Introduction: Youth aged 15-29 who are not engaged in education, employment, or training (NEET) represent a critical concern within the European Union (EU). Aim: This review aims to ascertain whether existing studies address the impact of living in either rural or urban settings, or in specific types of neighborhoods, on the likelihood of young European individuals falling into NEET status. Methods: On February 21, 2023, and subsequently updated on January 15, 2024, a thorough literature search was carried out across four major databases to compile relevant studies. Results: From an initial pool of 33,314 articles, 11 studies were deemed relevant for this review involving over 786,399 participants. The analysis revealed that residing in disadvantaged neighborhoods, characterized by significant crime rates and unemployment levels surpassing national averages, correlates strongly with an increased incidence of NEET status among youth. Notably, impoverished areas with a high presence of visible minorities were associated with higher rates of school dropout or unemployment. Furthermore, the conditions of the local labor market were found to notably affect dropout rates from secondary schools, especially in urban centers. Whereas rural areas exhibited elevated unemployment rates among the youth. Conclusions: This review underscores the need for targeted policies that address geographical disparities in NEET status by tailoring interventions to urban, rural, and neighborhood-specific contexts. Policymakers should focus on localized support programs and integrate geographical factors into strategic planning to ensure equitable opportunities for all youth.