# **1. Introduction**

This paper empirically analyzes decisions by Mexican youth regarding whether or not to attend school and participate in the labor market, as well as the factors driving these choices. In Latin America, the prevalence of youth “neither in work nor in school” (Ninis) has increasingly attracted the attention of policy makers and the general public (see, for example, Cardenas, De Hoyos, and Székely, 2015; Bassi, Busso, Urzúa, and Vargas, 2012).<sup>1</sup> Analyzing the phenomenon is important for public policy as it is perceived to be associated with other social problems in the region, such as shortfalls in the quality and relevance of education, which may lead to early dropout from school, increased youth unemployment, and heightened propensity for crime, violence, insecurity, and political instability (Bárcena, López, Hopenhayn, and Frishman, 2008; Grogger, 1997; and Jacob and Lefgren, 2003).<sup>2</sup> Other socioeconomic factors such as teenage pregnancy are also commonly associated with the number of Ninis, with the region exhibiting the second highest adolescent fertility rate in the world (69 births per 1,000 women 15-19) after Sub-Saharan Africa (World Development Indicators, 2014).

According to the most recent estimates, almost one in five youth between the ages of 15 and 24 in Latin America are Ninis, accounting for approximately 18 million individuals (De Hoyos, Popova, and Rogers, 2014). Of all youth aged 15 to 24 in 2010, 34 percent were only studying, 33 percent were only working, 12 percent were both studying and working, and 19 percent were Ninis.<sup>3,4</sup> During the last two decades, the percentage of Ninis in the region has gradually declined (although the absolute number has increased), although there has been substantial heterogeneity in trends within this group (De Hoyos et al., 2014; Cardenas et al., 2015). The percentage of Ninis in the region declined from 23.4 percent to 19.6 percent (mainly driven by the decline in female Ninis), while the number increased from 16.4 million to 18.2 million between 1992 and 2010. Results for the region are heterogeneous across countries and by gender. Nini levels and trends have varied greatly at the country level, with some countries such as Peru and Venezuela showing sharp declines in the proportion of Ninis. Moreover, Ninis

> 1 In this paper, “neither in work nor in school” (Ninis) are those who are not working in the labor market nor part of the formal education system at the time of the survey.

> 2 Latin Americans identify crime, violence and unemployment as the main concerns for the region (Lagos and Dammert, 2012), which records the highest homicide rates in the world with an average rate of 24.7 homicides per 100,000 people (Chioda, 2013).

> 3 The analysis in De Hoyos, Popova, and Rogers (2014) draws on data from 238 household surveys compiled and harmonized in the Socio-Economic Database for Latin America and the Caribbean (SEDLAC), augmented by 24 new country-year surveys added for their study.

> 4 This contrasts with an average of 12.9 percent (roughly 7.5 million individuals) of Ninis found among the same demographic in the EU27 in 2011 (Eurofund, 2012).

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