Vietnam’s Youth Unemployment Crisis: 1.4 Million NEETs Highlight Growing Labor Market Challenges

A Growing Concern for Vietnam’s Future

Vietnam is confronting a significant challenge with its youth population as approximately 1.4 million young people aged 15-24 were neither employed, in education, nor in training (NEET) during the fourth quarter of 2025. This figure represents 10.2 percent of the country’s total youth population, according to the General Statistics Office under the Vietnamese Ministry of Finance. The statistics highlight the difficulties young Vietnamese face in finding meaningful employment opportunities, revealing a growing disconnect between education systems and labor market demands.

The situation presents a paradox for Vietnam, which continues to experience economic growth while simultaneously struggling to integrate its young population into productive work. This demographic challenge comes at a critical juncture as the country also faces population aging, creating what experts describe as a potential “double burden” of worker shortages and increased social security pressures in the future.

The General Statistics Office has emphasized the need for earlier career guidance and clearer education and vocational pathways. Additionally, the agency calls for stronger linkages between schools and businesses to better align training programs with actual labor market demand. Without immediate intervention, Vietnam risks missing a crucial window of opportunity to leverage its young workforce before demographic shifts fundamentally alter the country’s labor landscape.

Understanding the NEET Phenomenon

NEET stands for “Not in Employment, Education, or Training” and refers to the share of young people who are not engaged in any form of employment, formal education, or training activities. This indicator includes individuals who are unemployed or economically inactive and not participating in education or training programs. According to the OECD and ILO definitions, education covers part-time or full-time formal programs, while employment includes anyone who has worked at least one hour for pay during the reference week or was temporarily absent from a job.

This metric serves as a crucial barometer for youth inclusion and represents a significant challenge for policymakers worldwide. When young people remain disconnected from both work and learning opportunities for extended periods, they face increased risks of long-term unemployment, lower lifetime earnings, and social exclusion. The NEET rate is expressed as a percentage of the population within a selected age group, making it a standardized measure for international comparisons.

What makes the NEET situation particularly concerning is that it encompasses not just those actively seeking work but also young people who may have become discouraged and dropped out of the labor market entirely. This hidden unemployment often masks deeper structural issues in education systems, labor markets, and social policies. Understanding the specific characteristics and circumstances of NEET youth is essential for designing effective interventions that can successfully reconnect them with education or employment pathways.

Addressing NEET requires a comprehensive approach that goes beyond simple job creation. It involves examining educational quality, labor market information systems, career guidance mechanisms, and social protection frameworks. Many experts argue that NEET represents not just an economic challenge but a social one, as prolonged detachment from education and work can have lasting psychological effects on young people’s confidence, motivation, and social integration.

Vietnam’s Youth Employment Crisis in Detail

The most recent data from Vietnam paints a concerning picture of youth disengagement from productive activities. In the first quarter of 2025, the number of NEET youth reached 1.35 million, representing 10.4 percent of the youth population. While this figure decreased by 66,900 compared to the same period in 2024, it increased by 84,400 from the previous quarter, suggesting volatility in youth employment patterns rather than sustained improvement.

The youth unemployment rate for those aged 15-24 stood at 7.93 percent in early 2025, which Vietnamese Labor Minister Dao Ngoc Dung described as an “acceptable figure” when compared to regional averages. The Southeast Asian average unemployment rate hovers around 9.5 percent, attributed to slow global economic growth and various instabilities affecting production and business operations. However, these overall rates mask significant disparities within the youth population.

Minister Dao Ngoc Dung emphasized that Vietnam’s unemployment rate is “within acceptable limits,” noting that the youth unemployment rate specifically is at 7.92%. He compared this figure to the broader regional context, where the unemployment rate in Southeast Asia averages around 9.5%.

Beyond unemployment statistics, the more comprehensive measure of labor underutilization reveals deeper challenges. By the fourth quarter of 2025, Vietnam recorded 2.14 million people, equivalent to 4 percent of the workforce, who were underutilized. This group includes the unemployed, underemployed, and those outside the labor force but willing to work. The underutilization rate reached 4.1 percent in rural areas and 3.8 percent in urban areas, indicating that workforce challenges extend beyond cities to affect agricultural and rural communities as well.

