The role of the Reinforced Youth Guarantee in decreasing the NEET rate across Europe

Written by Leonardo Menichini, EST Working Group on Youth Employment

Introduction

This article will investigate the Reinforced Youth Guarantee in order to better understand whether the program is efficiently upholding the European Commission’s objective (2020) to decrease the percentage of young people Not in Education, Employment or Training (NEET). The article will, first and foremost, provide an overview of what the label NEET implies and of its current statistics across Europe. Afterwards, it will explore the principal features of the EU Reinforced Youth Guarantee. To conclude, the article will determine some of the challenges and some policy recommendations that the European Union must take into account to ensure the functioning of the mechanism.

NEET youth among EU Member States

The term NEET was coined in 1996 in the United Kingdom in order to substitute the already existing Status Zer0 and Status A, that the British public opinion evaluated as a negative identification of a determined group of persons (Mascherini, 2018, p.3). Afterwards, that term was progressively employed across Europe in order to classify the category of young persons, between 15 and 24-29 years, not in employment, education or training system (Eurofund, 2012, p.20).  

Nonetheless, the label NEET does not have a common international interpretation. The ILO and Eurostat have attempted to embrace a joint definition when measuring the NEET rate. It could be conceptualised as “the percentage of the population of a given age group and sex who is not employed and not involved in further education or training.” (Elder, 2015, p.1).  Moreover, to be included into that measurement, NEETs must satisfy two conditions: firstly, they must not be employed, and secondly, “they have not received any education or training in the four weeks preceding the survey.” (Elder, 2015, p.1)

NEETs are currently 13.5% of the 15-29 year-old population in the European Union, as illustrated below in Figure 1 (Eurostat, 2021 a). The NEET rate suffered a 1% increase when the pandemic and consequent economic crisis affected the continent. This increase was in fact preceded by a steady decline between 2016-2019, reaching a low of 12.5% before rising again in 2020. Nevertheless, that percentage varies significantly among EU countries. In this regard, Figure 2 (Eurostat, 2021 b) provides a more accurate insight into the proportion of NEETs in the EU in the first two quarters of 2021. Here, the NEET rate is highest in Italy (23.7%), Romania (20.1%) and Greece (19.8%) whereas the lowest rates were below 8.0% in the Netherlands (5.9%), Sweden (6.2%) and Slovenia (7.2%). On the whole, 9 EU Member States are above the EU-27 average. Taking everything into account,  more than 73 million young people  from 15 to 29 years can be presently labelled as NEET in the European Union.

    Figure 1                                                                       Figure 2

Source: Eurostat (LFSI_NEET_A) (LFSI_NEET_Q) 

The Reinforced Youth Guarantee

The Reinforced Youth Guarantee was launched by the European Commission (2020) in July 2020, aiming at dealing with the Covid-19 pandemic’s effects on European youth. Indeed, the substantial impact of the pandemic has prompted the EU to renovate and strengthen the already existing Youth Guarantee established in 2013. For instance, the renewed supportive mechanism has broadened the target group, currently including young people from 15 to 29 year-olds whereas the 2013 Youth Guarantee involved people from 15 to 24. On one hand, the overall objective of the mechanism is “to help [alleviate] the impact of the COVID-19 crisis and [prevent]  another youth unemployment crisis.” (European Commission, 2020). On the other hand, the predominant operative ambition is to set up solid national schemes in which young people can have direct and straightforward access to work, educational or training offers.

The reinforced program foresees four phases (mapping, outreach, preparation, and offer) to substantially tackle the soaring number of NEETS and therefore has the resources for a young NEET to receive an offer of employment, training, or continued education (European Commission, 2020).

Moreover, the Reinforced Youth Guarantee will be primarily financed by the new European Social Fund Plus (ESF+) and by national investments (European Commission, 2020). Indeed, the ESF+ has an overall 99 billion euros budget deriving from the 2021-2027 Multiannual Financial Framework (MFF) and that funding is allocated to the Member States for implementing national projects in the context of social issues. Member States must allocate at least 12.5% of their ESF+ funds to targeted youth employment measures if they have experienced an average NEET rate above the EU average throughout the period 2017-2019. (European Commission, 2020) 

The main challenges

In the Commission’s understanding (2020), the purpose of this reinforced plan is to perform to a greater degree than its predecessor when dealing with the youth employment crisis. In that regard, the Commission’s will to broaden and to better tailor the target audience is a valuable advancement in order to achieve that.  Nevertheless, a considerable factor in the success of the initiative depends on how much money Member States receive when implementing targeted national projects to decrease their respective NEET rates. Indeed, as pointed out by scholars, one of the 2013 Youth Guarantee’s main shortcomings was the inadequacy of funding for Member States with an already elevated public debt (Cabasés Piqué, et al. 2015, p.17).  

