Abstract
We implement a dynamic bivariate probit model to explore the possible relation between at-risk-of-poverty and NEET (Not in Employment, Education or Training) in 21 European countries using 2016–2019 European Union Statistics on Income and Living Conditions panel data. We identify genuine state dependence and account for possible feedback effects from past poverty to the NEET status. We also consider two alternative definitions of NEET, i.e. unemployed and inactive NEET and inactive NEET only. We find that both poverty and NEET are characterized by significant genuine state dependence. We also observe a vicious circle between the phenomena, especially when adopting the definition that includes unemployed and inactive NEETs. This suggests a leading role of unemployment in the detrimental effect of being NEET on poverty. We offer supplementary analyses and further insights on country heterogeneity by looking at the role of social protection expenditure. Finally, we stress that for young NEETS living outside of the family of origin, the NEET condition is not detrimental for poverty, conditional on the provision of adequate youth support.
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The data that support the findings of this study are available from EUROSTAT, but restrictions apply to the availability of these data, which were used under license for the current study and so are not publicly available. Data are, however, available from the authors upon reasonable request and with permission from EUROSTAT.
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Chiara Mussida wrote the Introduction; Literature; Data and sample.
Dario Sciulli wrote the Econometric approach and the Results.
The authors jointly wrote the Conclusions. All authors reviewed the manuscript.
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Mussida, C., Sciulli, D. Being poor and being NEET in Europe: Are these two sides of the same coin?. J Econ Inequal 21, 463–482 (2023). https://doi.org/10.1007/s10888-022-09561-7
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DOI: https://doi.org/10.1007/s10888-022-09561-7