Summary

Context of this report

While many young people successfully transition from school to tertiary education and work, there is a significant group who face persistent barriers which prevent them reaching their education and employment goals. This is a long-standing and multi-faceted policy challenge with intergenerational consequences.

An area where we can usefully improve our information is around young people’s experience of limited employment. Limited employment provides a broader concept than the existing standard measure of ‘not in education, employment or training’ (NEET). Limited employment captures a range of activities and situations where young people have no or limited connections to full-time, well-paid employment, or to education that is likely to move them into such employment. It also identifies where this persists over time, rather than only at points in time.

Understanding limited employment and its prevalence provides a starting point for identifying the persistent barriers which can prevent young people from reaching their goals and aspirations.

Purpose of report

The purpose of this report is to extend the information we have on young people’s experience of limited employment. It looks at who experiences limited employment, and the pathways young people follow in and out of limited employment.

The report also looks at factors that are associated with being in limited employment for longer periods of time. This analysis highlights a complex array of interrelated factors that influence young people’s lives. They cover socio-economic disadvantage in childhood, poor experiences of education and later-life experiences.

The analysis in the report is subject to significant data limitations. The data is drawn from government administrative systems. This data generally focusses on assistance and interventions provided to children and young people. It lacks important contextual information and outcomes that matter most to young people, their whānau and communities.

What is limited employment?

Limited employment is a broader concept than NEET. It includes young people who are in low-paid, part-time or casual work, and those with low-level tertiary education qualifications (Level 1 and 2). It is also defined to include young people who are in these activities for a large part of each year. This contrasts with the official NEET statistics which include young people who may have been NEET for quite short periods of time.

Characteristics of young people in limited employment

The data shows that across all groups of young people, limited employment peaked at age 19 and then reduced to a steady rate after that. Limited employment rates were higher for females than for males, and for Māori and Pacific young people than for other ethnic groups, and for young people living in Te Tai Tokerau, Gisborne/Hawke’s Bay and Bay of Plenty than for those living in other regions.

The relationship between work experience, tertiary study, and limited employment

Exploratory analysis looked at the effect of work experience and tertiary study on future limited employment. It looked at what young people did between the ages of 16 and 25 and the relationship this had to being in limited employment at age 26. The results suggest that having at least two years’ work experience in the earlier years may reduce the likelihood of being in limited employment at age 26 more than having one or more years of tertiary education. Being engaged in tertiary education for at least three to four years in the earlier years also significantly reduces the likelihood of limited employment at age 26, particularly if the engagement is at Level 3 or above.

Comparing limited employment across birth cohorts

Most of the analysis in this report is based on young people born in 1992, who turned 16 in 2008 and 24 in 2016. To check whether the results from the 1992 birth cohort are consistent with other birth cohorts, we compared them to young people born earlier (in 1990) and later (in 1994). We found no major differences in the rates of limited employment across these birth cohorts.

We were also interested in whether limited employment persists into adulthood. We looked at the 1984 birth cohort from ages 24 to 34. This showed that limited employment does persist into adulthood, with around 30 percent of the population in limited employment at each age from 24 to 34 years.

Pathways into and out of limited employment

Individuals do move in and out of limited employment over time. We looked at the extent to which young people move between being in limited employment and not, across two-year age periods from ages 16 to 26. People who were in limited employment for both years of each two-year age period were more likely to remain in this status in the following age period. Similarly, people who were not in limited employment for both years of each age period were more likely to remain in that status in the following age period.

Pathways for young people who were in limited employment at age 17 showed that most of these people (about 60 percent) end up in long-term limited employment.

The pathways for Māori young people show that they face greater barriers to moving out of limited employment. Once Māori young people were in limited employment, they were more likely to remain in this status across ages 16 to 26. However, if Māori young people were out of limited employment, they were more likely to remain out of limited employment than other young people.

Intensity of limited employment from ages 16 to 24

We also looked at the total proportion of years that young people spent in limited employment from ages 16 to 24. We identified young people who spent all their years in New Zealand in limited employment, and those who spent more than half of their years in New Zealand in limited employment. These two groups were described as having high-intensity limited employment.

Young people who experienced socio-economic disadvantage in childhood, and/or had a poor experience at school were more likely to experience high-intensity limited employment. This showed up in higher rates for Māori, Pacific and disabled young people. Young mothers were also much more likely to experience high-intensity limited employment, in part due to caring responsibilities limiting their access to education and employment.

Young people who become disengaged from schooling were also more likely to end up in high-intensity limited employment. Disengagement is indicated in the data by experiencing stand-downs, suspensions, and exclusions, having engagement with attendance services, as well as moving schools three or more times.

Key factors most associated with high-intensity limited employment

We looked further to identify the key factors most associated with high-intensity limited employment. This analysis shows that factors we know are strongly associated with social and economic disadvantage and inequality are also strongly associated with high-intensity limited employment. Many of these factors highlight the failure of existing education, welfare, and employment systems to deliver equitable outcomes for young people.

The biggest factor associated with being in high-intensity limited employment was not attaining at least NCEA Level 2. Becoming a mother before age 19, and not attaining a driver licence by age 18 also had a large association with high-intensity limited employment.

Other factors highlight intergenerational aspects. Young people were more likely to be in high-intensity limited employment if their parents also had low education qualifications and/or had ongoing experiences of limited employment themselves. This can be compounded by socio-economic deprivation and family dislocation (as indicated by Oranga Tamariki notifications).

Relationship between early- and later-life limited employment

We looked at people who were in limited employment at ages 20 to 24 and whether they were also in limited employment at ages 25 to 34. Overall, this analysis showed that there was a strong relationship between early-life and later-life limited employment. If young people were in limited employment at ages 20 to 24, there was a high chance they would be in limited employment in later years. Most people who were never in limited employment at ages 20 to 24 experienced little to no limited employment in later life.