Besides, it is not possible to assess whether the Youth Guarantee has a consistent impact in decreasing NEET rate in the upcoming years for one main reason. As pointed out by László Andor (2016, p.6) the Youth Guarantee is a more effective long-term mechanism rather than a short-term one for reducing youth unemployment. Hence, it will not weigh on next years’ rate, as seen in that the preceding program in 2013 did not affect the NEET rate after its implementation. In this circumstance, both the youth unemployment rate and the adult unemployment rate decreased, essentially due to more favourable economic conditions. (Eichhorst and Rinne, 2017, p.3). In brief, the Reinforced Youth Guarantee will not have a relevant impact on the NEET rate fluctuation of the upcoming years whereas it may be a solid mechanism to soften a future youth unemployment crisis.

Policy Recommendations

All things considered, the European Commission and the EU Member States must consider that improvements in youth employment are certainly required. Indeed, a more holistic approach, both for the short and long-term, could embrace the following proposals: 

• More structured coordination between the European Commission and the EU Member States when implementing targeted projects for NEET young people. Indeed, the implementation of common European guidelines could enhance the effectiveness of national projects in decreasing youth unemployment and could also converge youth employment among European countries towards similar rates. 
• An additional EU emergency funding related to the MFF and a mandatory higher amount of national investments for those countries which have a NEET rate highly above the EU average in order to help them start reversing the trend. Indeed, the Member States such as Italy, Greece, Romania, and Bulgaria could benefit from having more funds to commit to tackle this issue and to improve youth employment’s conditions. 

Conclusion

This paper has outlined the NEET youth situation among EU Member States throughout the Covid-19 pandemic and to what extent the European Union has attempted to tackle its effects. The reinforced Youth Guarantee is a compelling mechanism to better enhance the living and working conditions of millions of NEETs across Europe. Nonetheless, the Guarantee was designed to have a more effective outcome in the long-term rather than in the immediate future. To conclude, whilst the Commission’s objective to prevent another youth crisis can be achieved, it is challenging to pursue the ambition to help alleviate the impact of the current crisis by means of the Youth Guarantee. 

References:

• Andor, L. (2016). Youth Guarantee Four Years After- EU youth employment initiatives and their evaluation. European Economic and Social Committee. (PDF) Youth Guarantee Four Years After | László Andor and László ANDOR – Academia.edu 
• Cabasés Piqué, M., Pardell Veà, A., Strecker, T. (2015) The EU youth guarantee – a critical analysis of its implementation in Spain. Journal of Youth Studies, 19(5), 684-704. https://doi.org/10.1080/13676261.2015.1098777
• Eichhorst, W., Rinne, U. (2017). The European Youth Guarantee: A Preliminary Assessment and Broader Conceptual Implications. IZA Policy Paper, (128). 
• Elder, S. (2015). What Does NEETs Mean and Why Is the Concept So Easily Misinterpreted?. Work 4 Youth Technical Brief. wcms_343153.pdf (ilo.org) 
• Eurofund. (2012).  NEETs – Young people not in employment, education or training: Characteristics, costs and policy responses in Europe. Publications Office of the European Union.  NEETs – Young people not in employment, education or training: (europa.eu) 
• European Commission. (2020). Proposal for a COUNCIL RECOMMENDATION on A Bridge to Jobs – Reinforcing the Youth Guarantee and replacing Council Recommendation of 22 April 2013 on establishing a Youth Guarantee. COM(2020) 277 final EUR-Lex – 52020DC0277 – EN – EUR-Lex (europa.eu)
• Eurostat. (2021 a). Young people neither in employment nor in education and training (NEET), by sex and age – annual data. LFSI_NEET_A
• Eurostat. (2021 b). Young people neither in employment nor in education and training (NEET), by sex and age – quarterly data. LFSI_NEET_Q 
• Mascherini, M. (2018). Origins and future of the concept of NEETs in the European policy agenda. In J. O’Reilly, J.Leschke, R. Ortlieb, M. Seeleib-Kaiser, & P. Villa (Eds.). Youth Labor in Transition: Inequalities, Mobility, and Policies in Europe (pp. 503-529). Oxford University Press. DOI:10.1093/oso/9780190864798.003.0017