Does Economic Freedom Alleviate Youth Disengagement? An Empirical Analysis of NEET in the European Union

Abstract

This study explores the impact of economic freedom on NEET (Not in Employment, Education, or Training) rates among youth aged 15–29 across 27 EU countries. Using data for 2002–2022, the study conducts a panel data analysis employing the Augmented Mean Group (AMG) estimator. Findings show that greater economic freedom significantly reduces NEET rates, with consistent effects across age subgroups. Results remain robust across alternative measurements, while economic growth and inflation are also influential. In line with SDG 8, policies promoting youth entrepreneurship, expanding vocational training, easing labour market entry, and enhancing structural economic freedom are recommended to foster decent work, inclusive growth, and long-term youth engagement in the EU.