The determinants of Italian NEETs and the effects of the economic crisis.

Abstract

In recent years, the share of young people not in education, employment, or training (NEETs) has shown a remarkable increase in many European countries, such as Italy. The wide diffusion of NEETs represents an alarming social issue, as being NEET predisposes young people to long-term unemployment and social exclusion. It also has a significant negative impact on the economic growth and welfare equilibrium of countries. The aim of this paper is to analyze the determinants of the NEET condition in Italy through a step by step procedure beginning with the identification of their main characteristics and then proceeding with a focus on specific homogeneous clusters of NEETs. The decomposition of the gaps in the probabilities of being NEET between the various clusters allows verifying how personal characteristics effectively act. Furthermore, the influence of unobserved factors in the professional condition of young people has been analysed in more detail through a bivariate selection probit model on the propensity to look for a job against the condition of being inactive. The results confirm the crucial role of the education system, as well as the importance of the economic and social disparities between gender and the Italian territorial districts.