Low levels of education and childcare costs are keeping young people out of work and study

One in five young people, aged between 16 and 24, spend at least a year not studying or working. The lost earnings from this in Australia add up to over $16 billion each year.

The Organisation for Economic Co-operation and Development (OECD) report Investing in Youth: Australia, published in September last year, is part of a series looking at school to work transitions in OECD countries around the world.

The focus of the series is on disengaged young people, particularly those not studying or working.

The series centres around NEETs – young people ‘not in employment, education or training’. The Australian report shows that 580, 000 young people, or 11.8 per cent of all 15 to 29 year-olds, were NEETs in 2015. This is over 100, 000 more than there were in 2008. Nearly two-thirds of these were not looking, or not able to look, for work.

Young people with lower levels of education are most likely to become NEETs. Those with a Year 10 Certificate or less are three times more likely to be NEETs (at 37 per cent) than those with a tertiary qualification (only 11 per cent). This difference in numbers due to education is pretty standard across OECD countries.

Lower education in turn sees poor literacy and numeracy skills in a high percentage of NEETs. These young people with low literacy and numeracy skills face even bigger hurdles to getting back into study or work. Many won’t be able to go straight into training or work but will need to have some foundation level training first.

A lack of foundation skills is often the result of social or health problems such as mental health issues and substance abuse – issues that caused them to do badly in school or drop out in the first place.

The report also shows that women have higher NEET rates than men. As an average across the OECD, NEET rates are 36 per cent higher for women than men but in Australia the gap is 51 per cent.

The main factor in this seems to be mothers with young children and is the result of expensive or the limited availability of childcare.

Suggested solutions raised by the report, to support these young people and help get them back into the community and feeling valued, include improvements to the vocational education and training (VET) sector. The report flags the importance of improving quality control in VET courses and increasing career guidance to help young people’s job prospects and opportunities.

The report also recommends investing in affordable childcare to improve the gap between men and women in the number of young people not working or studying.

You can read the full report on Australia and other OECD countries on the OECD website