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Comment by Lucasoato | Hacker News Reader

What kind of economic policies could push an European conservative country to this Nordic approach, in order to lower the share of NEETs?

Interesting article btw

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In Finland, it's a combination of two things. First, there's near-free education. Second, an under 25yo person is not eligible for unemployment benefit until they have completed a vocational/college/university degree or are participating in a training program.

Whether that actually works to useful effect, or just cleans up the NEET statistic, is up for debate.

Also in Finland, its really common to see people still in university in their late 20's, so that will really drive down the "Neet 15-29" figure. This is because people start later (partially due to military conscription) and because most people go for a master's degree rather than stopping at a bachelor's degree. Compare this to the USA where its standard to be done around age 22. It would be nice to see comparisons between countries for NEET 30+ to see if the differences remain.

A couple of additions on why people graduate from uni so late here.

First, it often takes multiple attempts to get into one. The most popular programs have admission rates of around 10%, but since "it defines the rest of your life", why not try at least once? Then the next year, or year after that, if you're still not in, you can try something more realistic.

Second, (my experience, 15 years ago, your mileage may vary), the whole thing is just inefficiently organized. Where I went, there was 4 six week lecture periods per year, each followed by a week or two of exams. Many courses would have mandatory coursework you can only do during the lecture periods. In the end you're left with 28 weeks of crunch time per year, and the remaining 24 weeks to just fill with whatever.

Most choose to work that almost half an year, some lucky ones actually find something from their own field, though the odds go up as you're getting more years in. Then at some point you find the job more satisfying (because it's nice to actually get paid) than completing your MSc, which you then finally scrape together before having children at 30-something (if even then; I know I didn't).

On topic: I think most people on this trajectory wouldn't settle in the NEET column anyway, at least for extended periods of time.

One policy that stands out, and makes a lot of intuitive sense is free higher education, and welfare spending targeted towards students.

That's what we do in Sweden, and it seems to work well

It's effectively a partial age-limited UBI.

You get a subsidy when you're younger. You can use it to educate and train yourself, and/or to experiment with different options. This creates an educated population (good) and the more entrepreneurial types can start businesses without worrying too much about bankruptcy.

But permanent studenthood is only a good thing for people with academic talent. So it makes sense to reduce subsidies for the capable as they get older, leaving hardcore welfare support for those can't cope (for various reasons).

This kind of mixed approach removes some of the inflationary pressure of full-fat UBI but provides the same social benefits.

The argument against free higher education is that everyone is subsidising the educated half of society, who will likely be earning more. The poor will be subsidising the middle classes.

The UK system is interesting in that you can take out student loans to pay for your education, but you only have to pay it back once you earn a certain amount. If you end up being in a low wage job all your life you never need to pay it back (and you should have probably studied something different).

Except, of course, the middle classes are the ones who're paying most of the taxes in the first place, so they're hardly being subsidised by a lower earner who pays very little tax.

Also, there is no "UK system" for education. There is an England & Wales system, a Scottish system and a Northern Irish system. They're each managed differently.

On the contrary, this enables poor people to go to university and stop being poor. As another person noted, where the money is coming from is a separate issue, namely your tax policies.

In Sweden the more you earn, the higher percentage of your wages goes to taxes, so at least here it's subsidised by the upper and middle classes more than the lower classes(under a certain wage there is no tax at all, though I can't recall the number right now)

In what way does the British system I describe stop poor people going to university?

I was mostly answering the first half of your comment, about the poor subsidising the middle class.

The UK system is fine, I think subsidies are better, as poor people might feel discouraged to take on more debt, and student debt isn't really desirable for anyone. I don't think people should be in debt by default, neither do I think they should be uneducated by default.

That said in Sweden we actually have a combined system of subsidies and special student loans that very much resemble the UK system you describe.

I was replying to your first sentence

> On the contrary, this enables poor people to go to university and stop being poor.

But don't you have a bunch of non-STEM graduates working as baristas like in USA?

Probably, does it matter? Most people who do that do it because it seems fun, and then move on once they realize working for tips isn't ideal.

But that's besides the point. The point is the populace is on average better educated, leading to, on average, higher salaries.

Poverty in Sweden is ridiculously low, mostly because of this. (The welfare system helps too).

And yes we export a lot of educated people to other countries, real experts who decide to live abroad, and therefore don't pay taxes on Sweden. That's fine too, being educated shouldn't come at the cost of your freedom.

The poor will only be subsidising the middle class if they pay a more taxes than the rest of socierty.

Given that the lowest 20% of incomes in denmark only pays 2,5% of the income taxes I think its hard to say they are paying for other people. (Ref https://www.berlingske.dk/privatoekonomi/se-hvem-der-betaler...)

It also makes education more easy to access as you dont have any risks in taking out loans.

2.5% of all taxes, but what is their effective tax rate? And it doesn’t matter how much they pay, if they pay and students don’t they are subsidizing them.

But students pay, if you get a higher paying job because of your education you will end up paying more taxes. The danish marginal tax rate of 56% is not hard to hit with a STEM degree.

And why are you assuming that its the middle class that gets most out of this?

The fact that you get free education with a stipend makes it very low risk for people from a poor background to try it out. If they had to take on dept it makes it riskier if you dont complete or dont end up with a high paying job. Its not like UK dept is forgiven if you dont get a high paying job.

That may all be true, but students are being subsidized by low income workers still.

Seems unfair.

But why is education different from all the other welfare goods that the state provides?

It doesn't make education more difficult to access, jut expects you to pay if it benefits you later in life.

But you have a large dept burden that keeps growing with interest if you dont find a high paying job.

From what i remember the interest rate is pegged to the rate of inflation, which is usually artificially lowered by the way it is measured (housing costs are not included, make up a large portion of most peoples expenses and are most definitely subject to inflation). Interest was never something that concerned me with a student loan.

But it probably would if you could not pay it off for a long time.

ending the US occupation and US interests in Europe, and creating functional European financial markets.

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