Determinants of NEET’s Scarring Effect: An Econometric Analysis from an SDG 8 Perspective in High-Income EU Countries

The NEET category refers to the proportion of young people who are neither employed nor in education or training. The success of Sustainable Development Goal 8 largely depends on reducing the number of NEETs, one of its sub-goals. This study examines the long-term impact of gross domestic product, human development, social globalization, and patent applications on NEET in eight EU countries during 1991–2021, within the framework of SDG 8. For long-run estimation, the study employs panel data techniques that account for cross-sectional dependence and heterogeneity, specifically the Augmented Mean Group (AMG) and Regularized Common Correlated Effects (RCCE) estimators. According to country-specific findings, PA has a statistically significant effect in reducing NEET rates in France and Spain, while human development has a similar effect in Portugal. In contrast, economic growth and social globalization do not exhibit statistically significant effects on NEET rates at the country level. The results underscore that, in high-income EU countries, policies designed to simultaneously enhance human development and innovation capacity are central to tackling the NEET issue, consistent with the objectives of Sustainable Development Goal 8. The study contributes to the literature by providing a comparative empirical assessment of NEET determinants within a framework that accounts for cross-country heterogeneity and multiple structural factors.