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Right now, somewhere in a wealthy country, there's a young person who woke up this morning with no work, no school, and no plan to look for either. And tomorrow will be the same, and the day after that. Except it's not just one person. Today, 262 million young people are living exactly like this. That's one in four worldwide. And they even have a name. They're called NEETs. Not in employment, education, or training. Now, the instinct most people have when they hear that is pretty predictable. Lazy generation, too soft, should just get off their phones and get a job. If you've ever had to sit through a family dinner with anyone over 55, you've probably heard some version of this already. But the data tells a more
complicated story, because youth unemployment has actually been going down across most wealthy nations at the same time. So, by the official measure, young people are doing fine. It's just that the official measure of youth unemployment only counts people who are actively looking for jobs, so it misses the rest of them. For every young person counted in official unemployment statistics, there are roughly three more who aren't counted at all. The easy assumption is that those invisible people are the lazy ones your uncle was talking about at dinner. But if your uncle were right, the picture would look very different. You wouldn't expect it to skew so heavily toward people with health conditions and
disabilities, or to be concentrated in places where jobs are hardest to find, and you wouldn't expect it to be getting worse in countries that, by every other economic measure, are supposedly doing well. Something structural is going on. The foundational promise of every modern economy is that each generation enters the workforce, contributes to it, and does a little better than their parents. But for the first time in a generation, a significant share of young people is struggling to become economically active at all, let alone build a better life than their parents. So, what exactly is a NEET, and why does it tell us something about the economy that unemployment figures never could?
Why is this happening now, and why is it happening everywhere at once? And finally, what does it actually cost, and do we already know how to fix it? The internet has become more fragmented than ever. One payment software here, a research tool there, and a spreadsheet duct taping it all. In just the simple process of making a video, there can be up to 15 different software programs that I use. And every time I jump over from one to the next, there is lost time. That's why I use Odoo. Odoo is an all-in-one business management platform that brings all your workflow under one single roof. But, where Odoo really excels is with
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It's free. Now, to understand why the NEET number tells us something the unemployment rate never could, you need to understand how the unemployment rate is built. The unemployment rate counts people who don't have a job and are actively looking for one, and actively is the word that matters here, because to be counted as unemployed, you have to be sending applications, attending interviews, registering with job centers, and responding to job listings. The moment you stop doing those things for whatever reason, you're no longer unemployed and become what economists call economically inactive, which is a very clinical way of saying the system has stopped worrying about you. Since
unemployment benefits in most countries are tied to actively looking for work, stopping looking cuts you off from the support. The unemployment rate is useful for counting people available and ready to work right now, but it was never designed to answer the much bigger question of how many young people are genuinely struggling to build a productive life. And that means it misses a lot of people, like the ones who stopped looking after months of rejection, and those who can't work because of a health condition that has never been formally diagnosed. There are also the ones caring for a sick parent or a young child with no one else to help, and those who live in towns where the available jobs pay less than the
cost of getting to them. None of these people are unemployed in the technical sense. They're just invisible to the economy, and the NEET measure was invented specifically to find them. By capturing everyone between 15 and 24 who isn't working, studying, or in any formal training, regardless of whether they're looking or not, we're able to get a much more complete picture of what's actually going on. In 2023, only 6% of young people globally were unemployed, but 20.4% were NEET. Now, it's worth being honest about what's inside that measure, because not every NEET is the same. And if you treat them as if they are, the policy response ends up aimed at the wrong people. For starters, the majority of those 262
million live in developing countries, where the story looks quite different. There, entire regions lack the infrastructure for formal employment, and in parts of sub-Saharan Africa and the Middle East, conflict has simply made education and work impossible. In most of those regions, young women are also kept out of work by early motherhood or cultural expectations. Those are real and serious problems, but they're a topic for a different video. What we're focused on here is the NEETs in wealthy nations. These countries have functioning economies, good education systems, and social safety nets. And yet, the problem exists there, too. Now, among wealthy nations specifically,
there are really two very different groups of NEETs living very different lives. The first group are the voluntarily disengaged. These are young people who have made a deliberate, if sometimes questionable, choice to step back from the conventional path for now, or they are simply between things and on their way back in. Some are holding out for the right opportunity rather than taking the first thing that comes along, while others are trying to build something on their own. And some, if we're being honest, are just riding it out at their parents' house waiting for something to change. Particularly among young men, there's a real tendency to hold out for the dream job title and the
perfect salary right out of the gate, because anything less isn't worth doing. But, they're a minority, and a smaller one than the headlines tend to suggest. In Europe, where we have the most detailed data, they account for only one in five NEETs. The other four in five are people who are disconnected from work or education, less by choice and more by circumstance. Some are actively looking for work but not finding it, while others have become discouraged after so many rejections that they stopped trying altogether. Others are dealing with illness or disability, and this is one of the fastest-growing parts of the NEET population. In the UK alone, the share of NEETs reporting a
work-limiting health condition rose from 26% in 2015 to 44% in 2025, nearly doubling in a single decade. Then there are young people with caretaking responsibilities, and this one skews heavily female. One in five NEET women are looking after children compared to just one in 30 for young men. When childcare costs more than the job pays, or when there's simply nobody else to help, the choice to work doesn't exist. Now, despite how different the situations of the vulnerable NEETs are, the data points to the same profile every time. They tend to come from lower-income families.
