The Impact of NEET and Labor Market Indicators on Human Development: A Panel Data Analysis for EU-28 Countries

This study aims to investigate the effect of education, unemployment and not-in-education employment or training (NEET) population on human development in the EU-28 countries during the 2004-2018 period by using panel data analysis. According to the panel data analysis results with Common Correlated Effects Mean Group (CCEMG) estimator, the variables unemployment (UNE) and education (EDU) are statistically significant in explaining Human Development Index (HDI) across the panel. In contrast, the variable NEET (NEET) is found to be not statistically significant, but the obtained coefficient is in the expected direction. In this case, a 1% increase in the UNE variable decreases HDI by 0.01%, and a 1% increase in the EDU variable increases HDI by 0.30%. The model appears to be statistically significant. According to the regression estimation results based on for each country, the coefficients vary quantitatively and statistically. Still, it is noteworthy that the NEET variable, which is statistically insignificant throughout the panel, varies statistically from unit to unit. These results confirm that NEET and HDI are negatively correlated in Czechia, Denmark, Finland, and Germany, while positively correlated in France, Poland, and Portugal.

Keywords:

human development, NEET unemployment, panel data analysis,

PDF

___

Aturupane, H., Glewwe, P., & Isenman, P. (1994). Poverty, Human Development and Growth: An Emerging Consensus?. American Economic Review, Papers and Proceedings, 84(2), pp. 244-249.
Aydin, M. (2019). İnsani Gelişme ve Ekonomik Büyüme İlişkisi: Türkiye Üzerine Ampirik Bir Çalışma. Research Journal of Politics, Economics and Management, 7. 33-43.
Baltagi, B. (2008). Econometric Analysis of Panel Data (4th ed.). Hoboken, NJ: John Wiley & Sons.
Baltagi, B. H. , Feng, Q. & Kao, C. (2012). A Lagrange Multiplier Test for Cross-Sectional Dependence in a Fixed Effects Panel Data Model. Journal of Econometrics. 170(1): 164-177.
Breusch, T. & Pagan, A. (1980). The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics. Review of Economic Studies. 47: 239-253.
Bynner, J., & Parsons, S. (2002). Social exclusion and the transition from school to work: The case of young people not in education, employment, or training (NEET). Journal of Vocational Behavior. 60(2). 289–309. https://doi.org/10.1006/jvbe.2001.1868
Balcı, E., & Özcan, S . (2019). İnsani Gelişmişlik ve Büyüme Arasındaki İlişki: OIC Ülkeleri Üzerinde Bir Analiz. Sakarya İktisat Dergisi. 8 (3). 222-235.
Côté, J. E. (1997). An empirical test of the identity capital model. Journal of Adolescence, 20(5), 577-597.
Eberhardt, M., & Bond, S. (2009). Cross-Section Dependence in Nonstationary Panel Models: A Novel Estimator. MPRA WP 17870.
Eberhardt, M., & Teal, F. (2010). Productivity Analysis in Global Manufacturing Production. Economics Series Working Papers 515. University of Oxford, Department of Economics.
Erdem, E., & Çelik, B. (2019). İnsani Gelişme ve Ekonomik Büyüme İlişkisi: Bazı Afrika Ülkeleri Üzerine Bir Uygulama. Bingöl Üniversitesi Sosyal Bilimler Enstitüsü Dergisi. 9(17). pp.13-36
Feng, Y., Lagakos, D., & Rauch, J. E. (2018). Unemployment and development (No. w25171). Working Paper, National Bureau of Economic Research.
Flores‐Crespo, P. (2007). Education, employment and human development: illustrations from Mexico. Journal of Education and Work. 20:1. 45-66. DOI: 10.1080/13639080601143120
Haq, M. (1995). The Advent of the Human Development Report. Reflections on Human Development. Oxford University Press. UK.
Hernández, Marco A. (2015). Estimating Capital Flows to Emerging Market Economies With Heterogeneous Panels, Working Papers, No. 2015-03, Banco de México, Ciudad de México.
Hull, K. (2009). Understanding the Relationship between Economic Growth, Employment and Poverty Reduction. Promoting Pro-Poor Growth: Employment. OECD Working Paper. pp. 69-93
