In 2018 it is estimated that 6.0% of young people 16-24 years old in Iceland were not in employment, education or training (NEET). This is equivalent to almost 2,400 youths being neither in employment nor in education or training that year. This is the first time Statistics Iceland publishes figures about the rate and number of youths that are neither part of the educational system nor the labour market. The International Labour Organization (ILO) has pointed out that this group can be at risk for social exclusion and material deprivation as they neither get paid for work nor build skills through education or training.
Figure 1. Percentage of young people 16-24 years old that are not in employment, education or work The line shows the estimated percentage and the shaded area the 83.4% confidence interval. Confidence intervals of this kind are suitable for comparing two figures, here the results of two years. If the shaded areas of two estimates do not overlap, the difference is statstically significant.
Like other countries, Iceland has set the goal to substantially reduce the proportion of youth not in employment, education or training by 2020 (Sustainable developmental target no. 8.6). In 2014, the NEET ratio was 7.2% and has since then declined slightly. In 2016, as well as 2017, the decrease was statistically significant compared to 2014, or around 2%. In 2018, the rate slightly increased again and is estimated at 6.0%, but this decrease is not statistically significant compared to 2017. However, the ratio in 2018 is substantially lower than the first years after the economic collapse of 2008 when it was in the range of 8.3% – 9.1%. Broadly speaking, the percentage of young people 16-24 years old that are not in work, education or training is now similar to the typical levels in the years before the economic collapse.
The NEET rate in Iceland among the lowest in Europe
In 2018, the rate of young people 16-24 years old not in employment, education or training in Iceland was among the lowest measured in Europe. On average in the EU countries (28 countries), 10.5% were not in employment, education or training, in comparison to about 5% in Iceland according to Eurostat, which is similar to the rates in Norway, Netherlands, and Luxembourg. The rate is highest in Turkey or 24.4%, with North Macedonia following close behind with 24.1%. It is important to note that Eurostat uses only individuals in private households while Statistics Iceland also includes those who live in institutions. This explains why Statistics Iceland’s estimates are higher than Eurostat’s.
Figure 2. The percentage of youths aged 15-24 not in employment, education or training in 2018 in Europe Source: Eurostat
NEET ratio higher for women
Women aged 20-34 years were more likely than men of the same age to be in neither employment, education nor training for most of the period 2003-2018. In the period 2003-2008, the proportion of people not in employment, education or training was higher among women than men, a gap ranging between 3.5%-5.6%. Following the economic crisis, the percentage of both men and women not in employment, education or training increased. However, as the increase was greater among men this resulted in the disappearance of the sex difference. Since 2013, the sex difference has increased again and is statistically significant the following years. In 2018, the rate was 8.5% among women and 6.4% for men. This gender difference is probably not explained by young women being in need of work or not studying as much as men do. Official statistics show that the unemployment rate of young women is generally lower and their enrollment rate is on average higher than that of men’s. Therefore, the difference may be explained by young women being more likely to be outside of the labour force than men are. For example, women 20-34 years old may be more likely to start their parental leave before they have entered the labour market, be disabled, sick, or temporarily incapacitated, or more likely to be homemakers. The gender gap is smaller in Iceland than on average in the EU. On average 12.2% of men in the EU countries were neither part of the education system nor employment market, compared to 20.9% of females, which adds up to 8.7% difference.
Figure 3. The percentage of young people 16-24 years old not in employment, education or work
The NEET rates increase with age
There is a considerable difference between the NEET rates of different age groups. The ratio is lowest amongst 16-19 year olds, as most of the people in this age group are probably in formal or informal education. A comparison between 20-34 year olds and 35-64 year olds shows a significantly higher ratio among the older group most years between 2003 and 2018. However, it is clear that the economic collapse hit 20-34 year olds particularly hard as the ratio for this age group increased from 5.6% in 2007 to 13.4% in 2010.
Figure 4. The percentage of young people 16-24 years old not in employment, education or work
About the statistics
The indicator people not in employment, education, or training is a part of the Icelandic Social Indicator System. Social indicators are a collaboration between Statistics Iceland and the Ministry of Social Affairs. The Icelandic Social Indicator System aims to measure factors that are inherently important to people’s lives and directly affect their social well-being. Social indicators should also be useful for governmental officials and the public for monitoring social development. This particular indicator is important as it reflects not only the people who stand outside of the labour market and the education system but also indicates how well-prepared young people are to take over where the older generation left off. Without adequate work experience and skill training, young people may find it difficult to pick up the baton.
The indicator not in employment, education or training, abbreviated as NEET, corresponds to the percentage of the population of a given age group and sex who is not employed and not involved in education or training. NEET refers to persons meeting these two conditions:
1. They are not employed, i.e. unemployed or inactive according to the International Labour Organisation definition (ILO).
2. They have not received any formal or non-formal education or training in the four weeks preceding the survey.
The indicator takes into account the total population of the same age group and sex. This is an international definition used both by Eurostat and OECD.
The figures are based on the Labour force survey conducted by Statistics Iceland. Since the Labour force survey uses a sample of the population there is a need to account for uncertainty. To assess the uncertainty, confidence intervals are calculated for both the ratio and the estimated number that are NEET. The confidence interval estimates how exactly the sample value represents the true value of the population. With 83.4% certainty the true estimate is contained within the upper and the lower bounds. Confidence interval of this kind are suitable for comparing two estimates. A difference between two estimates is considered statistically significant if the confidence interval of the estimates do not overlap.