Who are the persistently NEET young people?

Description

This report examines the group of young people aged 15–24 that are not engaged in education, employment or training (NEET). In particular, it examines those who are NEET for six or more months consecutively, known here as persistently NEET. Using data from the Longitudinal Survey of Australian Youth (LSAY), the report investigates the incidence of persistently NEET in this data, the socio-demographic characteristics associated with being persistently NEET, the activities of the group, and the outcomes at age 20­–24 of those who have a persistently NEET period at ages 15–19. The analysis found that non-completion of year 12, having children and coming from a lower socio-economic background are associated with being persistently NEET. It also found that having a persistently NEET period at ages 15–19 is associated with a greater likelihood of being persistently NEET at ages 20–24, and a lower likelihood of undertaking or completing a certificate III or higher level qualification by age 24. The Global Financial Crisis also appears to have had an impact on this group of young people.

Summary

About the research

Of enduring policy interest and concern are the transitions of young people from school to further education and the labour market. Young people represent the future workforce of this country so it is of great interest that young people make successful transitions. However, they do not all make these successful transitions and for some this may result in poorer outcomes later in life.

Using data from the Longitudinal Surveys of Australian Youth (LSAY), this investigation focussed on the group of young people not in education, employment or training (NEET), which is seen as a key indicator internationally of youth disengagement – and more specifically on those people who are NEET for longer periods of time, six or more months continuously, referred to as persistently NEET. While many young people experience episodes of being NEET in their early post-schooling years as they make their transition from education to the world of work, there is a small, more vulnerable group who experience periods of being persistently NEET.

It is argued that this group may represent those who are more at risk of poorer outcomes in the longer term than those who spend fleeting amounts of time being NEET; recognising that even within the more contained group of the persistently NEET there will be some who are not as vulnerable. Clearer information on this group of young people can help to develop nuanced policy responses that cater for the diverse individual and also broader labour market and institutional circumstances facing them. There is a need to better characterise this vulnerable group of young people in order to help target early and effective policy interventions.

This research investigates the incidence of being persistently NEET among those aged 15–24, the socio-demographic characteristics associated with the NEET state, and the outcomes at ages 20–24 for those who had one or more periods of being persistently NEET from ages 15 through to 19, as compared to their not persistently NEET counterparts.

Key messages

• Persistently NEET status is shown to be correlated with non-completion of year 12; having a child; and to some degree coming from a more disadvantaged background.
• There are some observed gender differences in the activities of the persistently NEET with males being more likely than females to be unemployed.
• The largest single activity for females with persistently NEET status and not in the labour force, was home duties or caring for children, whereas for males there was a variety of activities.
• Persistent NEET status at ages 15–19 is associated with further persistent NEET spells at ages 20–24. It is also associated with poorer education outcomes by age 24.
• Labour market conditions at the time that young people are transitioning from school to work can also impact on the probability of being persistent NEET. There is evidence that the Global Financial Crisis had an impact but differentially for those who were 18 at the time the effects were felt and those who were 21 at the time. This reflects their different underlying life stage dynamics.

Craig Fowler
Managing Director, NCVER

Executive summary

The journey of young people immediately post-secondary schooling is of significant interest for policy makers, the wider community and students and their parents. While it is commonly accepted that many young people may experience a short period of not being in education, employment or training (NEET) as a normal part of their transition from school to work and/or further education, of more concern are those individuals who experience 6 or more months of NEET continuously and are considered in this report as persistently NEET.

This group of persistently NEET young people are seen as being at risk of not making successful transitions to the labour market and having poorer employment and other outcomes later on. As a consequence, understanding the underpinning reasons that contribute to individuals being persistently NEET and the potential long term impacts are of significant interest as governments strive to develop and implement informed policy and programs that can support young people to prepare for life post–school.

This report provides a greater level of insight into the issues that contribute to persistently NEET with a focus on young people aged between 15 and 24.

The research explores:

• what socio-demographic characteristics are associated with being persistently NEET?
• what are the activities of the persistently NEET group of young people?
• what are the outcomes of those who have a persistently NEET period(s) at ages 15 through to 19 in terms of likelihood of:
  • persistently NEET period(s) between the ages of 20 and 24
  • studying for or completing a certificate III or above qualification by age 24
  • being employed at age 24?

The Longitudinal Surveys of Australian Youth (LSAY) survey students aged 15–25 as they transition from school to work. LSAY provides significant and nationally representative information about young people and their education, training, work, financial matters, health, social activities, and related issues. For this research, data were analysed for two cohorts of LSAY: 15 year olds who began the survey in 2003 and 15 year olds who began in 2006 (known as the Y03 and Y06 cohorts respectively). However, due to data availability for the Y06 cohort at the time of the analysis, only the first ten sample years were analysed; that is, when the cohorts were approximately 24 years of age. Furthermore, limitations to the data limit the generalisability of the results for this study, but nevertheless provide useful insights.

