Economic outcomes of youth not in education, employment or training (NEET) (WP 15/01)

Abstract

The paper examines the outcomes of youth not in education, employment or training (NEET) up to four years after the initial long-term spell of NEET. The paper covers outcomes of NEETs in relation to benefit receipt, education, employment and future inactivity. These outcomes are compared across NEETs and a control group of non-NEETs. Propensity Score Matching is used to control for observed characteristics of NEETs and controls to ensure that outcomes are not driven by underlying differences in specific characteristics. The paper finds that individuals who experience a long-term spell of NEET in their youth experience relatively poorer outcomes than their control group peers after the first two years. Long-term NEETs are less likely to be employed, are more likely to be inactive and/or receiving a benefit. There are no differences in the rates of study. The differences in outcomes between NEETs and the control group are reduced after four years.

Acknowledgements

The authors would like to acknowledge the enormous contribution made by Sarah Crichton throughout the entire process. Some of the analysis would not have been possible without Sarah's excellent guidance.

The authors would like to acknowledge Sylvia Dixon and Judith Archibald for their advice during the initial stages of the project. We thank Gail Pacheco, Sylvia Dixon, Jason Timmins and Polly Vowles for their helpful reviewer feedback.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

The results in this paper are not official statistics; they have been created for research purposes from the Integrated Data Infrastructure (IDI) managed by Statistics New Zealand. The opinions, findings, recommendations and conclusions expressed in this paper are those of the authors, not Statistics NZ.

Access to the anonymised data used in this study was provided by Statistics NZ in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular person, household, business or organisation and the results in this paper have been confidentialised to protect these groups from identification.

Careful consideration has been given to the privacy, security and confidentiality issues associated with using administrative and survey data in the IDI. Further detail can be found in the Privacy impact assessment for the Integrated Data Infrastructure available from www.stats.govt.nz.

The results are based in part on tax data supplied by Inland Revenue to Statistics NZ under the Tax Administration Act 1994. This tax data must be used only for statistical purposes, and no individual information may be published or disclosed in any other form, or provided to Inland Revenue for administrative or regulatory purposes.

Any person who has had access to the unit-record data has certified that they have been shown, have read, and have understood section 81 of the Tax Administration Act 1994, which relates to secrecy. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes, and is not related to the data's ability to support Inland Revenue's core operational requirements.