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NEET generation - cause of Italian crisis

24 Oct 2018 17:37|Marcin Lipka

"Although the actions of the current Italian administration are worsening Italy's economic problems, the country has been in serious trouble for many years now. This is perfectly illustrated by the statistical NEET index, i.e. the percentage of young people who are not working, studying or improving their qualifications," writes Marcin Lipka, Conotoxia Senior Analyst.

What is Italy doing to improve its weak economic situation? In short, it can be said that nothing. More than a quarter of 15-34 year-olds are NEETs (not in employment, education or training). Therefore, as many as 3 million people, who should be the current and future driving force of the country, do not participate in formal education (e.g. studying), do not work professionally and are not even trying to improve their qualifications. This is a significant challenge for the country and it might be the direct cause of populist governments and another crisis in Italy.

Economic trap in the south

Italy is not the most impoverished country in the European Union and does not have the highest unemployment rate. However, the percentage of NEETs in Italy is the highest in the whole community and according to Eurostat data for 2017, it amounts to 25.5%. For comparison, the EU average is 14.5%, and in Poland 14.3%. Results around 10% and below are reached in Germany, the Netherlands, Austria and Sweden.

The average for Italy does not show the scale of the problem, which is mainly visible in the south of the country. According to the Italian Statistical Office (Istat), the percentage of NEETs in almost the whole of southern Italy exceeds 30%, and in Sicily, Calabria or Campania it reaches 40%, even 45% for women.

For a country, such a significant percentage of young people who are not professionally active or do not take part in education, it is a serious burden and also a huge problem for the years to come. These people are dependent on state financial aid, do not adjust to the changing economic situation, do not earn money, do not pay taxes, and do not obtain the necessary professional skills, which worsens the country's economic potential.

Invitation to a more serious crisis

The NEET generation is not a new phenomenon. Italians have been facing this problem for years. However, the increasing percentage of professionally inactive people evokes severe consequences for the economic situation. One of them is the choice of a populist coalition. To meet the southern expectations, the Italian authorities' have introduced a guaranteed income that will only increase the record number of NEETs.

Therefore, this represents a vicious circle. A high number of NEETs who are also of middle age are counting on state aid. Moreover, the country is burdened with substantial pension obligations of the older generation, which the younger generation is unable to cover. Additionally, the ideology of the current government does not help because its rhetoric suggests that the biggest problem in Italy comes down to the European Commission and its remarks on budgetary policy and that the state can afford to pay for everything. The accumulation of negative elements describes a very real threat of a serious crisis in the third economy of the eurozone.

24 Oct 2018 17:37|Marcin Lipka

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