NEETs, Discrimination And Compliance, And Unintended Consequences

Thursday, 14 May 2026, 3:37 pm
Opinion: Keith Rankin

Since the latest Household Labour Force data was released on 6 May, there has been quite a lot of unfocussed chatter about NEETs; young people not in employment, education or training. The standard narrative about NEETs is that they are disengaged young people, especially teenagers, not sufficiently motivated to undertake tertiary education or vocational training in order to find a job.

The latest overall statistic is that 14.4% of New Zealand resident people aged 15-24 are NEETs. In addition, there is an even higher 'underutilisation rate'. These data are published in an awkward way which makes it hard to mesh them together. And there is a further unmeshed measure; persons aged 15-24 – especially 20 to 24 – who have emigrated.

The real story this year is about young adults aged 20 to 24, not disengaged teenagers. "Women aged 20 to 24 continue to have the highest NEET rate, rising 1.9 percentage points to 20.3 percent in the March 2026 quarter". This 20.3% is well above the overall rate of 14.4%. The female adult NEET rate has jumped significantly, whereas the male adult rate is lower and has not jumped much this year.

NEETs can be separated into four groups: teenage males and females, and young adult males and females ('adult' here being defined as aged over 20). Of these groups, we would expect adult females to be least disengaged. The story that appears to be true is that many if not most NEETS aged 20-24 are young adults who have completed their education or training; rather than being disengaged, these NEETs are educated, trained, often graduated, and raring to commence their careers.

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The problem, then, is that we have created an economy which is barely interested in employing our educated youth. This is especially ironic when we keep hearing superannuation scare-stories about how this group of young people will be required to 'support' in retirement their huge parental (Gen-X) and grand-parental (Boomer) generations. The statistics clearly show that we are not nurturing this very special cohort, born in the early 2000s.

(Re the underutilisation rates, males aged 20-24 have gone from 11.6% in early 2023 to 18.7% in early 2024 to 19.0% in early 2025 to 21.8% in early 2026. Females aged 20-24 have gone from 17.0% in early 2023 to 23.0% in early 2024 to 22.2% in early 2025 to 25.0% in early 2026. These worsening statistics cannot be blamed on the Israel-USA-Iran war.)

Why Females?

The latest data suggests that tertiary-educated young women are having more difficulty gaining employment than their male peers. Employment outcomes for this age group are very much about employers' hiring practices.

Economists understand that the perceived labour-cost associated with new hires is all important. This is an age group with minimal work experience, so it means that demographic and educational attributes will be particularly used when making hiring decisions. Statistical profiling – something all employers (including female employers) do, even if they do so with a degree of distaste – is particularly relevant to this age group.

Is the expected cost – a statistical concept meaning the average perceived cost – of hiring young females greater than the expected cost of hiring young males? Especially in the context of very tight business profit margins.

(Differences in expected cost played a huge role in hiring decisions during the Great Depression of the 1930s. Teenage females were cheapest, then teenage males, and then adult females. Adult male joblessness was particularly high in the early 1930s because adult males were the most costly demographic to hire.)

Reasons why young females might be perceived as more costly to employ

Such reasons arise from both statistics and politics.

Individual employers will have access to their own company data. If females in the past decade or so have had a record of leaving their jobs sooner than males, or if they have had a record of taking more sick leave than males, then those records would influence the perceived cost of employing any given female job applicant. Willingness to work overtime – including unpaid overtime – is also something that employers have records of; such willingness, on average, may be different for males than for females.

In the realm of politics, there may be areas of actual positive discrimination – for example, menstrual leave, which exists in a few countries. (See What working women really want: Paid menstrual leave? Stuff 15 August 2023. And of course there are definite examples around maternity leave.) Or perceived positive discrimination; perceived, for example, because pay equity is widely confused with equal pay.

In relation to options like maternity leave and menstrual leave, one way to politically manage these is to offer men similar discretionary leave provisions as those offered to women, to the point that employers perceive the likelihood that a man will take discretionary leave is the same as the likelihood that a woman will take such leave. This, I understand, is the Swedish way. In order to maximise employment of both sexes, the Swedish authorities offer discretionary leave provisions to females and males in equal measure.

Another issue is the sensitivity around the 'gender pay gap'. (For society as a whole, the 'pay equity' argument is that gender-based pay inequity is between occupations, not within occupations or within workplaces.) Such sensitivity is heightened if employers are required to report to some government ministry their firms' gender pay ratios.

There is one relatively quick way through which employers can make their gender pay ratios more equal. It is to hire fewer young females, giving preference to males. Given that new hires are towards the bottom of employers' pay scales, having more junior males and fewer junior females will have a significant impact on a firm's reported gender pay ratio.

Unintended Consequences

The hiring practices mentioned above can all have unintended consequences. Very few employers nowadays – whether male of female employers – believe that it is a good thing to have a gender pay gap. All employers practice 'equal pay', as they have been mandated to do since 1972. But employers – under the pressure of legal or moral compliance to achieve one or two key statistics – can end up achieving problematic outcomes for other important statistics.

Is it possible that an unintended consequence of moral compliance in relation to pay equity – of attempts to equalise pay by gender, within firms and other employing organisations – has been to create more young adult female NEETs? It's a hypothesis that at least deserves to be investigated further.

Of course, there is a wider problem than this female-adverse NEET outcome. There are far too many adult NEETs of both sexes. Our recent governments, through stifling fiscal policies which undermine their own revenue base, have been playing an unnecessary and brutal game of musical chairs; a game in which the odds are stacked against New Zealand's young adults.

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.