The General Statistics Office noted that under normal economic conditions, an underutilized workforce always exists and often increases when the economy experiences major shocks. This rate increased sharply from the first quarter of 2020, peaked in the third quarter of 2021, then gradually decreased to fluctuate around 4 percent. While the overall labor market in the fourth quarter of 2025 remained basically stable, officials noted concerning signs with a slight increase in the number of underemployed people, reaching approximately 784,000 individuals.

Disparities Across Gender and Geography

The NEET crisis in Vietnam does not affect all young people equally. Significant disparities exist between rural and urban areas, as well as between genders. In rural areas, the NEET rate reaches 11.7 percent, substantially higher than the 8.2 percent observed in urban centers. This rural-urban divide reflects the ongoing transformation of Vietnam’s economy, where traditional agricultural employment has declined faster than new rural opportunities have emerged, pushing young people toward cities where they may lack the skills or social networks needed to secure employment.

Gender disparities present another dimension of the challenge. Young women account for a higher proportion of NEET status at 12 percent compared to 8.3 percent for young men. This gender gap reflects persistent social norms, unequal access to education and training opportunities, and differing expectations regarding family responsibilities. Women in Vietnam face particular challenges in balancing traditional roles with labor market participation, especially in rural areas where agricultural work is increasingly mechanized and service sector jobs remain concentrated in urban centers.

The urban-rural and gender gaps intersect to create specific vulnerabilities. Young women in rural areas face the highest barriers to education and employment, often encountering limited local opportunities combined with social restrictions on mobility. These overlapping disadvantages require targeted policy responses that address the specific circumstances of different demographic groups rather than one-size-fits-all approaches.

According to Vietnam’s official government portal, the proportion of young people lacking basic necessities follows similar patterns, with higher rates in rural areas than urban areas, and higher rates among young women compared to young men. These disparities highlight the need for interventions that are geographically targeted and gender-sensitive to effectively reach those most at risk of permanent disconnection from education and employment pathways.

Regional and Global Context

Vietnam’s youth unemployment challenges exist within a broader global context of labor market difficulties for young people. The International Labour Organization (ILO) estimates that global youth unemployment is projected to rise to 12.4 percent in 2025, translating to around 260 million young people classified as NEET. In low-income countries, the rate is projected to reach nearly 28 percent, demonstrating the severity of the challenge in less developed economies.

The Asia-Pacific region faces particularly acute challenges, with 157 million young people classified as NEET in 2023, an increase from 145 million in 2019. This represents approximately one in every five young people in the region not engaged in education, employment, or training. Despite Vietnam’s concerning statistics, its NEET rate of approximately 10-10.4 percent positions it better than several regional neighbors, though this offers little comfort to those directly affected.

Regional comparisons reveal varying levels of youth disengagement across Southeast Asia. Thailand reports NEET rates between 12.8 and 15 percent, while Indonesia faces rates of 17-18 percent, placing it among Southeast Asian nations with the highest NEET rates. The Philippines also grapples with NEET rates of 12-13 percent, mainly concentrated among young people in poor urban areas. China’s NEET rate fluctuates around 15-17 percent according to ILO data, higher than Vietnam but lower than the global average.

The ILO’s Employment and Social Trends 2026 report forecasts that the global unemployment rate would remain at 4.9 percent, equivalent to about 186 million unemployed people. However, these aggregate figures mask regional variations and specific challenges facing youth populations. Employment growth projections for 2026 vary dramatically by income level, at 0.5 percent in upper-middle-income countries, 1.8 percent in lower-middle-income economies, and 3.1 percent in low-income countries.

Root Causes of Vietnam’s Youth Employment Challenge

Multiple interrelated factors contribute to Vietnam’s high NEET rate. The education system’s misalignment with labor market demands stands as a primary concern. Many young people graduate without the specific skills that employers seek, creating a paradox where vacancies remain unfilled while educated young people struggle to find work. The undervaluation of vocational education exacerbates this problem, as prestige-oriented academic pathways fail to connect with technical occupations facing labor shortages.

