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A Dynamic Analysis of Skill Formation and NEET status

Author

Listed:
  • Daniel Gladwell

    () (School of Health and Related Research, University of Sheffield)

  • Gurleen Popli

    () (Department of Economics, University of Sheffield)

  • Aki Tsuchiya

    () (School of Health and Related Research & Department of Economics, University of Sheffield)

Abstract

This paper uses a dynamic Structural Equation Model to investigate the determinants of NEET (Not in Education, Employment or Training) status in adolescents. We model: the cumulative formation of cognitive ability over multiple periods through the life of the young person, up to completion of compulsory education; and the impact that cognitive ability has on NEET status at one and two years after compulsory education. Within this framework we address the issue of latent heterogeneity across individuals. The analysis finds that cognitive ability remains the key predictor of NEET status, and explains the persistence in NEET status. We also find evidence of significant indirect effects (of magnitudes similar to direct effects of ability) of aspirations of the young person and their parents in the prevention of NEET status. Health (general and mental) plays an important role in ability formation and in explaining NEET status; however, its impact differs between the sexes.

Suggested Citation

  • Daniel Gladwell & Gurleen Popli & Aki Tsuchiya, 2015. "A Dynamic Analysis of Skill Formation and NEET status," Working Papers 2015016, The University of Sheffield, Department of Economics.
  • Handle: RePEc:shf:wpaper:2015016
    as

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    File URL: http://www.sheffield.ac.uk/economics/research/serps/articles/2015_016
    File Function: First version, June 2015. Updated version, October 2016
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Adolescence; NEET; Dynamic modelling; Ability formation; Latent heterogeneity; LSYPE;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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