Being NEET in Europe Before and After the Economic Crisis: An Analysis of the Micro and Macro Determinants

Abstract

In this paper, we analyse the main determinants of the propensity to NEET status in a selection of European countries. The NEET rate is the share of young people, aged between 19 and 30 years, not in Employment, Education or Training. In treating the 19–24 and 25–30 cohorts separately, our hypothesis is that for the younger cohort NEET status is mainly influenced by the school-to-work transition while for the older cohort this status is primarily due to labour market functioning and institutional factors. We apply different specifications of multilevel models with binary outcomes accounting for both personal and macro-economic factors which afford advantages over simple logit models. Estimates refer to 2007 and 2016 in order to verify how the economic crisis changed NEET status. The results confirm our hypothesis, highlighting the crucial role on the NEET propensity of the school-to-work transition in the first approach to the labour market, but also the strong influence of long-term unemployment, confirming the structural nature of the NEET phenomenon especially in countries where NEET levels remain high even during times of economic recovery.