Jobless Youths and the NEET Problem in Japan

This paper empirically examines the determinants of non-employed young Japanese people, whose number increased from the 1990s to the beginning of the 2000s. Non-working unmarried persons aged 15-34, who do not attend school, are classified into three types: job seekers (type 1), who search for jobs; non-job seekers (type 2), who express a desire to work but do not search for jobs, and non-job seekers (type 3), who express no desire to work. Those in type 2 and type 3, non-job seekers, are defined to be NEET or not in employment, education or training . Multinomial logistic regression results show that young persons whose expected returns from working are low-such as females, older people, the less educated and the long-term jobless-tend to refrain from working and become non-job seekers. Moreover, there is evidence of an income effect that makes youths from wealthy families more likely to be type 3 non-job seekers. However, the number of jobless youths from lower-income households has been increasing and hence, the income effect on type 3 jobless has become less relevant recently. As a result, young, less-educated males from poor families in Japan have become more likely to lose interest in work rather than those in middle-income families.