Northern Ireland does well at keeping young people in education and training at 16 and 17, but the unemployment rate has more than doubled by the time they reach 20, says new research.
Dr Farren said more needed to be done to help young people find suitable jobs or training. And he confirmed that the Training and Employment Agency's nine training centres would come into the further education sector in September, merging with neighbouring colleges.
A government review found "undue competition" between colleges and training centres, for students and funds, as well as duplication in their work.
The damaging effects of competition also emerged in the research, which was commissioned by the Training and Employment Agency and carried out by staff at the Northern Ireland Economic Research Centre and Ulster University.
Dr Farren said the mergers would offer a coherent approach to skills training, with training centres becoming integral to colleges.