Ministers want to cut the number of Neets aged 16 to 18 to 7.6% in 2010
Young people in England should not receive state benefits unless they are working, training or in education, a committee of MPs says.
MPs are suggesting adopting a system use in Holland reduce the number of 16 to 25-year-olds not in education, employment or training, known as Neets.
They said the Dutch equivalent of jobseeker's allowance was dependent on being in work, education or training.
At the end of 2009, nearly 15% of 16 to 24-year-olds were classed as Neets.
And 9.3% of the youngsters classified as Neet at the end of 2009 were aged 16 to 18.
And the government looks set to miss its target to reduce that figure to an average of 7.6% for a whole of 2010.
Indeed, little progress has been made in reducing the number of Neets over the years - in 1995, 9.2% of 16 to 18-year-olds were in this category and at the end of 2008, 10.3% were classified as Neets.
Publishing a report on Neets, the cross-party Children, Schools and Families Committee said "radical change" was needed if the number of these young people was to be reduced.
The committee of MPs had visited the Netherlands to assess why it had consistently low rates of youth unemployment.
The MPs said a combination of support up to the age of 27 and a "holistic approach" to this age group, where young people had access to careers, health or housing advice in a "one-stop shop" format, was highly effective.
The report said: "It is crucial that young people, particularly those who are most disadvantaged, should not be deterred by the benefits system from accessing opportunities in education and training.
"We urge the government to give consideration to the approach taken in the Netherlands, in which relatively generous levels of benefits and other support are offered to young people in exchange for greater compulsion to take up education, training or work."
Committee chair Barry Sheerman said: "It seems to me that the worst thing that can happen to any young person is to be on benefits, at home, doing nothing, festering at home with nothing to do.
"The best thing you can do is to try and ensure that they are doing something, whether it's training, learning a language, a trade."
Mr Sheerman said reducing the numbers of young people falling through the gap would be a key challenge for the next government.
"It is time to take a more radical approach and to look at the example of the Netherlands, where rates of youth unemployment are consistently low and where young people up to the age of 27 have a more unified support structure."
The MPs also raised concerns about the term Neets, saying it was a negative term that risked "stigmatising the young people to whom it is applied".
They said it was a "residual statistical category" that encompassed a wide range of young people with very different needs.