Indicator A2. Transition from education to work: Where are today’s youth?

The COVID-19 pandemic made economic conditions in 2020 difficult in most countries and they remain difficult in 2021. The job vacancy rate, the share of total posts that are vacant, in the 20 European countries of the OECD has dropped by about 25% from 2.2% in Q2 2019 to 1.6% in Q2 2020 as companies stopped hiring due to lockdown restrictions and a difficult economic context (Eurostat[2]). In many countries, the economic crisis has led to massive job losses, with no certainty that all jobs will be recreated after the economic crisis as the pandemic accelerated broader economic transformations, such as the digitalisation and transformation of jobs.

In hard economic times, the transition from education to work, which is always difficult, becomes really problematic. In the aftermath of the 2008 financial crisis, the unemployment rate among youth increased by almost twice the rate of the unemployment rate among adults (Bell and Blanchflower, 2011[3]). Indeed, the rise of youth unemployment during the first months of 2020 in some countries seems to repeat this scenario. For instance, in the United States, the unemployment rate among youth (15-24 year-olds) increased from 7.8% in February 2020 to 27.4% in April 2020. In Canada it increased from 10.4% to 27.3% over the same period. In many countries, unemployment rates reversed after the peak, but remained at a higher level than at the beginning of the year (OECD, 2021[4]) (OECD, 2020[5]). Moreover, vast research has shown that starting a career during a recession will have lasting economic and social consequences on job opportunities, pay, confidence and well-being (Scarpetta, Sonnet and Manfredi, 2010[6]).

The share of young adults (18-24 year-olds) neither in employment nor in education or training (NEET) has not changed remarkably between 2019 and 2020 in most countries with comparable annual data, and has increased from 14.4% in 2019 to 16.1% in 2020, on average across OECD countries. However, this share has increased by more than 4 percentage points over this period in Canada, Colombia and the United States (Figure A2.1). Similarly, the increase in the share of NEETs among 25-29 year-olds is particularly marked only in the aforementioned countries and has increased from 16.4% in 2019 to 18.6% in 2020, on average across OECD countries. Annual data have been used for this analysis, which could hide some important variations over the months (Fry and Barroso, 2020[7]).

The share of NEETs has increased only slightly between 2019 and 2020 in many countries, partly because more young people have extended their studies. Particularly, in Austria, France, Poland, Portugal and Slovenia, further education helped to limit the increase in the share of NEETs. For instance, in Portugal, the share of young adults aged 18-24 year-olds that are NEET has increased by less than 2 percentage points between 2019 and 2020, while the increase in young adults in education has increased by 4 percentage points, from 54% in 2019 to 58% in 2020. Similarly, in France, the share of NEETs has remained stable between 2019 and 2020, but the share of young adults in education has increased by 2 percentage points, from 54% to 56% over this period (Table A2.2).

Governments across the world reacted quickly to the economic challenges that the youth are facing. For example, the European Commission has launched the “Youth Employment Support: A bridge to jobs for the next generation” (European Commission, 2020[8]). Depending on the speed of the economic recovery, the education-to-work transition may be smoother in the future.

On average across OECD countries, almost half (47%) of 18-24 year-olds are not in the education system. In Brazil, Colombia and Israel, more than 65% of these young adults are not in education. The pattern is reversed in Greece, Luxembourg and the Netherlands and Slovenia, where about two out of three young adults are in education (Figure A2.1. and Table A2.1).

For the older group of 25-29 year-olds, only 16% are in education on average across OECD countries, and the share is less than 10% in Belgium, Colombia, the Czech Republic, France, Hungary, Latvia, Lithuania, Mexico, Poland and the Slovak Republic. However, in Denmark, Estonia, Finland, Iceland, Israel and Sweden, over 25% of 25-29 year-olds are in education (OECD, 2021[9]).

Young adults no longer in education may be employed, unemployed or inactive. On average across OECD countries, among the 47% of young adults aged 18-24 years-old who are not in education, about two-thirds of young adults are employed and about a third i are inactive or unemployed (20% are inactive and 13% are unemployed). The proportion of young adults who are employed varies considerably from country to country. Across OECD and partner countries, among all 18-24 year-olds not in education, 75% or more are employed in Austria, Germany, Iceland, the Netherlands, New Zealand, Sweden, Switzerland and the United Kingdom, and 80% or more are employed in Norway. In other countries, young people have experienced more difficulty entering the labour market when they leave the education system. For instance, in Brazil, Greece, Italy and Turkey, less than half of 18-24 year-olds who are not in education are employed (Figure A2.2.).