They're more likely to live in rural areas than in cities, and the less education someone has, the higher the risk. In the US, a quarter come from families earning less than $25,000 a year, and the rate among black youth is more than 50% higher than among white youth. Patterns like these point much more towards structural disadvantage than individual choice. If this were just a laziness problem, you wouldn't have nearly a million young people in the UK sitting in this category right now, the highest number in over a decade in a country that spent years making progress on exactly this problem. And while NEET rates in most wealthy countries have been improving for years, that progress has now stalled. Now, at this point you're
probably wondering, if these young people have no paycheck and no training wage, who's actually paying for dinner? The short answer is mostly their parents. For the first time on record, more than half of American parents with a child over 18 are providing financial support at an average of nearly $1,500 a month. The state picks up some of the rest, mostly through health-related benefits for those who can't work. But the full answer is more complicated. We go into it in depth in our next newsletter, which you can subscribe to through the link in the description. So, how did we get here? Why is the economy failing so many young people?
The honest answer is that this didn't happen because of one thing. Several things went wrong at once, and young people ran into all of them at the start of adult life when you have nothing to cushion the fall. For most of the 20th century, the economy had a reasonably reliable first rung on the ladder. Jobs like factory work, admin roles, data entry, retail management, or customer service didn't require much experience. Entry-level jobs also paid a living wage and taught you enough about how to show up, take direction, and build a work history that the next job became easier to get. They weren't glamorous, but for an 18-year-old with no credentials and
no connections, they were the way in. Those jobs are now disappearing. Automation took the most routine roles first, like data entry, basic processing, and repetitive customer service interactions, and now AI is doing the same to entry-level white-collar work. Between late 2022 and mid-2025, employment for new workers in the jobs most exposed to AI fell 6%, while older workers in those same fields actually saw employment grow. The gig economy absorbed much of what remained, replacing stable entry-level employment with flexible work that sounds appealing until you realize it offers no progression, no training, and no way up.
Now, the obvious response to all of this is go to university, get the degree, and that should open the door to better roles. And despite everything, it's true that a degree is still effectively required for most good jobs, whatever the job posting actually says. Companies have spent the last few years publicly dropping degree requirements, but fewer than one in 700 new hires actually benefited from those changes. So, the degree is still the price of entry. The problem is what it now costs to get one and what it actually delivers on the other side. In the UK, tuition fees tripled in 2012. In the US, the average student borrower carries nearly $40,000 in federal debt alone. Young people took
on that debt on the reasonable assumption that a degree would translate into a graduate-level job, but the labor market hasn't kept up. In 2024, over a million students graduated from UK universities in a single year, but the share of them landing in roles that actually require a degree has fallen to its lowest level since 2014. And for the first time on record, the unemployment rate for recent US graduates has started to exceed the overall unemployment rate. So, the degree costs more than it used to and delivers less than it promised. And the jobs that didn't require one have largely disappeared anyway. On top of all that, the post-pandemic hiring boom has cooled, hitting young workers first. In the UK,
employment among young people in 2025 still hadn't recovered to where it was in 2019, even as adult employment has grown steadily. Now, that alone would be a serious problem. But, it's also happening at a moment when getting to the jobs that do exist has become a challenge in itself. The best jobs in any given field tend to cluster in specific cities. Finance in London and New York, tech in San Francisco. For previous generations, moving to where the opportunity was meant stretching a modest income across a reasonable rent. In 1960, the typical renter spent less than a fifth of their income on housing.
