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The Case 18 September Sep 2020 1214 18 September 2020

The NEET emergency: too many young Italians are still not in education or employment

A StarNet report provides a snapshot of the situation: more than 2 million Italian youngsters are not in employment, education or training and over the past six years, the policies to help them have only gone halfway to solving the problem

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Since the 2008 recession, we have become all too familiar with the acronym NEET. But since then, despite recognizing that the problem exists and making attempts to find a solution, in Italy things have not improved much – quite the opposite.

The latest figures on NEETs in Italy – in other words the young people who, by choice or due to the lack of opportunities, are neither in education, employment or training – are provided in a report by StarNet (a network supporting the transition from school to work) NEETs in Italy. Data, experiences and recommendations for effective activation policies edited by Alessandro Rosina, Professor of Demography and Social Statistics at the Catholic University in Milan.

One figure is enough to understand the impact of the NEETs issue: the social cost as estimated by Eurofound (2012) is 1.2% of Europe’s GDP and in Italy this figure is 2%. This means that leaving millions of young people between the ages of 15 and 29 in limbo, without education or a job, eats up money, resources and competitiveness. It is no coincidence that this figure, as the StarNet report points out, is “considered to be the main gauge of how much a community squanders the potential of future generations.”

There are over 2 million NEETs in Italy and when compared with the EU average, these numbers are cause for concern: before the 2008 recession, they already made up 18.8% of the total youth population compared to 13.2% in the EU. The numbers continued to increase, in 2014 reaching a peak of 26.2% versus 15.4% in the EU and a significant 23.4% in 2018 (versus an EU average of 12.9%). In other words: one young person in four is neither studying nor working.

And as Professor Rosina explains, this figure is likely to rise in the wake of the coronavirus emergency, the impact of which we cannot yet fully measure for obvious reasons. “Italy has a record number of NEETs also in the 30-34 age group. After having suffered the impact of the previous recession, these thirty-somethings now have to deal with the serious effects of the pandemic. Their careers but also their life plans are now in jeopardy.”

The first studies seem to prove this point: “Data from an international survey by the Istituto Toniolo at the height of the lockdown (between late March and early April) show that the under-35s in Italy are the most worried in Europe about the consequences of the pandemic on their jobs and on their country in general. Of those NEETS interviewed, more than 40% stated that they had postponed looking for a new job until after the lockdown with over a third having given up altogether.”

In Italy, one young person in four is neither studying nor working

However, we should look more closely at the term NEETs. The definition includes recent, high-potential graduates who are motivated to spend their time looking for jobs in line with their ambitions and qualifications, but also those youngsters who have left education early and as a result have less to offer the labour market. The report also reveals that “mothers not in employment make up a significant proportion of NEETs”. This is without doubt a problem that can no longer be ignored in a country with an aging population and a low birth rate. If mothers are forced to give up work to take care of their children this is because they are not getting the right support (nurseries, allowances and so on), or they do not benefit from labour protection (for instance, very few have the luxury of a contract that provides maternity leave).

“This aspect,” Professor Rosina explains, “brings together concerns for the disadvantages faced by young people, the low degree of appreciation for female human capital and the falling birth rate. Active labour policies and measures to accommodate work and family duties are part of a welfare system and should be seen as an investment in society, enabling and promoting the energy and intelligence of all its members, and restoring the balance between the different generations, genders and regions of our country. The Family Act is an integrated package that goes in the right direction and it is a positive sign that it was unanimously passed by Parliament.”

To understand the variegated group called NEETs, the report defines four categories: 1) those seeking employment, making up just over 40% of the total; 2) those who are unavailable for active life for a variety of reasons, who account for 20%; 3) people not actively seeking employment but awaiting an opportunity, in other words people who are waiting for the conditions to be right before starting an activity, roughly another 20%; and finally 4) the disengaged, around 15% who are not looking for a job and are pessimistic about their chances of finding work.

NEETS include a large number of young mothers who cannot work

Why is the situation in Italy worse than the European average? The StarNet report does provide some plausible explanations. Firstly, it is a fact that “when many young people leave education, they find themselves lacking the right skills and experience that companies require.”

