Canada’s young adults are increasingly finding themselves disconnected from both education and employment, with racialized youth and highly educated immigrants bearing the brunt of cooling labour market conditions, according to a new Statistics Canada report released Thursday.
The study found that the proportion of youth aged 15 to 29 who are not in employment, education or training (NEET) rose to 11.3% in the 2023/2024 academic year, higher than pre-pandemic levels.
Young adults in their 20s were most affected by the trend, with the NEET rate increasing by 1.8 percentage points for those aged 25 to 29 and one percentage point for those aged 20 to 24 compared to the previous year.
The increase has disproportionately impacted racialized groups, particularly Black and Chinese youth. The NEET rate for Black youth jumped 3.9 percentage points to reach 19.8%, while Chinese youth saw a 3.8 percentage point increase to 14.3%.
In contrast, non-racialized, non-Indigenous youth experienced a smaller increase of 0.9 percentage points, with a NEET rate of 12.8%.
Education gap reveals troubling trend
Gender differences emerged in how young adults are responding to these challenges. As employment opportunities contracted, young women without bachelor’s degrees increased their school attendance by 2.2 percentage points, helping stabilize their NEET rate at 15.2%.
Young men, however, did not significantly increase their school enrollment when faced with similar employment challenges. Instead, their NEET rate rose by 1.3 percentage points to 15.1%, driven largely by falling labour force participation.
This finding aligns with established patterns showing young women are more likely to pursue and complete postsecondary education compared to young men.
Immigrants with degrees struggle most
Perhaps most concerning is the sharp rise in NEET rates among immigrants with higher education. Immigrants holding a bachelor’s degree or higher saw their NEET rate jump 3.5 percentage points to 14.1%.
This increase occurred regardless of when they immigrated to Canada or where they received their education.
Meanwhile, Canadian-born youth with bachelor’s degrees maintained a relatively stable NEET rate of 6.8% with no significant changes in their employment situation over the past year.
These patterns suggest highly educated immigrants are facing unique challenges in transitioning from school to work that aligns with their skill level.
Labour market cooling hits youth hardest
The StatCan report attributes these trends to cooling labour market conditions, which have disproportionately affected young workers. For youth aged 15 to 29, the employment rate declined by 2.7 percentage points from March 2023 to March 2024, while their unemployment rate increased by 2.9 percentage points to 10.9%.
By comparison, the employment rate for those aged 30 to 54 years remained steady at 84.6% in March 2024.
The findings “highlight the complex interplay of factors influencing youth employment and NEET rates” and “underscore the importance of considering individual characteristics such as age, education level, immigrant status and racialization in understanding these trends and developing effective policy responses,” according to the report.
