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Youth and the Labor Force: Background and Trends

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Youth and the Labor Force: Background and Trends

May 7, 2015Updated August 20, 2018 (R42519)
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Summary

Congress has indicated a strong interest in ensuring that today's young people—those (ages 16 through 24—to 24) attain the education and employment experience necessary to make the transition to adulthood as skilled workers and taxpayers. In the wake of the December 2007-June 2009 recession, questions remain about the employment prospects of youth today and the possible effects on their future earnings and participation in the labor market.

  • Over the past several years, teens and young adults have experienced a precipitous decline in employment and a corresponding increase in unemployment. In 2000, their employment to population (E/P) ratio—a measure of employed individuals in the labor force—was about 60%. Their E/P ratio steadily eroded even when the economy grew in the mid-2000s. The December 2007-June 2009 recession resulted in record low employment (based on the E/P ratio) for this population.
  • Since the official end of the recession, younger workers have continued to fare relatively poorly in the labor market. In 2014, youth ages 16 through 24 had an E/P ratio of 47.6% and a rate of unemployment at 13.4%. This is compared to an E/P ratio of 76.7% and an unemployment rate of 5.2% for workers of prime working age, 25 through 54. Relatively low E/P ratios for young people are likely due to decreasing demand for labor generally and youth foregoing work for higher education. Youth may decide to pursue education because of dismal employment prospects and the growing need for more education to be successful in the labor market. Still, labor market trends have improved over the past few years for both teenagers and young adults.
  • Throughout the post-World War II period, the E/P ratio has been highest for white youth, followed by Hispanic youth. Black and Asian youth have been the least likely to be employed. Young black males in particular have had the lowest E/P ratios. For black youth, this is likely due to lower educational attainment. Lower rates of employment for Asian youth are likely attributable to their increasing participation in postsecondary education.
  • Beginning in the 1970s, the E/P ratios for women increased as they entered the workforce in greater numbers. The difference between males and females in the E/P ratio for teens and young adults began to narrow in the 1990s, likely due to greater high school and college attainment among females and other factors.
  • Lower E/P ratios—and simultaneous increases in unemployment—for young people appear to be due to a confluence of factors. Youth have less education and experience relative to older workers. In general, firms are more likely to hire workers with more experience and availability, which puts young workers at a disadvantage.
  • The consequences of decreasing E/P ratios and increasing unemployment among youth have not been fully explored. Preliminary research in this area has hypothesized that reductions in human capital, such as deterioration of skills and foregone work experience, may have lasting impacts on employability and wages of youth. Some studies show that on average, early youth unemployment has negative effects on incomes but not as strong effects on future unemployment; however, youth entering the labor market during severe downturns in the economy appear to have relatively lower wages in the longer term.


Youth and the Labor Force: Background and Trends

Introduction

This report provides current and historical employment and unemployment information about young people ages 16 through 24. It begins with a brief background on the December 2007-June 2009 recession and its lasting effects on youth currently in the labor force. It then discusses employment and education pathways that young people today can pursue. Following this section is a description of the labor market data used in the report, which includes labor force participation rate, employment-to-population (E/P) ratio, and the unemployment rate.1 The report goes on to discuss these data for the post-World War II period, with a focus on trends since 2000. This discussion compares rates based on age, sex, race/ethnicity, and income, where applicable. The report concludes by exploring the factors that influence the extent to which youth participate in the labor force and their prospects for employment. This last section also discusses the possible consequences of decreasing employment and increasing unemployment among youth. The Appendix includes supplemental tables and figures on the youth employment situation. The findings of the report are discussed in the summary.

Given the challenges that young people experience in the labor market, this report may be of interest to Congress in the context of workforce development, education, unemployment insurance, youth policy, or macroeconomic policy; however, the report does not discuss specific programs or policy implications.2

Background

Although the recession that began in December 2007 officially ended 18 months later, in June 2009, many workers were still struggling to find work, and some continue to do so today. Unemployment since the recession has been as high as 9%. The recession exacerbated challenges that workers have faced in securing and retaining employment over the past decade, when the U.S. economy had the slowest job growth since 1940.3 Coined "The Lost Decade" by some economists, 2000 through 2010 saw no net gains in jobs.4 Against this backdrop, young people ages 16 through 24 have experienced the steepest decreases in employment, though in recent years employment levels have steadily increased for this age group.

Declines in the share of young people working and labor force participation may be due, in part, to overall weak demand for workers and growing enrollment in high school and postsecondary education.5 As discussed throughout this report, education is a protective factor for young workers: greater educational attainment is associated with higher wages and lower unemployment.6 Nonetheless, recent college graduates have faced weakened employment prospects in the wake of the 2007-2009 recession. Calling youth coming of age during the recessionary years "Generation Limbo" or "The Lost Generation," media reports chronicled recent college graduates who were unable to start their careers and instead are relying on their parents or public benefits to get by.7 An analysis by the Federal Reserve in 2014 examined unemployment from 1990 through the first part of 2013 for 22-to-27-year olds with at least a bachelor's degree. The analysis found that securing employment tended to be more difficult for those just out of school at any point over the period, and that the rate of college graduates in 2012 who were underemployed—working in an occupation that does not typically require a bachelor's degree—was comparable to rates during the 1990-1991 recession. Nonetheless, the analysis found that unlike their earlier counterparts, a greater share of young people graduating from college since the early 2000s were working in low-wage jobs (e.g., bartender, food server) as opposed to other non-college jobs with higher wages (e.g., electrician, hygienist).8

Despite an overall negative picture of youth labor force participation, the major indicators of their participation—employment/population ratio and unemployment rate—have shown improvements over the past few years.