Today, it's closer to a third, and that's the average. In the cities where the jobs actually are, it's considerably worse than that. In Sydney, the income you need just to rent a typical apartment without being financial stress has jumped from 88,000 Australian dollars in 2019 to 130,000 in 2025. The average young worker in New South Wales earns around 54,000 Australian dollars. In the US, three in five Gen Z renters are now classified as rent-burdened, spending more than 30% of their income on housing before accounting for anything else. In cities like Los Angeles and San Diego, it's closer to three in four. The result is that young people put two and two together and decide the move simply
isn't worth it. So, they stay in the town they grew up in, where the opportunities are thinner and the net risk is higher. Or, they move back in with their parents, which is now the living situation of roughly one in four young adults in the US, up from one in nine just 50 years ago. And while that arrangement can make financial sense, it often comes with a growing feeling that adulthood has been indefinitely delayed. None of this, it turns out, is particularly good for your mental health. The share of young people in the UK reporting common mental health conditions has risen from 19% in 2014 to nearly 26% today. In Australia, the prevalence of depression among young
adults more than doubled between 2007 and 2021. And in the US, for the first time on record, young people aged 18 to 24 are now more likely to report poor mental health than people twice their age. Now, the obvious question is which came first? Did the structural pressures cause the mental health crisis or was the mental health crisis already developing on its own and simply made navigating those pressures harder? Well, it's genuinely a bit of both. And that's what makes this so difficult to fix. The structural pressure argument is intuitive. A generation dealing with an unstable job market, serious debt, and housing they can't afford is a generation under chronic stress. And chronic stress is detrimental to mental
health. The pandemic made things significantly worse, but young people were already struggling long before. The number started moving in the wrong direction as far back as 2011, years before the post-pandemic jobs crunch and the current cost of living crisis. In the UK, depression among young people aged 15 to 21 had already nearly doubled between 2003 and 2019. And struggling with your mental health at 15 doesn't make showing up to school any easier, which means your qualifications suffer. Worse qualifications mean worse options in the labor market, which makes mental health worse. Each step makes the next one harder, and the further someone gets down that chain, the harder it is to pull them back. Now, for the ones who do make it through and actually
land a job, well, the conditions on the other side aren't exactly a relief. One job, it turns out, increasingly isn't enough. There are now a record 1.35 million adults in the UK working at least two jobs, and it's Gen Z driving most of that growth. And yet more than two-thirds of them still rely on parents or family for essentials like rent, groceries, or bills. For those working a single job, the hours don't stop at the hours you agreed to. Over a third of workers say their employer expects them to work beyond their contracted hours, and nearly a quarter of Gen Zs answer work emails outside normal hours at least five days a week.
The gig economy promised flexibility, which sounds good, but that flexibility mostly just means the risk sits with the worker rather than the employer. You're available when they need you, and the rest is your problem. Half of Gen Z workers report feeling burned out. And the friendships, the local communities, the places to switch off that previous generations could fall back on, those have been thinning out for years, too. So, some young people who do find work eventually decide it simply isn't worth it. And when they step back, there's less pulling them back in than there used to be. Moving back home used to come with a kind of unspoken social pressure. You were expected to get on with it, get out, become financially independent. But
that pressure has largely gone now, and honestly, given everything we've just described, that's probably fine. But it does mean that one of the informal mechanisms that kept people in the labor market, even when conditions were rough, has largely disappeared. Now, all of this has a price tag, and it's not a small one. Eurofound puts the cost of NEETs to European economies at 142 billion euros a year, distributed across foregone taxes, lost productivity, and benefits paid out to people who aren't working. Now, if you want to see what happens when a country ignores all of this long enough, Japan is probably the clearest example. Japan's economy has had a difficult few decades, to put it
mildly. The asset price bubble burst in the early 1990s, and stable jobs dried up almost overnight. Japanese employers had always hired fresh graduates in a single annual cohort, and now graduates who expected to walk into permanent employment found themselves cycling through low-paying part-time work instead. The economy narrowed, the entry points closed, and they never really reopened. One in four Japanese people in their 20s will be NEET at least once over any four-year period. More than half of them experience NEET status multiple times. And even in a society with enormous stigma around falling behind, some young people gave up on getting back into work. And then, they gave up on going outside. It got bad
