Untangling the roles of low skill and education in predicting youth NEET statuses: negative signalling effects in comparative perspective

Education determines life chances across the globe, but human capital and skill formation offer context-specific advantages in the labour market during the transition from school to work. Our study focuses specifically on the varying effects of low skill on youth `not in employment, education or training' (NEET) statuses via educational attainments. Using Programme for the International Assessment of Adult Competencies (PIAAC) data, we estimate the extent to which country-specific relative low skill levels affect young people's probability of reporting long-term NEET statuses across contexts. We find that low skill and education have differing effects on the probabilities of reporting NEET statuses cross-nationally. We also conduct mediation analyses to examine to what extent the negative signalling effects of low education explain the impacts of skill disadvantages on NEET statuses. We find that the indirect effect of low skill through education is particularly important in countries with vocationally oriented education systems.