The country where youth joblessness is below 5%
What can Britain learn from the Netherlands? And why are UK ministers divided on minimum wage?
A shock government-backed report this week warned of the danger of a “lost generation” of young people in Britain, as the number of 16- to 24-year-olds not in education, employment or training (Neets) rose to more than 1 million.
According to official UK statistics, roughly 13.5% of young people are not in work or college. Among 18- to 24-year-olds the share rises to 15.8% – nearly one in six.
In the Netherlands, the equivalent figure has been below 5% for well over a decade. Last year, according to Eurostat, the Dutch rate was 5.3%.
If Britain could match the Dutch Neet rate, the Resolution Foundation concluded in a recent report, “600,000 more 18- to 24-year-olds would be learning or earning today”.
The UK may not be able to copy directly from the Netherlands, said Alan Milburn, who wrote the review: traditions, cultures, structures are different. “But boy oh boy,” he added, “is there something to learn.”
Recent thinktank studies suggest the Netherlands’ Neet rate – the lowest in the EU and OECD – is the result of decades-long policymaking.
The Dutch approach has three pillars: vocational education; a welfare safety net prioritising engagement and rehabilitation; and financial incentives for businesses to hire young workers.
Educational retention is critical, researchers say. In the UK in 2024, 43% of 18- to 24-year-olds were in education, against 67% in the Netherlands. Among 18-year-olds, the figures are 66% and 80%; by age 24, twice as many young people are in education in the Netherlands (43%) as in the UK (21%).
But beyond that, the type of education matters possibly more. Technical education is highly valued in the Netherlands: vocational secondary education (MBO) is the main supplier to the labour market and often called “the foundation of the economy”.
Nearly 70% of Dutch 16- to 19-yearolds in upper secondary education attend an MBO school, with 35% of all under-25s studying at technical or professional universities later. In the UK, just 22% of 18- to 21 year-olds were on vocational courses in 2024.
Robbert Dijkgraaf, a former Dutch education minister and professor at the University of Amsterdam, said vocational education was essential. “Vocational education is not only there as a vessel for people to prepare them for society, for work: it’s often also a lifeboat,” he said, adding that the Dutch system combining four days of work with one day of vocational training was crucial.
Dutch vocational education is always combined with work-based learning or apprenticeships: by age 19, more than half of young Dutch people have workplace experience. In the UK, the figure is 17%.
The second big driver of the low Neet rate in the Netherlands is its welfare state, researchers say, with the Work and Social Assistance Act 2004 radically devolving welfare and social assistance programmes to municipalities.
The impact is particularly apparent in issues such as mental health and long-term illness, the Resolution Foundation notes. Like their UK counterparts, Dutch young people report some of the highest depression and anxiety rates in Europe. But that has not translated into poor participation outcomes.
In the UK, researchers say, young people claiming incapacity benefits can be left without real institutional contact or work-related expectations for years; in the Netherlands, local councils offer tailor-made engagement programmes with psychological help, subsidised employment and specialised training.
Finally, the Dutch system recognises that a low Neet rate requires willing employers. While UK employers complain that entry-level workers are too expensive, the Netherlands has long used fiscal policy to in effect subsidise youth employment.
The Youth Futures Foundation highlights government schemes that have cut payroll taxes and given direct financial advantages to businesses taking on young workers.
The “premium subsidy for young workers”, for example, was worth €3,500 (£3,000) a year to employers hiring a young person on a contract of at least 32 hours a week. Its successor, the “labour cost advantage”, cuts wage costs through tax benefits of up to €6,000.
Researchers say the lessons from the Netherlands are that a low Neet rate will not be achieved through piecemeal measures or temporary grants, but requires a core alignment of education system, welfare provision and business incentives.
“What is it fundamentally about?” Milburn said, presenting his report. “They make a priority of vocational education and investment in it. The Dutch system is much more integrated, they pull together.”