enough that they had to invent a word for it, hikikomori, which refers to people, mostly young men, who don't go to work or school and barely leave their room, sometimes for years. And as surprising as that sounds, this is the reality for 1.5 million people in Japan right now. That's 2% of everyone aged 15 to 39. The average time people spend like this is around 10 years. That's not a bad patch or a rough few months. That's a decade, largely alone. Japan didn't set out to build a society where a million and a half people disappeared into their bedrooms. It just built an intensely competitive education system and economy with narrowing entry points and a welfare system that relied
heavily on families to absorb the strain. Once families reach their limit, there was little left to catch people falling out of society. And while hikikomori is a Japanese word, similar patterns have been documented in South Korea, the US, Singapore, and much of the developed world. But Japan is where the problem has been running the longest and gone the deepest. There's even a name for what happens when it's left unaddressed for a generation, the 80/50 problem. Parents in their 80s still supporting children in their 50s who never reentered society. That's two people who should be contributing to an economy, one through spending and one through working, both effectively removed from it. And when those elderly
parents die, many of their children have no income, no work history, and nowhere to go. So a million and a half people in their bedrooms and parents in their 80s still paying the bills is what it looks like when this problem is left unaddressed for an entire generation. And look, it would be easy to stop there and leave you feeling terrible about the future. But that's not quite the full picture because some countries have actually figured parts of this out. Across Europe, NEET rates vary enormously, from above 22% in Italy and 19% in Greece to slightly above 5% in the Netherlands. And before anyone says it's a cultural or attitude thing, it isn't. When you look at what the low
NEET countries are actually doing, the same answers keep appearing. It all starts with treating non-university routes as a genuine first choice, not a backup plan for people who didn't make it to university, which is how most wealthy countries currently treat them. The countries that do this well run what's called a dual education system where vocational students split their time between the classroom and real workplaces, so they graduate with work experience, employer relationships, and a foot already in the door. In the Netherlands, 90% of recent vocational graduates were in employment in 2024, well above the EU average, which means more young people with a clear path forward, which means fewer NEETs,
which means significantly less strain on public finances. The other thing the low NEET countries get right is catching young people before they disengage entirely, because pulling someone back after years out is dramatically harder and more expensive than not losing them in the first place. To do that, they make child care affordable enough that work actually pays. Sweden does this better than almost anyone. As a result, nearly 80% of women are in the workforce and its NEET rate of 6.7% is well below the EU average. Sweden also has housing policies that make it possible for young people to actually live near where the jobs are. And then there is what Denmark calls flexicurity, flexible hiring
combined with strong safety nets and active retraining programs, so you can lose a job without it becoming a life sentence. The system actively helps you into the next job, rather than just paying you to stay home. Denmark's NEET rate is 6.2%, well below the EU strategic target to keep the NEET rate at 9% or below by 2030. That's not an accident. Now, none of this is complicated in theory, and the numbers make a pretty compelling case for trying. In the UK alone, getting every region's NEET rate down to match the best performing one would add 26 billion pounds to the economy every year, and that's just what you gain. It doesn't include the money you keep losing in welfare payments, health costs, and
decades of foregone tax revenue from people who stayed out long enough that re-entry stopped being realistic. That bill is considerably harder to calculate and considerably larger. So, why has no one fixed it? Partly because the lazy generation story is a lot easier to tell than the structural one, and it's certainly a lot more politically convenient. If you believe that framing the policy response is motivational, lecture the unemployed, sanction their benefits, tell them to lower their expectations. But if you accept what the data actually shows, the response looks completely different. Structural problems, unlike lazy generations, can actually be fixed. The evidence is there and the examples are there. The hard
part, as with most things, is building the political will to do it. And fixing it matters beyond just the young people directly caught up in it. None of us can look forward to a stable future when millions of young people around the world don't have decent work, can't build a life, and are checking out of the economy entirely. These are the people who are supposed to be driving growth, paying taxes, and yes, supporting the rest of us when we get old. Now, for the first time since the Industrial Revolution, younger generations in wealthy countries are struggling to exceed their parents' wealth despite overall economic growth. And this is changing our economies.
We've made an entire video unpacking exactly why that is. You should be able to click to it on your screen now. Thanks for watching, mate. Bye.
