Dr Andrea Barry
Senior Economist at Youth FuturesIn this article, Dr Andrea Barry, Senior Economist at Youth Futures Foundation, breaks down a new way of thinking about young people not in employment, education, or training (NEET) and how by identifying those at risk of becoming NEET, we can effectively target help to them.
The UK youth labour market has been middle-of-the-pack in the Organisation for Economic Co-operations and Development (OECD) for many years, with many of the most vulnerable remaining inactive for long periods of time. This leads to a significant proportion of young people at risk of being stranded in low-wage work or not in employment, education, or training (NEET).
Given the long-term global trends, including climate change, technological advancements, and demographic shifts, those entering the workforce over the coming years face increasing risks of their jobs being automated, growing skills gaps, and rising inequality. In the UK, these trends could exacerbate existing issues in the youth labour market and leave behind disadvantaged young people.
Lost Opportunities
The Youth Employment Index (2022) was developed by PwC to gain a holistic picture of youth employment performance across the OECD. In this Index, the UK ranks 18th with a score of 52, whereas Germany ranks third with a score of 66. If the UK were to lower its NEET rates to the levels present in Germany, this would increase UK GDP by 1.8 per cent in the long-term, or ยฃ38bn. The opportunities for the UK economy are vast if we solve this problem.
In this context, Youth Futures set out to understand what the current range of vulnerabilities are and what the implications for policies that seek to close the NEETs gap are. Given disadvantaged young people are most at risk of being left behind, it is essential to understand how their experiences of marginalisation overlap and can lead to worse outcomes. The National Centre for Social Research (NatCen) was commissioned by Youth Futures to explore this research. By utilising Next Steps, a national longitudinal cohort study following a sample of people born in 1989-90 through to the age of 25, the research was able to explore the extent and degree of overlap between different forms of marginalisation among young people in England. Furthermore, it also led to understanding how experiencing multiple types of marginalisation may increase the risk of young people being NEET.
There were 19 individual risk factors explored, including having a limiting disability or health condition, having lived in social housing while growing up, having engaged in anti-social behaviour, having been in care, and having absences from school. The findings were alarming. The vast majority of young people have experienced at least one form of marginalisation as 52 per cent of young people have experienced between two and five of the risk factors (Figure 1). As the risk factors are relatively common, the presence of each individual risk factor may not imply that a young person is โmarginalisedโ. However, their compounding impact on a young person can be considerable.
Figure 1: Proportion of young people who experienced each risk factor
Source: Next Steps Sweep 8 (age 25). Unweighted base size: 7,228-7,707
As the number of risk factors a young person experiences rises, their likelihood of being NEET also increases substantially. The percentage of young people who had been NEET from age 18 to 25 depends heavily on how many risk factors they reported (Figure 2). While only 5 per cent of young people with zero or one risk factor were NEET, this percentage increased to 18 per cent among young people with two to five risk factors and for those with ten or more risk factors, it reached 74 per cent. This is particularly alarming as 52 per cent of young people have experienced between two to five risk factors by the age of 25. This is a significant challenge for reducing the NEET gap.
Figure 2: Prevalence of NEET status, by number of risk factors
Source: Next Steps Sweep 8 (age 25). Unweighted base size: 7,228-7,707
Furthermore, it was important to identify if some groups in the population were more at risk of being NEET than others. Thus, a risk index was created, which summarised a personโs risk of being NEET based on their unique combination of risk factors and profiling the risk index by a range of different groups in the population. The groups included a number of protected characteristics.
The risk index ranges from 0-100, indicating the relative risk of having been NEET at least once from age 18 to 25, with 100 showing the highest level of risk. Nearly half (47 per cent) of young people were assigned a risk score lower than 20, and another 36 per cent a risk score of up to 50. Only 12 per cent of young people were assigned a risk score greater than 50. However, some groups of people had a higher NEET risk index score than others. Young people of Black ethnicity had the highest score, at 27, while young people of Pakistani and Bangladeshi origin also had a high score, at 23. The NEET risk index score for young people who grew up in low-income households was 32, compared to 22 for young people from more affluent households.
Regional Risk
In Figure 3, the regional trends in the NEET risk index are shown. The two areas of highest risk are areas of relatively high deprivation in England, while the mean index score is lowest for London, reflecting the relatively high levels of economic opportunity there. However, given the analysis is based on large geographical areas, there will be considerable variation within them. These areas will include pockets of deep poverty and economic disadvantage, which should be fully explored.
Figure 3: Regional variation in the NEET risk index score
Source: Next Steps Sweep 8 (age 25). Unweighted base size: 7,228-7,707
If we seek to close the NEETs gap, the UK Government and employers must target support at these young people as early as possible. Some of the experiences that can contribute to a higher risk of being NEET are outside the control of young people (living in poverty, for example). This will require a holistic approach to supporting young people who are most at risk for being NEET. The important factor in this research is that these young people can be identified through statutory data and then targeted for additional support. These young people can be targeted as they transition through the education system, before they enter employment.
Once a young person has entered the workforce, employers can support their young people from marginalised groups by providing career guidance and mentorship, promoting well-being in young people and continuing to develop their skills. Furthermore, it is essential for there to be better interdepartmental and regional cooperation if we are to tackle the NEETs gap. While the regional analysis showed hot-spot regions, we know there are pockets of young people in the lower-risk areas that need additional support. It is absolutely essential that we use this research to improve the youth employment system for young people, especially those from a marginalised background.