needs and desires of our youth population. Today’s youth (aged between 15-29) have been hit particularly hard by the financial crisis and Great Recession; they have been struggling to make a successful start to their working lives in very difficult times. At its peak, youth unemployment reached an average of 17% in OECD countries (far higher than the rest of society) and hit an astonishing 60% in Greece. OECD’s Society at a Glance 2016 puts young people under the spotlight, looks at how they are holding up in society and shows which of their needs are not being met.
But it is not just about unemployment. Many young people are not at school and are not even looking for a job. Taking the unemployed and the inactive together shows that in 2015, about 40 million young people, a total of 15% of all OECD youth, were not in employment, education or training (the so-called NEETs). Beyond the moral dilemma, the opportunity cost of having such a large number of young people being isolated from society is estimated to have been between 360-605 billion US dollars in 2014 alone (0.9-1.5% of OECD-wide GDP, depending on the wage level used to impute income – minimum wage or median wage) – this is the income that could have been generated had they been better integrated into society.
Low-skilled youth are particularly at risk of long-term isolation and disengagement from society. Those who have not finished high-school are 3 times more likely to be unemployed or “inactive” while only one quarter of NEETs have higher education qualifications. People with low-skilled parents or unemployed parents are also more likely to be NEET, suggesting an intergenerational transmission of disadvantage. Lower educated parents may not be able to encourage higher education as much, they may not be able to help as much with homework, and they often lack social networks to help their children get their first work experience. For similar reasons, and due to language difficulties and possibly also discrimination, youth born outside their country of residence are 1.5 times more likely to be NEET than native youth. Being female adds to the NEET risk. Young women are one and a half times more likely than men to be unemployed or “inactive”, often because they are caring for children and other family members, especially in Mexico and Turkey.
Fortunately, for many young people, inactivity and unemployment is only temporary. But for a significant fraction, it is a lasting curse. About half of all NEETs experience such isolation for more than a year. The low educated account for 17% of the youth population, but represent 30% of those who spend more than 12 months as a NEET; young people with health problems are also over-represented. Taking a short time out of work to care for children or to travel can be great and have no negative effects, but longer periods risk harming future employment opportunities and earnings.
Better policies are needed to foster self-sufficiency among young people and bring back their trust in society and politics: the report shows that we need to continue fighting early school leaving; it also documents how apprenticeships are a valuable alternative to academic schooling and can help bring more young people smoothly into the labour market. Intensive second chance programmes targeted at high-school dropouts motivated to catch up on their skills are also needed. For women, ensuring access to high quality childcare helps them re-join the labour market (France, Denmark and Sweden are good examples), and improving uptake by fathers in parental leave can also help young women’s careers. Efforts are also being made at the international level. Policy makers from the G20 economies collectively committed to reduce the share of young people most at risk of being left permanently behind in the labour market by 15% by 2025. At the EU level, the Youth Guarantee is also a good opportunity to reduce the number of youth who fall through the cracks and make them an employment or training offer.
Not surprisingly, NEETs are less satisfied with their lives compared with their peers – 22% reporting low levels of life satisfaction compared to 14% overall. Feeling isolated and disconnected means that they often have no interest in society and only 18% report that they trust others compared to 29% of youth overall. Sixty years after Nicholas Ray’s film, they can probably understand Jim when he says “Boy, if, if I had one day when…I felt that I belonged someplace, you know?”