The size and socio-demographic characteristics of the group

In considering the extent of being persistently NEET across all the survey months, 6.7% of the Y03 cohort and 11.7% of the Y06 cohort had a persistently NEET period(s) (including those that dropped out of the survey at some point). There were clearly higher proportions of the survey sample that experienced a persistently NEET period(s) in the Y06 cohort as compared to the Y03 cohort with a proportional 5% increase in the Y06 cohort.

When the analysis focussed on a more restricted period of time, when survey respondents were aged 15 through to 19 (‘early’ NEET), the same trend in persistently NEET period(s) is apparent: 1.8% of the Y03 cohort and 6.5% of the Y06 cohort.

For participants who stayed throughout the duration of the survey, there were even higher proportions that had a persistently NEET period(s) at any time – 10.7% for the Y03 cohort and 17.1% for the Y06 cohort.

There could be a range of reasons contributing the increase in persistently NEET across the two cohorts. However, other research (Carcillo et al, 2015) has indicated that there was an increase in NEET in OECD countries following the Global Financial Crisis (GFC), and there is a high likelihood that the GFC is a high contributing factor to the observed increase in persistent NEET in the Y06 cohort.

The key socio-demographic characteristics identified from the samples that were clearly associated with being persistently NEET included:

• not completing year 12
• having children
• to some degree, coming from a more disadvantaged background.

The main socio-demographic characteristics can be used as predictors when examining longer term outcomes. The analysis indicates that the characteristics hold true across both the Y03 and Y06 cohorts and also whether individuals had a persistently NEET period at any time during the survey or at ages 15 through to 19 (the early persistently NEET group). In addition, the socio-demographic distributions of those who were persistently NEET in the Y03 cohort were more skewed, in comparison to the Y06 cohort, towards the lowest index of economic, social and cultural status (ESCS ) quartile, non-completion of year 12 schooling (particularly for the early persistently NEET), having children, being female and coming from a regional location. This is a possible effect of the GFC whereby it has affected young people who were aged 18, and at a critical period in their transition from school to work or further study, more evenly.

The main activities of the persistently NEET group

Information on activities for those not in the labour force and those who were unemployed was collected at the time of LSAY interviews. Analysis affords insight into the types of activities being undertaken by the persistently NEET group and provides a further dimension to the exploration of the socio-demographic characteristics. In considering the Y03 and Y06 cohorts, the main activities for those who were persistently NEET can be summarised as follows:

• Females were most likely to be undertaking home duties or caring for children and this formed the largest single component of activities for females.
• Males were observed to undertake a variety of activities including home duties or looking after children, travel or holiday, illness or inability to work, and other – the single largest category for males.
• Other covered a variety of activities that were stated by both males and females and included working to help family (unpaid), volunteering, informal study, caring (other than for children), waiting to start a course or job, and not doing any particular activity.

The research shows that persistently NEET males were much more likely than females to be unemployed as opposed to not in the labour force, even more so for the Y03 than Y06 cohort. Looking at the year on year activity for the persistently NEET group for both cohorts, there were clear increases in unemployment for both sexes in 2009. For females, there was an increase in undertaking home duties and caring for children that was identified in 2009, at which point the participants in the Y03 cohort were about 21 years old and the participants in Y06 cohort about 18 years old. This may also be an indicator point of the possible impact of the GFC of 2008; the follow-on effects of which were felt in 2009.

Longer term outcomes of those who have persistently NEET period at ages 15–19

In considering the longer term impacts of persistently NEET young people, we considered the ages 20 through to 24 for those participants who had a persistently NEET period(s) during the ages of 15 through to 19. In comparison to their not persistently NEET counterparts, these young people were:

• more likely to have a persistently NEET period at ages 20–24, in fact analysis indicated that it was 3 times more likely for the Y03 cohort and 5.4 times more likely for the Y06 cohorts
• less likely to be studying for, or to have achieved a certificate III or higher level qualification by age 24 for both cohorts
• less likely to be employed at age 24 for the Y06 cohort only (although no evidence was available for the Y03 cohort).

What does the analysis tell us?

The analysis in this research has highlighted that the persistently NEET group is diverse, fluctuates in size – which can be a response to external economic conditions – and that there are various underlying reasons for individuals experiencing persistently NEET periods. While it is not implicit that all young people who are persistently NEET are vulnerable, there seems to be a higher likelihood that could be the case than those young people who have less than six months of continuous NEET. These may include those of the group who have not completed year 12 schooling and those who have children under the age of 20 (which may be not in the labour force or unemployed). There are others in this group that warrant attention including those who are disengaged (which is difficult to separate out from our analyses), and some of those who are unavailable for work.

In terms of the role of Vocational Education and Training, it can provide an important pathway for some persistently NEET young people to gain further skills in addition to other community support to enable them in gaining meaningful and long-term employment and/or training.