Im, K., Pesaran, M. H., & Shin, Y. (2003). Testing for Unit Roots in Heterogeneous Panels. Journal of Econometrics. 115: 53-74.
Karnani, A. (2009). Reducing Poverty Through Employment. Innovations: Technology, Governance, Globalization. Volume 6. Issue 2. p.73-97. https://doi.org/10.1162/INOV_a_00071
Kelley, A. (1989). The "International Human Suffering Index": Reconsideration of the Evidence. Population and Development Review, 15(4), 731-737. doi:10.2307/1972597
Keskin, A. (2011). Ekonomik Kalkınmada Beşeri Sermayenin Rolü ve Türkiye. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 25(3-4), pp. 125-153.
Maddala, G.S. , Trost, R.P. , Li, H., & Joutz, F. (1997). Estimation of Short-Run and Long-Run Elasticities of Energy Demand from Panel Data Using Shrinkage Estimators. Journal of Business & Economic Statistics. 15(1): 90-100.
Morris, M. D. (1979). Measuring the condition of the world’s poor: The physical quality-of-life index. New York: Pergamon Press for the Overseas Development Council.
Quintano, C., Mazzocchi, P. & Rocca, A. (2018). The determinants of Italian NEETs and the Effects Of The Economic Crisis. Genus 74, 5. https://doi.org/10.1186/s41118-018-0031-0
OECD (2014). OECD Better Life Index Executive Summary http://www.oecdbetterlifeindex.org/media/bli/documents/BLI_executive_summary_2014.pdf (Date of access: 13/02/2020).
Pesaran, M. H., & Smith, R. (1995). Estimating Long-run Relationships from Dynamic Heterogeneous Panels. Journal of Econometrics. 68(1): 79-113.
Pesaran, M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. University of Cambridge, Faculty of Economics. Cambridge WP 0435 in Economics.
Pesaran, M. H. (2006). Estimation and Inference in Large Heterogeneous Panels with Multifactor Error Structure. Econometrica. 74: 967-1012.
Pesaran, M. H. (2007). A Simple Panel Unit Root Test in the Presence of Cross Sectional Dependence. Journal of Applied Econometrics. 22(2): 265-312.
Pesaran, M. H., & Yamagata, T. (2008). Testing Slope Homogeneity in Large Panels. Journal of Econometrics. 142(1): 50-93.
Ranis, G., Stewart, F., & Ramirez, A. (2000). Economic growth and human development. World development, 28(2), 197-219.
Sen, A. (1999). Development as freedom. Oxford: Oxford University Press
Stanton, E. A. (2007). "The Human Development Index: A History," Working Papers wp127, Political Economy Research Institute, University of Massachusetts at Amherst.
Suri, T., Boozer, M. A., Ranis, G., & Stewart, F. (2010). Paths to Success: The Relationship Between Human Development and Economic Growth. World Development, 39(4), pp. 506–522.
Swamy, P. A. (1970). Efficient Inference in a Random Coefficient Regression Model. Econometrica. 38(2): 311-323.
Taner, M., Sezen, B., & Mıhcı, H. (2011). "An Alternative Human Development Index Considering Unemployment," South East European Journal of Economics and Business, Sciendo, 6(1), 45-60.
Uğur, M. S. (2017). Amartya Sen’in Kapasite Yaklaşımı ve İnsan Merkezli Bir Kalkınma Anlayışı, Sosyoekonomi, 25(31), 91-107.
Ulas, E., & Keskin, B. (2017). Is There a Relation Between HDI and Economic Performances? New Trends in Finance and Accounting Proceedings of the 17th Annual Conference on Finance and Accounting. Ed. Procházka, D., pp. 61-70.
UNDP (2009). 2009 Human Development Report http://www.hdr.undp.org/sites/default/files/reports/269/hdr_2009_en_complete.pdf (Date of access: 13/02/2020).
UNDP (2010). 2010 Human Development Report http://hdr.undp.org/sites/default/files/reports/270/hdr_2010_en_complete_reprint.pdf (Date of access: 13/02/2020).
UNDP (2019). 2019 Human Development Index Ranking, http://hdr.undp.org/en/content/2019-human-development-index-ranking (Date of Access:13/02/2020).
Zanbak, M., & Kartal, A. (2019). “İnsani Gelişme Endeksi ile Kadın İşsizliği Arasındaki İlişki: BRICS-TM Ülkelerine Yönelik Ekonometrik Bir Analiz”, INES-2019 Proceedings, pp. 450-457.