Estimating the Cost of Youth Disengagement in New Zealand
Youth exclusion, disengagement, and overall underutilisation in the labour market has short term costs to the economy, as well as long term impacts on society. In this research we project the loss to productivity, measured in foregone wages, and the expected cost to public finances for NZ and Auckland youth aged 15-24 not in employment, education, or training (collectively known as NEET). We estimate the expected per capita cost of each NEET youth in NZ is approximately $26,847 over the next 1-3 years. The analogous cost for the Auckland cohort is found to be higher, due largely to higher foregone wages. Closer inspection reveals that Auckland NEET youth of Maori and Pacifica descent are associated with relatively high per capita costs compared to their NZ European counterparts. This result is driven by the greater propensity of Maori and Pacific Peoples to disengage from the education system earlier, to withdraw from the work force due to caregiving responsibilities at a younger age, and to experience longer durations of unemployment than their NZ European counterparts. The sizeable estimated costs associated with NEET youth highlight the urgent need for policy intervention directed at improving transitions from NEET status to the workforce, or further education/training.
|Date of creation:||May 2013|
|Contact details of provider:|| Postal: Commerce House, 360 Queen Street, Private Bag 92006, Auckland 1020|
Phone: +64 9 917-9721
Fax: +64 9 917-9976
Web page: http://www.aut.ac.nz/business/working-paper-series
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Gibson, 2000. "Sheepskin effects and the returns to education in New Zealand: Do they differ by ethnic groups?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 34(2), pages 201-220.
- Ben Lockwood, 1991. "Information Externalities in the Labour Market and the Duration of Unemployment," Review of Economic Studies, Oxford University Press, vol. 58(4), pages 733-753.
- Alan Manning, 1999.
"Pretty Vacant: Recruitment in Low Wage Labour Markets,"
CEP Discussion Papers
dp0418, Centre for Economic Performance, LSE.
- Manning, Alan, 2000. " Pretty Vacant: Recruitment in Low-Wage Labour Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(0), pages 747-770, Special I.
- Alan Manning, 1999. "Pretty vacant: recruitment in low wage labour markets," LSE Research Online Documents on Economics 20231, London School of Economics and Political Science, LSE Library.
- Stiglitz, Joseph E, 1975.
"The Theory of "Screening," Education, and the Distribution of Income,"
American Economic Review,
American Economic Association, vol. 65(3), pages 283-300, June.
- Joseph E. Stiglitz, 1973. "The Theory of 'Screening', Education, and the Distribution of Income," Cowles Foundation Discussion Papers 354, Cowles Foundation for Research in Economics, Yale University.
- Andrew Clark & Yannis Georgellis & Peter Sanfey, 1999.
"Scarring: The Psychological Impact of Past Unemployment,"
Studies in Economics
9903, School of Economics, University of Kent.
- Clark, Andrew E & Georgellis, Yannis & Sanfey, Peter, 2001. "Scarring: The Psychological Impact of Past Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 221-41, May.
- Narendranathan, W. & Elias, P., 1990.
"Influences of Past History on the Incidence of Youth Unemployment: Empirical Finding for the U.K,"
The Warwick Economics Research Paper Series (TWERPS)
369, University of Warwick, Department of Economics.
- Narendranathan, Wiji & Elias, Peter, 1993. "Influences of Past History on the Incidence of Youth Unemployment: Empirical Findings for the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(2), pages 161-185, May.
- Thomas A. Mroz & Timothy H. Savage, 2006. "The Long-Term Effects of Youth Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 41(2), pages -.
- Richard Fabling & David C. Maré, 2012. "Cyclical Labour Market Adjustment in New Zealand: The Response of Firms to the Global Financial Crisis and its Implications for Workers," Working Papers 12_04, Motu Economic and Public Policy Research.
- Gerdtham, Ulf-G. & Johannesson, Magnus, 2003. "A note on the effect of unemployment on mortality," Journal of Health Economics, Elsevier, vol. 22(3), pages 505-518, May.
- Psacharopoulos, George & Patrinos, Harry Anthony, 2002.
"Returns to investment in education : a further update,"
Policy Research Working Paper Series
2881, The World Bank.
- George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 111-134.
- Dongxu Wu & Zhongmin Wu, 2011.
"Crime, Inequality and Unemployment in England and Wales,"
- Dongxu Wu & Zhongmin Wu, 2012. "Crime, inequality and unemployment in England and Wales," Applied Economics, Taylor & Francis Journals, vol. 44(29), pages 3765-3775, October.
- Fergusson, David M. & John Horwood, L. & Woodward, Lianne J., 2001. "Unemployment and psychosocial adjustment in young adults: causation or selection?," Social Science & Medicine, Elsevier, vol. 53(3), pages 305-320, August.
- Goldsmith, Arthur H. & Veum, Jonathan R. & William Darity, Jr., 1996. "The impact of labor force history on self-esteem and its component parts, anxiety, alienation and depression," Journal of Economic Psychology, Elsevier, vol. 17(2), pages 183-220, April.
- Béland, Francois & Birch, Stephen & Stoddart, Greg, 2002. "Unemployment and health: contextual-level influences on the production of health in populations," Social Science & Medicine, Elsevier, vol. 55(11), pages 2033-2052, December.
- Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
- Gail Pacheco, 2012. "The cost of poor transitions for youth," Working Papers 2012-09, Auckland University of Technology, Department of Economics.
- Paul Gregg & Emma Tominey, 2004. "The Wage Scar from Youth Unemployment," The Centre for Market and Public Organisation 04/097, Department of Economics, University of Bristol, UK.
- Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
- Arulampalam, Wiji, 2000.
"Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages,"
IZA Discussion Papers
189, Institute for the Study of Labor (IZA).
- Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages F585-606, November.
- Fiona Carmichael & Robert Ward, 2000. "Youth unemployment and crime in the English regions and Wales," Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 559-571.
When requesting a correction, please mention this item's handle: RePEc:aut:wpaper:201304. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gail Pacheco)
If references are entirely missing, you can add them using this form.