Abstract

This paper analyzes the causes and consequences of the percentage of the youth population that is not working, in school or in traning, Neets, in Guatemala. The study rests on the estimation of regression equations that explain the percentage of Neet population in terms of variables associated with the labor market; other set of equations were estimated to assess the role that Neets have in the Guatemalan economy. The data employed was taken from the World Bank’s World Development Indicators. The results indicate that the percentage of female and male Neets decrease as the credit to the private sector increase; said percentage increases with the increase of the deficit in the trade balance and with the increase in youth unemployment. Another result is that the Neet population exert negative impacts on the employment to population ratio and on the rate of economic growth. These results are augmented by the analisis of the relationships existing between the percentages of Neets and economic growth, the number of homicides and the number of persons that are incarcerated using a cross section of 2010 data from 13 Latin American countries. The results presented in the paper should motivate policy makers in Guatemala and other countries to design and implement policies geared towards preventing that youth become Neets.

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