The rise of a jobless youth contingent in Australia is a growing concern. But we cannot get a clear picture of the problem without examining the different measurements of it.
The most traditional measurement is the youth unemployment rate, which is defined as the ratio of unemployed (i.e. not at work but actively job seeking) youth relative to the respective 15-to24-year-old labour force group.
However, the youth unemployment rate ignores a considerable portion: those who would like to – or could – be working, but since they are not seeking work are considered unemployed. That is, young people at working age who are outside the labour market.
While some choose to invest in human capital full-time by studying or training; others are completely missing out on the opportunity to either work and/or study. The latter constitutes a worrying subset of young people not captured by youth unemployment statistics.
Hence, a careful analysis of the issue should also include measurements of young people not in education, employment or training (NEETs). In particular, it is important to separate the active NEETs (unemployed youth not studying/training) and inactive NEETs (completely outside the labour market and education/training).
Additionally, the youth unemployment rate might overstate the unemployment problem, since the young labour force – which is the denominator of the youth unemployment rate – is severely constrained by the large proportion of those enrolled at education/training and simply not interested in working.
In this respect, it is important to add other statistics to the analysis menu. The first is the youth unemployment-to-population ratio, or most commonly addressed as youth unemployment ratio, which considers the number of jobless youth as a percentage of the respective young population.
Measurements regarding NEETs (including the distinction between active and inactive NEETs) can help to devise targeted policies, since the youth unemployment rate (or ratio) does not reveal potential problems with those who are not in education, employment or training – especially why and how many are outside the labour market.
The important message is that there is no single statistics able to fully inform about the youth unemployment subject. The issue comes in many shades, shapes and sizes, with no black-and-white, one-size-fits-all picture.
Home > Commentary > Opinion > 50 shades of youth unemployment
50 shades of youth unemployment
The most traditional measurement is the youth unemployment rate, which is defined as the ratio of unemployed (i.e. not at work but actively job seeking) youth relative to the respective 15-to24-year-old labour force group.
However, the youth unemployment rate ignores a considerable portion: those who would like to – or could – be working, but since they are not seeking work are considered unemployed. That is, young people at working age who are outside the labour market.
While some choose to invest in human capital full-time by studying or training; others are completely missing out on the opportunity to either work and/or study. The latter constitutes a worrying subset of young people not captured by youth unemployment statistics.
Hence, a careful analysis of the issue should also include measurements of young people not in education, employment or training (NEETs). In particular, it is important to separate the active NEETs (unemployed youth not studying/training) and inactive NEETs (completely outside the labour market and education/training).
Additionally, the youth unemployment rate might overstate the unemployment problem, since the young labour force – which is the denominator of the youth unemployment rate – is severely constrained by the large proportion of those enrolled at education/training and simply not interested in working.
In this respect, it is important to add other statistics to the analysis menu. The first is the youth unemployment-to-population ratio, or most commonly addressed as youth unemployment ratio, which considers the number of jobless youth as a percentage of the respective young population.
Measurements regarding NEETs (including the distinction between active and inactive NEETs) can help to devise targeted policies, since the youth unemployment rate (or ratio) does not reveal potential problems with those who are not in education, employment or training – especially why and how many are outside the labour market.
The important message is that there is no single statistics able to fully inform about the youth unemployment subject. The issue comes in many shades, shapes and sizes, with no black-and-white, one-size-fits-all picture.
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