Digital transformation and artificial intelligence have begun reshaping Vietnam’s labor market, replacing some traditional entry-level roles while creating demand for new skills sets. Young people without digital literacy or specialized technical training find themselves particularly vulnerable to these shifts. Minister Dung noted that employers are increasingly prioritizing experienced workers capable of multitasking to save costs, making it harder for young workers to adapt and leaving them vulnerable to job cuts.

Behavioral and social factors also play significant roles. Reports indicate that parental indulgence, reliance on online escapism, and cycles of debt from informal loans contribute to youth disengagement. Some young workers prefer stable, long-term positions over short-term, higher-paying jobs, leading to temporary unemployment while they wait for ideal opportunities that may not materialize quickly enough to prevent skill atrophy.

The lingering effects of the COVID-19 pandemic continue to disrupt normal transitions from education to work. Educational institutions and employers adapted differently to pandemic conditions, creating gaps in learning and work experience that disproportionately affected young people. The pandemic accelerated digital transformation and changed business models in ways that disconnected traditional educational pathways from emerging employment opportunities.

Vietnam faces a unique demographic challenge as it simultaneously experiences population aging while maintaining a substantial youth population. The ILO notes a paradox in labor markets, with developed economies grappling with population ageing and sluggish labor force growth, while low-income countries struggle to turn rapid population growth into productive employment. Vietnam sits at the intersection of these two challenges, with shrinking youth cohorts in some regions coexisting with high youth unemployment in others.

Government Response and Policy Initiatives

Vietnamese authorities have acknowledged the severity of the youth employment challenge and have begun implementing various policy responses. Minister Dung outlined several measures aimed at improving youth employment, including flexible training programs to develop skills that match market needs and incentives for youth-led small and medium enterprises (SMEs) to foster innovation and job creation.

The government emphasizes the importance of entrepreneurship support policies, including financial assistance, management training, and tax incentives to facilitate job creation. Regarding unemployment insurance, Minister Dung described it as a “safety net” to prevent prolonged unemployment among young people. Additionally, authorities have highlighted the need to create domestic employment opportunities and limit the recruitment of foreign workers for common labor roles.

Officials have called for the creation of a national database for NEET youth to enable better targeting of interventions. This database would help identify those most at risk and track the effectiveness of programs designed to reconnect them with education or employment. Flexible training programs that can adapt to rapidly changing labor market demands are seen as essential, along with a societal shift in valuing vocational education as a legitimate pathway to productive careers.

Expanded psychological support for disengaged youth has also been identified as a priority. The mental health aspects of long-term unemployment and disconnection from education cannot be overlooked, as discouraged young people may require counseling and confidence-building interventions alongside skills training and job placement assistance. Addressing the psychological barriers to engagement represents an important complement to more traditional labor market interventions.

The General Statistics Office has specifically recommended focusing on early career guidance, providing appropriate educational and vocational orientation based on individual abilities, and strengthening links between schools and businesses. These measures aim to prevent young people from becoming NEET in the first place by improving the alignment between their choices and available opportunities before they complete their formal education.

Economic Implications and Future Risks

The economic implications of Vietnam’s youth unemployment challenge extend beyond individual hardship to affect national development prospects. Failing to leverage the current young workforce as the demographic window of opportunity closes will lead to future challenges of aging demographics, poverty, and unsustainable social security burdens. The World Bank notes that jobs have been the most effective path out of poverty in East Asia and the Pacific, with growth in labor income from manufacturing and services accounting for nearly all of Vietnam’s poverty reduction between 2010 and 2020.

However, past achievements offer no guarantee for future success. The World Bank warns that export- and manufacturing-led growth, once a key driver of job creation in the region, is facing headwinds from automation and evolving global trade patterns. At the same time, technology is transforming the service sector with digitization and AI driving productivity across industries while opening up new opportunities for higher-value services and skill-intensive jobs. This transition requires substantial adaptation from both education systems and young workers.

