What prolongs the duration of NEET status for youth? Evidence from Japanese panel data

Abstract

This paper examines the determinants of transition to the labor force status for non-labor force youth, known as NEET (not in employment, education, or training). We use panel data of Japanese youth who experience the NEET status to estimate the competing risk model from transition out of the status. The results show that although many NEETs exit the status within a year, there exists a negative duration dependence of joblessness. We also find that higher educational qualifications and job experience improve the transition from NEET, the impact of which varies with gender with respect to educational background. For men, graduation from university or a graduate school promotes the transition from NEET, but for women, graduation from a professional school and junior college also promotes the transition. Considering the difference between regular and non-regular employment, women tend to engage in work as non-regular employees, while men tend to be unwilling to work in non-regular employment. The hurdle for employment might be relatively higher among men, because their reservation values for work may be higher relative to women.