On average across OECD countries, 15.1% of 18-24 year-olds are NEETs. Across OECD and partner countries, the range of NEETs is large: in Germany, Iceland, Luxembourg, the Netherlands, Norway, Slovenia, Sweden and Switzerland, the share of NEETs is less than 10%; it is between 20% and 30% in Argentina, Chile, Costa Rica, Italy and Mexico; and more than 30% in Brazil, Colombia and Turkey. In most countries, inactivity is more common than unemployment: on average across OECD countries, 9.3% of 18-24 year-olds are inactive NEETs and 5.9% are unemployed NEETs. However, in France, Iceland, Portugal and Spain, the share of unemployed NEETs exceeds that of inactive NEETs (Figure A2.2.).

In 2020, the share of NEET young adults aged 18-24 years old was 15.1% on average across OECD countries, one of the lowest rates since 2000. This reflects the decreasing trend since the 2008 financial crisis. The share on average across OECD countries was 18.7% in 2009, reaching its peak of 19.2% in 2010, then gradually decreasing each year since (Table A2.1 and OECD (2021[9])).

Various dimensions such as gender, age, educational attainment and migration status affect the risk of becoming NEET.

Young women are more likely to be NEET than young men. Across OECD countries, 16.5% of 18-24 year-old women are NEET while the share among men of the same age is slightly lower (14.0%). Although women are more likely to be NEET, the reasons for being so are not the same as for men: in almost all OECD and partner countries, most NEET women are inactive while most NEET men are unemployed. On average, in 2020 almost 70% of NEET women were inactive, while the share was about 50% among NEET men. The Slovak Republic, Sweden and Turkey show a strong gender gap in the composition of the inactive population: at least 30 percentage points in favour of men (OECD, 2021[9]) and Figure A2.3.).

Several reasons account for inactivity among women, among them childcare responsibilities, while health and other factors are more prevalent factors of inactivity among men (OECD, 2016[10]). When interpreting the figures for inactive NEETs, it should be noted that some are only temporarily inactive and may soon re-enter employment, education or training. Nevertheless, a small share may also have become discouraged and stopped looking for work because they believe that there are no job opportunities for them (Eurofound, 2016[11]).

Young adults in their upper 20s are more likely to be NEET than their younger peers. This is particularly true for women. Among women, the share of inactive NEETs increases with age, while it remains more or less stable among men. On average across OECD countries, among 18-24 year-olds, 11.2% of women and 7.5% of men are inactive NEETs, a gender gap of 4 percentage points. Among 25-29 year-olds, the share increases to 17.3% for women and decreases to 6.4% for men, a gender gap of more than 10 percentage points (OECD, 2021[9]).

The differences in the share of unemployed NEETs by gender and age are small. On average across OECD and partner countries, the share of 18-24 and 25-29 year-old women who are NEETs and unemployed is approximately 1-2 percentage points below the share for men. Shares of unemployed NEETs are all at about 5-7%, with the exceptions of Brazil, Colombia, France, Greece, Italy, South Africa, Spain and Turkey, all of which are above 7% for both genders and ages 18-24 and 25-29 (OECD, 2021[9]).

In most OECD and partner countries, foreign-born young adults (15-29 year-olds) are more likely to be NEET than native-born ones. On average across OECD countries, 19% of foreign-born young adults are NEET, compared to 14% of their native-born peers. This pattern is particularly evident in Austria and Greece, where the difference exceeds 15 percentage points, but also in Belgium, Costa Rica, Estonia, France, Italy and Spain, where the difference in the share of NEETs between these two groups is still more than 10 percentage points. However, in some countries, no significant difference in the share of NEETs among native-born and foreign-born adults is found; this is the case in Canada, Chile, the Czech Republic and the United Kingdom (Figure A2.4.).

Early arrival in the country is associated with a lower risk of being NEET. On average across OECD countries, the share of NEETs among the native-born and those who arrived by the age of 15 or younger are 14% among both groups, while the share of NEETs among those who arrived at age of 16 or later is 22%. In Italy and Slovenia, the difference in the share of NEETs among foreign-born young adults who arrived in the country at the age of 16 or older is particularly high and exceeds 20 percentage points. This underlines the importance of education in helping younger people acquire sufficient language and cultural skills to participate in society and other key skills required by the labour market (OECD, 2018[12]).

The proportion of young people who are neither employed nor in education or training (NEET) shows significant subnational variation as well as national variation across OECD and partner countries. Across OECD countries and regions, the share of 18-24 year-old NEETs ranges from as low as 2% in Toukai (Japan) to as high as 50% in South-eastern Anatolia – Middle (Turkey) (OECD, 2021[13]).

In 18 OECD and partner countries, the subnational regions with the highest share of 18-24 year-old NEETs have at least a 10 percentage-point higher rate than the regions with the lowest shares. In Colombia, Greece, Italy, the Russian Federation and Turkey, the gap is higher than 20 percentage points. For instance, one of the highest regional disparities in the share of NEETs are found in Italy: in Sicily, more than one out of three young adults are NEET (39%), which is almost 30 percentage points higher than the share of NEETs in the Province of Bolzano-Bozen, the region with the lowest share of NEETs (11%) (OECD, 2021[13]).