The ILO estimates that nearly 300 million workers worldwide are living in extreme poverty, earning less than US$3 a day. Informal employment continues to expand and is expected to reach 2.1 billion workers by 2026, many of whom lack stable jobs, labor rights, and social security. In low-income countries, progress in improving job quality remains slow, leaving vulnerable workers further behind. Without effective intervention, young people in Vietnam risk joining this global population of working poor rather than benefiting from the country’s economic development.

Policy uncertainty in global trade and supply chain disruptions are putting pressure on wages, particularly in Europe and Asia, including Vietnam. Despite these challenges, trade continues to support the livelihoods of about 465 million workers worldwide, more than half of whom are in the Asia-Pacific region. Maintaining Vietnam’s competitiveness in this evolving trade environment while creating quality domestic employment opportunities represents a crucial balancing act for policymakers.

The World Bank projects that over the next decade, about 320 million people will reach working age across the East Asia and Pacific region, placing significant pressure on labor markets to generate jobs at scale. Yet, with economic growth slowing in many middle-income countries, job creation is projected to lag: at current trends, only about 110 million new jobs may be added. Young people will likely be hardest hit, as they face greater barriers to entry and lack the experience that employers increasingly demand.

The Path Forward for Vietnam’s Youth

Addressing Vietnam’s youth employment challenge requires coordinated action across multiple fronts. The ILO has urged governments and businesses to expand job opportunities for women and young people while pursuing policies to boost labor productivity, including investment in skills, education, infrastructure, and technology. The organization also called on countries to pay greater attention to risks stemming from public debt, artificial intelligence, and trade uncertainty.

The ILO’s Global Employment Trends for Youth report advocates for a “youth guarantee” approach, a comprehensive package of active labor market policies to ensure that all young people have access to education, training, or employment within a specific timeframe. This approach represents a fundamental shift from reactive to proactive strategies, aiming to prevent disconnection rather than merely addressing it after it occurs.

The ILO insists that “decent work is a ticket to a better future for young people. And a passport for social justice, inclusion and peace. The time to create the opportunities for a brighter future is now.” The organization emphasized that without equal opportunities to education and decent jobs, millions of young people are missing out on their chances for a better future.

Specific recommendations for Vietnam include strengthening coordination between education providers and employers to ensure curriculum relevance, expanding work-based learning opportunities, and improving career guidance services. Additionally, addressing regional disparities requires targeted investments in rural economic development and improved connectivity between rural education systems and urban labor markets.

Creating an enabling environment for youth entrepreneurship represents another crucial strategy. Young people often face disproportionate barriers to starting businesses, including lack of collateral, limited business networks, and regulatory burdens. Simplified business registration procedures, access to credit, and mentorship programs can help overcome these obstacles while fostering job creation through new enterprises.

Looking ahead, Vietnam must navigate a complex demographic transition. Countries with aging populations, such as Vietnam, must simultaneously adapt their labor markets and social protection systems to a rapidly shrinking working-age population. Every year, 34 million people will turn 65 across the East Asia and Pacific region, creating both challenges and opportunities. While a declining workforce can slow economic growth, proper preparation and investment in human capital can help Vietnam successfully manage this transition while ensuring its young population does not become a lost generation.

Key Points

• Approximately 1.4 million Vietnamese youth aged 15-24 were classified as NEET in Q4 2025, representing 10.2% of the youth population
• The NEET rate is significantly higher in rural areas (11.7%) compared to urban areas (8.2%)
• Young women face higher rates of disconnection at 12% compared to 8.3% for young men
• Globally, 260 million young people are classified as NEET, with rates projected to reach 28% in low-income countries
• The Asia-Pacific region has 157 million NEET youth, representing one in five young people
• Vietnam’s NEET rate (10-10.4%) is lower than regional neighbors like Indonesia (17-18%) and Thailand (12.8-15%)
• Key causes include skills mismatch, digital transformation replacing traditional jobs, and rural-urban disparities
• Government responses include flexible training programs, youth entrepreneurship incentives, and a proposed national NEET database
• The World Bank projects only 110 million new jobs for 320 million new working-age entrants in East Asia and Pacific over the next decade
• ILO recommends a “youth guarantee” approach ensuring all young people have access to education, training, or employment within a specific timeframe