Small differences matter: how regional distinctions in educational and labour market policy account for heterogeneity in NEET rates

Labour market and education policy makers and researchers are increasingly focusing on the NEET indicator as a supplement to the youth unemployment rate. Analyses of factors influencing NEET have concentrated primarily on individual characteristics such as gender and migration background on one hand, and on macro-level factors of nations such as economic growth and minimum wage regulations on the other. However, nations are not homogenous, especially when a country is divided into several federal states, as is the case with Austria. This article aims to analyse regional differences within Austria. In order to explain the differences, we define a multilevel model that contains four contextual factors: the importance of upper secondary education; the importance of dual education; vacant jobs; and expenditures for active labour market policy. Because the institutional level addresses different age groups, the analysis was split into two age groups: 15-19 and 20-24 years. The results have shown that, besides the social structure of the population, contextual factors like the upper secondary education, the dual education, vacant jobs, and expenditures for active labour market policy are also relevant for explaining regional differences in the NEET rates. But one main insight was that the impact of the contextual factors varies between different social groups.