Investing in the World’s Idle Youth


Disconnected or idle youth as measured by NEET rates (defined as 18-24 year olds neither in employment nor education or training) can be a major determinant of economic stagnation, social unrest and investment risk.  Unsurprisingly, the worst performers (based on OECD data) are often those with low educational attainment and a high degree of gender inequality, in both educational and labor force access. Some unlucky countries are failing both male and female youth.

Consider that the OECD average NEET rate is roughly 14% and 17% for men and women, respectively, and that several countries are deviate significantly.

For example (in the chart below):

  • Turkey, Mexico, Columbia and Costa Rica have by far the most idle young women.
  • Nearly half (47%) of young women in Turkey are idle, compared to 20% for men.
  • Parts of Southern Europe lag the OECD averages:  Italy has low gender disparity but both young men and women are idle (27-29%), so at least the market doesn’t discriminate.  Greece and Spain also fail both young men and women, averaging NEET rates of between 22-24% and far above OECD averages.

Why should we care?  The impact of these clusters of disconnected youth may translate into lower lifetime earnings for those effected, more stagnant economic growth, and social unrest.  And these figures are only within OECD countries.  NEET figures for selected EMs, such as Pakistan and parts of Africa, can be far worse.  There is much work to do.