A Socio-Economic Analysis of Youth Disconnectedness

In this paper we investigate the prevalence of "disconnectedness" among German youth. Youth disconnectedness can have several dimensions. Unemployment, failure in school, the lack of an intimate relationship and developmental disorders are among the most important ones. Many youths in modern society lack networks to provide emotional support, financial assistance and housing. Two problems for disconnected youths may arise. First, when loans are difficult to obtain due to imperfections in credit markets, insufficient investment in education and human capital can result if family and friends are not available to provide support. Second, integration into society is contingent upon the passage of a number of tests with formal and informal rules. Those who do not pass such tests or who do not adhere to social rules have a higher probability of future failure. This can create a vicious downward spiral. The definition of disconnectedness used in our paper is based on economic and social factors. A disconnected individual is one who is not working, not enrolled in school, and not living together with a partner. While there is often a correlation between disconnectedness and anxiety or mood disorders, an investigation with the psychological dimension of disconnectedness is left for future research. Around 12% of young people between the ages of 17 and 19 are disconnected according to our definition. This figure has been on the rise since 2002. There is evidence that an adverse family environment is the most decisive variable for being disconnected at 17-to-19 years of age. While there is no evidence that an immigrant background per se contributes to disconnectedness, adolescents with an immigrant background are overrepresented among the disconnected. Disconnectedness seems to stem from having parents with a low educational level and/or from growing up in a broken home. Parents in such families have difficulty providing emotional and material support for their offspring in times of developmental change as well as in times of economic hardship. We find evidence that economic downturns contribute to disconnectedness with a delayed effect. Following a recession, the most disadvantaged youths seem to suffer most, presumably because recessions aggravate the wounds left from early life adversity. Our results suggest that the current economic crisis will result in an increase in youth disconnectedness in the coming years. In sum, disconnectedness seems to result from low-quality adult mentoring in developmental periods when mentoring is most needed. Finally, a word as to what the paper does not do may be appropriate here. The paper does not contribute to a better understanding of public programmes for disadvantaged youths, which is a topic left to future research