© Korea Economic Research Institute(KERI)
© Korea Economic Research Institute(KERI)

According to the recent analysis, the economic cost of so-called 'NEET(Not in Education, Employment or Training)' among young Koreans aged 15 to 29 reaches about 62 trillion won, more than 3% of GDP. 

The 'Korea Economic Research Institute(KERI)' announced on October 6th that it was identified as such through the results of a study titled "Economic Cost of Korean Youth NEET."

According to the report, the result of estimating the proportion of NEET among young people through the data from the 'Korean Labor and Income Panel Study', it reached 22.3% in 2019. 

The proportion of NEET, which had maintained in the 16-17% range since 2010, increased to 19.8% from 2015, but even rose up to 22.3% in 2019 after a slight decrease in 2018.

On the other hand, the average value of the Organization for Economic Cooperation and Development (OECD) has continuouslly declined since 2014, recording 12.9% in 2019, with Korea being about 9.4% higher.

Recently, the proportion of NEET is found to be greater in male than in female, and even the increase was greater in male. The proportion of NEET in male increased from 17.1% in 2010 to 25.9% in 2019, while that in female increased from 17.1% to 18.2% during the same period.

In addtion to this, as a result of both quantifying losses from NEET and estimating annual economic costs, including employers' 'Social Security Contributions', the annual economic cost of NEET increased from 33 trillion won in 2010 to 61.7 trillion won in 2019.

The report also analyzed that the proportion of the economic cost of GDP to NEET recorded 2.5% in 2010, but showed ups and downs for following years, and then rose up to 3.2% in 2019.

The report noted that it is necessary to induce young people to enter the labor market as labor shortages are feared since the working-age population is expected to decline continuously in the future due to changes in the Korean demographic structure.

Yoo Jin-sung, a researcher at KERI, said, "The proportion of NEET tends to be relatively high among the lower income bracket and young people with no job training experience." He also added, "Therefore it is necessary to strengthen service support such as employment experience, vocational training, and internship, targeting on the lower income bracket." 

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