Amidst the economic shock due to COVID-19 last year, the nation saw a record-breaking number of young people who are “Not in Education, Employment, or Training” (NEET). A recent survey showed that one in ten young people did not even try to find employment. Unlike the government’s analysis showing that employment is on the rebound, this year the increase in the number of young NEETs is expected to be bigger, pushing the total up from last year. Experts are calling for policies for young people, since it gets harder to find jobs the longer the period out of employment, and since wages could be lower even if they do find employment.

According to the “Study on the Impact of COVID-19 on Young NEETs” published in a collection of research papers by the Korea Labor and Income Panel Study on November 21, the number of people who were not in education, employment or training (NEET) or engaging in domestic labor among single people ages 15-34 reached 1,723,000. This was 145,000 more than the previous year (1,578,000).

The rise in young NEETs was driven by young people who did not seek employment. The number of such young people was 1,282,000, which was 166,000 more than a year ago. The number jumped at a rate four times that of the previous annual average of 46,000 from 2016 to 2019. NEETs who were not looking for jobs accounted for 10.5% of all young people (13 million), exceeding 10% for the first time last year.

A closer look at gender showed that the percentage of NEETs who had given up searching for employment was slightly higher among women (15.2%) than men (14.7%). The trend in the last five years showed that the percentage of women NEETs not seeking employment (36.3%) increased at a faster rate than men (27.5%).

A look at age showed that the increase was notable among those ages 25-29 and 30-34. The percentage of non-job-seeking NEETs increased the most among those ages 25-29 (24.8%), who newly entered the labor market after graduating from college. With the exception of those ages 15-19, a relatively smaller age group, non-job-seeking NEETs increased at the second fastest rate among people ages 30-34 (13.4%), who had been in the labor market for quite a while. Based on the level of education, non-job-seeking NEETs increased at the steepest rate among people with a college or higher level of education (21.5%). People in this group answered that they were either preparing for employment (45.0%) or taking a break (45.5%). Nam Jae-ryang, the research fellow at the Korea Labor Institute who authored the latest paper explained, “Young NEETs not seeking employment are likely to be going back and forth from preparing for employment to taking a break without going to school or other private training institutions.”

When people take a break from work without seeking jobs, the likelihood of their employment in the future drops. A study tracked and analyzed labor activities of young people (ages 25-34) who did not seek jobs at the time of the 1998 Asian Financial Crisis for 22 years, and the result showed that on average 43.4% were employed--30.6% lower than people with no experience but who constantly sought jobs (74.0%).

The gap widened the longer the people took time off job seeking. In the case of young people who did not seek jobs for two consecutive years in 1998 and 1999, the average employment rate for 21 years was 27.5%, 44.9% lower than people who had no job experience (72.4%).

Even when they did find employment, they often found themselves earning lower wages. Young people who did not seek jobs in 1998 received an average 17.4% less in wages compared to those who continued to seek jobs. Young people who did not seek employment for two consecutive years in 1998 and 1999 experienced an even wider wage gap--a difference of 38.0% on average. When the period a person did not seek employment doubled, the average loss in wages that that person suffered also more than doubled.

Nam said, “Under usual circumstances, the experience of being out of employment, education or training in one’s younger years could have a temporary impact, but when facing a big shock like COVID-19, it can remain as a lasting wound,” and argued, “If the number of young NEETs increases and their characteristics change, then the economy will suffer a more serious injury than is revealed.”

In fact, despite the government’s analysis that a robust recovery in employment is ongoing, the number of young NEETs has already reached 1,182,000 as of August this year. If the trend continues, the figure will reach 1,773,000 by the end of the year, surpassing last year’s numbers.

Nam said, “The government needs to try and create policies so that people who temporarily experience the life of non-job-seeking NEETs due to the shock of COVID-19 do not remain in that situation any longer.”