Across the OECD and partner countries, regional differences in NEET rates are the smallest in Denmark, Finland, Japan, the Netherlands, Norway and Slovenia, where the difference between the regions with the highest and lowest shares is less than 5 percentage points. Each of these countries has ten or fewer subnational regions. In Japan, the share of NEETs is less than 5% in all ten subnational regions (OECD, 2021[13]).

Income and job opportunities tend to be more concentrated in cities across the OECD. However, distinct trends can be observed in the relative proportions of NEETs in capital cities across OECD countries. In 14 out of 34 OECD and partner countries with available data and at least 2 subnational regions, the capital city region has the lowest share of NEETs, while in Austria and Belgium, the capital city region has the highest NEET rate in the country (OECD, 2021[13]).

Educational attainment refers to the highest level of education successfully completed by an individual.

Employed, inactive and unemployed individuals: See Definitions section in Indicator A3.

Individuals in education are those who had received formal education and/or training in the regular educational system in the four weeks prior to being surveyed.

Levels of education: See the Reader’s Guide at the beginning of this publication for a presentation of all ISCED 2011 levels.

NEET: Neither employed nor in education or training.

Data from the national labour force surveys usually refer to the second quarter of studies, as this is the most relevant period for knowing if the young person is really studying or has left education for the labour force. This second quarter corresponds in most countries to the first three months of the calendar year, but in some countries to the second three months (i.e. April, May and June).

In the first section in this indicator, “Education and the labour market for the youth and the impact of the COVID-19 pandemic”, annual data from national labour force surveys (LFS) have been used for 2019 and 2020.

Education or training corresponds to formal education; therefore, someone not working but following non-formal studies is considered NEET.

When interpreting the results on subnational entities, readers should take into account that the population size of subnational entities can vary widely within countries.

Please see the OECD Handbook for Internationally Comparative Education Statistics 2018 (OECD, 2018[14]) for more information and Annex 3 for country-specific notes (https://www.oecd.org/education/education-at-a-glance/EAG2021_Annex3_ChapterA.pdf).

For information on the sources, see Indicator A1.

Data on subnational regions for selected indicators are available in the OECD Regional Statistics (database) (OECD, 2021[13]).

References

[3] Bell, D. and D. Blanchflower (2011), “Young people and the Great Recession”, Oxford Review of Economic Policy, Vol. 27/2, pp. 241-267, https://EconPapers.repec.org/RePEc:oup:oxford:v:27:y:2011:i:2:p:241-267.

[11] Eurofound (2016), Exploring the Diversity of NEETs, Publications Office of the European Union, Luxembourg, http://dx.doi.org/10.2806/62307.

[8] European Commission (2020), Commission launches Youth Employment Support: a bridge to jobs for the next generation, https://ec.europa.eu/social/main.jsp?catId=89&newsId=9719&furtherNews=yes&langId=en& (accessed on 26 May 2021).

[2] Eurostat (2021), Job vacancy statistics by NACE Rev. 2 activity - quarterly data [jvs_q_nace2], https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=jvs_q_nace2&lang=en (accessed on 26 May 2021).

[7] Fry, R. and A. Barroso (2020), Amid coronavirus outbreak, nearly three-in-ten young people are neither working nor in school, https://www.pewresearch.org/fact-tank/2020/07/29/amid-coronavirus-outbreak-nearly-three-in-ten-young-people-are-neither-working-nor-in-school/ (accessed on 26 May 2021).

[9] OECD (2021), Education at a Glance Database - Transition from education to work, http://stats.oecd.org/Index.aspx?datasetcode=EAG_TRANS (accessed on 18 May 2021).

[13] OECD (2021), “Regional education”, OECD Regional Statistics (database), https://dx.doi.org/10.1787/213e806c-en (accessed on 25 June 2021).

[4] OECD (2021), Unemployment rate by age group (indicator), https://dx.doi.org/10.1787/997c8750-en (accessed on 26 May 2021).

[1] OECD (2020), International Migration Outlook 2020, OECD Publishing, Paris, https://dx.doi.org/10.1787/ec98f531-en.

[5] OECD (2020), OECD Employment Outlook 2020: Worker Security and the COVID-19 Crisis, OECD Publishing, Paris, https://doi.org/10.1787/1686c758-en.

[12] OECD (2018), Education at a Glance 2018: OECD Indicators, OECD Publishing, Paris, https://dx.doi.org/10.1787/eag-2018-en.

[14] OECD (2018), OECD Handbook for Internationally Comparative Education Statistics 2018, OECD Publishing, Paris, https://doi.org/10.1787/9789264304444-en.

[10] OECD (2016), Society at a Glance 2016: OECD Social Indicators, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264261488-en.

[6] Scarpetta, S., A. Sonnet and T. Manfredi (2010), “Rising Youth Unemployment During The Crisis: How to Prevent Negative Long-term Consequences on a Generation?”, OECD Social, Employment and Migration Working Papers, No. 106, OECD.

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