"Annual Loss of 61.7 Trillion Won from Youth 'NEETs'... Doubled in the Last 10 Years"

Hankyung Research Institute, 'Economic Cost of NEET Youth' Study Report
Economic Cost in 2019 Soars Compared to 33 Trillion Won in 2010... 3.2% of GDP
"Expand Youth Support Focused on Job Creation and Vocational Training Services"

Data provided by Korea Economic Research Institute

[Asia Economy Reporter Kim Heung-soon] An analysis revealed that the annual economic loss caused by the youth NEET (Not in Education, Employment, or Training) population in South Korea reached 61.7 trillion won in 2019, nearly doubling over the past decade, accounting for about 3.2% of the country's Gross Domestic Product (GDP). NEET is an English acronym referring to young people who neither have jobs nor receive training or education, highlighting the need for policy support to encourage youth entry into the labor market.

The Korea Economic Research Institute (KERI), under the Federation of Korean Industries, announced this in its research report titled "The Economic Cost of Youth NEET," published on the 6th. According to KERI, using data from the 1st to 22nd Korean Labor Panel surveys from 2010 to 2019, the proportion of NEET youth aged 15 to 29 was recorded at 22.3% in 2019.

The report states that the NEET proportion rose from 19.8% in 2015 to 21.2% in 2017, then slightly decreased to 19.9% in 2018 before rising again the following year. In contrast, the average for the Organisation for Economic Co-operation and Development (OECD) countries steadily declined from 15.7% in 2014 to 12.9% in 2019. Recently, the NEET proportion and its increase were found to be greater among males than females. The male NEET proportion increased from 17.1% in 2010 to 25.9% in 2019.

The report explained that to quantify the losses caused by NEET, the propensity score matching (PSM) method was used to estimate the annual economic cost of NEET. Based on market income including employers' social security contributions, the annual economic cost of NEET was 33.0 trillion won in 2010, rising to 61.7 trillion won in 2019. The share of NEET's economic cost relative to GDP also fluctuated but increased from 2.5% in 2010 to 3.2% in 2019.

Yoo Jin-sung, a research fellow at KERI, stated, "The proportion of NEET tends to be relatively high among youth from lower-income groups, those without job training experience, and those without employment experience." He added, "While institutional improvements for job creation are important, policies targeting youth should strengthen support services such as employment experience, vocational training, and internships, especially focusing on lower-income groups, rather than cash-based support."

The report also suggested considering the establishment of dedicated employment support and psychological counseling spaces for adolescents to address NEET issues stemming from social and familial isolation, fear of society, and loss of motivation to work.

This content was produced with the assistance of AI translation services.