“Despite having a high level of education and potential, many others do not find roles that match their skills and aspirations” and find themselves accepting second best so that they can exit the NEET category. There is another element: “the ineffectiveness of the guidance and support offered to young people in their job search, particularly in matching supply with demand”. The report looks closely at this and at the measures put in place in recent years. There is a further consideration to help understand the phenomenon. It makes reference to an Italian ‘cultural model’ which makes “it acceptable for young people to depend on their parents for a long time”. In other words, they are more likely to live at home with their parents and they accept being without a job or being in education for a few months (or years) because the average age at which they leave home is much higher than in many other European countries.

All this has serious economic and social consequences, as the report clearly states: “Collectively, a significant portion of the youth-adult population makes it possible for a country to grow and reduce the ratio between public debt and GDP, but also to maintain a sustainable welfare system in an aging population. For each individual, a good education and a suitably timed entry into the workplace will allow them to make better provisions for their future social security, health and personal wellbeing.”

One of the most serious problems is the mismatch between supply and demand in the youth labour market

The most significant attempt to slow down the increase in NEETs is the Piano Garanzia Giovani (Youth Guarantee Plan). The plan takes its cue from the EU Council Recommendation no. 120/01 (22 April 2013) and was introduced in Italy in 2014 with the start of a first four-year cycle and an initial investment of 1.5 billion euro.

The Garanzia Giovani pathway requires young people to register for the programme via an online platform, after which the relevant regional administrations and public employment services take on their cases. Each youngster is profiled to identify the pathway that best matches their education and qualifications. A ‘service agreement’ is then drawn up, in other words a plan to help get the individual out of the NEET category, for example by “building up their skills and know-how to get them into work” or encouraging them to take internships or do community service. Garanzia Giovani also provides help to become self-employed with training schemes, guidance to develop business ideas, or incentives to start up a business. The scheme also offers incentives to companies who offer NEETs contracts lasting at least six months.

Can it be said that the scheme has worked? According to the report, the results are positive to some degree but are not yet good enough. The numbers speak for themselves: “When Garanzia Giovani was introduced, there were around 2.4 million NEETs in Italy. Four years later – the duration of phase one - there were still more than 2 million (the highest figure in Europe). In other words, it can be said that the plan did slowdown the growth in the trend and the numbers fell slightly. However, this decrease is partly due to the fact that the peak of the recession had passed and there was a general pick-up in employment.”

Garanzia Giovani was launched in 2014 with an initial investment of 1.5 billion euro.

By September 30, 2018 - a good 4 years after its launch - more than one million young people had joined the scheme (77.8% received support from public employment services and 21.2% from employment agencies): 288,000 had found employment. This is less than 30% of those in the scheme. The number of young people who found employment six months after exiting the scheme rises to 52.5%.

The StarNet report found that the ineffectiveness of measures to boost employment had impacted the success of the scheme: “Garanzia Giovani felt the effects of the basic weakness in active labour policies that in turn rest on pillars like public employment services, which are not up to standard in Italy and vary from region to region”.

With additional resources of 1.2 billion euro, the scheme has now entered a second phase which will last at least until the end of 2020. It has not been a total failure and with the right degree of caution, what has been done so far could be seen as a good starting point. According to StarNet a number of recommendations should be followed. Firstly, the goal of politics should be to stop the flow of young people into the NEET category: “It is important for schools, public employment services and other national institutions to work together.” Any action must take into account a reality which often defies statistics: “In some areas it is key to offer employment opportunities that are more attractive than illegal jobs”. It is also important to involve those youngsters who are no longer NEETS, letting others learn from and be inspired by their example and gathering their feedback. Last but not least, public employment centres need to improve and gear their services to the needs of job seekers and to the possibilities offered by the area in which they live.

On the topic of public employment centres, another of the government’s key measure to combat also youth unemployment is worth mentioning. Professor Rosina cites the so-called ‘citizen’s income’ (or basic income), which he considers to be only partially successful as far as NEETs are concerned: “The citizen’s income doesn’t help much, it could even be counter-productive when it is seen only as a passive measure to help those without a job. It will reduce the number of NEETs only when it gives young people the incentive to become independent of their families and supports them in their search for work. This function, which combines income support and active labour policies, is still missing in the Italian system.”

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