The president Dina Boluarte has maintained that, thanks to the strategies developed by the Executive, economic growth will exceed 3% this year and that this dynamism will continue in 2025. However, what the president has not taken into account is that said growth is insufficient to reverse the current problems faced by youths and that, on the contrary, is condemning them to have jobs poorly paid in the future.
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According to a study by Central Reserve Bank (BCR), the participation of young people who are not enrolled or attending an educational center and are unemployed (known as ‘NEETS’ because they do not study or work) is “significantly above the level of 2019”, the year before the health crisis.
The BCR concludes that this situation shows “how the economic dynamics of the years after the COVID-19 pandemic were insufficient to reverse the negative impacts on the youth population.”
As a result of COVID-19, the GDP plummeted by 10.9% and this deterioration shot up the percentage of ‘NEETs’ to 26.1%, according to the INEI. With the growth obtained in 2021 and 2022, of 13.4% and 2.8% respectively, the participation of ‘NEETs’ was reduced to 18.5% in 2021 and 16.8% in 2022, but rose to 17.1% with last year’s recession (-0.4 %).
According to historical information, the percentage of ‘NEETs’ has remained at levels close to 14% when the economy was growing on average 6%, hence the need to grow at higher rates.
Impact
The BCR points out that even the national percentage of ‘NEETs’ hides certain heterogeneities. He explains that, for example, the participation of ‘NEETs’ in urban areas (17.6%) is higher than in rural areas (15.1%), which is related to the incidence of poverty, which is currently higher in cities. .
“Among young people in households in poverty there is a greater proportion of those who do not study or work. In fact, the participation of ‘NEETs’ among poor young people was 23.8%, compared to only 14.5% in non-poor households in 2023,” indicates the BCR.
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Thus, the study concludes that the presence of ‘NEETs’ is linked to the economic vulnerability of households, since the probability of being ‘NEET’ decreases as young people reside in households in higher income quintiles.
And among the consequences of this problem is the decrease in future productivity, as well as the employability of this population, because the lack of preparation inhibits them from accumulating human capital and, therefore, limits their income.
Rollback policies
In addition to the respective economic growth, the Central Bank highlights the need for specific interventions to address this problem.
Among these, he highlighted that policies are required that strengthen educational opportunities and reduce barriers to quality employment for young people.
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