Education and Employment Pathways for Young People

For the purposes of this report, youth refers to young people ages 16 through 24. Individuals as young as 16 are included because the Department of Labor's Bureau of Labor Statistics (BLS), which maintains official records of employment and unemployment, counts workers beginning at this age.9 Although traditional definitions of youth have considered adolescence to be a period ending at age 18, cultural and economic shifts have protracted the time for youth to transition to adulthood. Older youth, up to age 24, are included because they are often still in school and/or living with their parents.10 The current move from adolescence to adulthood has become longer and more complex, and policymakers and others are recognizing that adolescence is no longer a finite period that ends at the age of majority.11

Young people ages 16 through 24 may pursue a variety of education and employment pathways. Those of high school age may attend high school and/or work. Youth with a high school diploma can attend a two- or four-year college, enlist in the armed services, or secure part-time or full-time employment. Youth sometimes work and attend school simultaneously. Young people who drop out of high school can do some of these same things, but their opportunities are more limited. They cannot enroll in a four-year college or, in most cases, enlist in the military. They may also face challenges securing employment.12

Even young people who are attending high school or an institution of higher education (or those on a break from school) may still want to work, or feel that they have to work, for a variety of reasons—to have spending cash, contribute to their household income, gain work experience, and save for the future, among other possibilities. In a nationally representative survey in 2005, nearly 7 out of 10 high school seniors reported that they expect work to be a central part of their lives, and almost 90% said they value a job that offers a reasonably predictable future.13 About 80% reported that they valued a job that is intrinsically rewarding because it is interesting to do, uses one's skills and abilities, and allows one to learn new things, among other factors. Nearly the same percentage of seniors valued work because of its extrinsic rewards, including that a job has high status and prestige that most people look up to and respect; allows for advancement and promotion; and provides one with a chance to earn a good deal of money.

Young people can more readily secure employment, especially employment that pays well, if they have some postsecondary education. As the level of education rises, the unemployment rate decreases and median weekly earnings increase for those who work. Among labor force participants without a high school diploma in 2014 the unemployment rate was 9%; this compares to an unemployment rate of 6.0% and 3.5% for those with a high school degree or a bachelor's degree, respectively (see Figure 7 for further detail).14 The Bureau of Labor Statistics (BLS) predicts that the fastest growing occupations between 2010 and 2022 will require some postsecondary education.15 Further, in all career clusters, a bachelor's degree or better offers accessibility to most high-paying jobs.16 As discussed later in the report, the growing need for education to secure employment is likely a major reason why some young people are foregoing work for school. Still, BLS predicts that the occupations with the largest numeric increases will not require workers to have postsecondary education.

Overview of Data on Youth Participation in the Labor Force

This section of the report describes data on participation in the labor force, including how it applies to youth. The data are generally reported by BLS that are based on a household survey conducted by the Census Bureau.17This report provides context for Congress on trends in the labor force for youth. It discusses youth labor force data since 1948, with a focus on the period from 2000 to the present.

The labor market experiences of youth ages 16 to 24 have varied based on their age and other factors. Over the post-World War II period, teens ages 16 to 19 generally have had a lower labor force participation rate and employment-population ratio than young adults ages 20 to 24. These two indicators for teens fluctuated from the 1950s through the 1990s, and then began a steady decline before stabilizing in recent years. The labor force participation rate and employment-population ratio for young adults was on an upward trajectory in most years following World War II. This was the result of increases in labor force participation and employment among young women. Both labor force measures declined for young adults in the 2000s. They have ticked back up in recent years, but remain below 2000 levels.

Beginning in the early 2000s, young people ages 16 to 24 began to experience a more pronounced decline in their labor force participation rate and employment, along with a corresponding increase in unemployment. In 2000, they had a participation rate of nearly 66%, an employment-population ratio of about 60%, and an unemployment rate of 9%. These measures eroded even as the economy grew in the mid-2000s, and then declined further immediately following the recession. Although the labor force situation improved for young people in recent years, their labor force participation rate (56%) and employment-population ratio (50%) in 2017 were lower than in 2000, and their rate of unemployment was about the same (9%).

Labor force indicators have trended differently for males and females ages 16 to 24. Beginning in the 1970s, the labor force participation rate and employment-population ratio for females increased as they entered the workforce in greater numbers.

Labor force trends have also been distinct across racial and ethnic groups. Generally, the labor force participation rate and employment-population ratio have been highest for white youth, followed by Hispanic youth. Black and Asian youth have been the least likely to participate in the labor market or to be employed. The 2017 employment-population ratios for youth ages 16 to 24, by race and ethnicity, were as follows: white, 57%; Hispanic, 53%; black, 52%; and Asian, 42%. Black youth have experienced labor force gains in recent years. Education and other factors likely play a role in these labor market outcomes.

Decreases in labor force participation and the employment-population ratios for young people appear to be due to a confluence of demand and supply factors. On the demand side, youth have less education and experience relative to older workers. Youth may also face increased competition for jobs that require less education. On the supply side, a growing number of young people are enrolled in school, particularly post-secondary education, and thus have competing demands on their time. Overall, firms are more likely to hire workers with greater experience and availability.

The changes in the labor market landscape for youth have not been fully explored. Research in this area has hypothesized that reductions in human capital, such as deterioration of skills and foregone work experience, may have lasting impacts on the employability and wages of youth.

Introduction

This report provides current and historical labor force information about young people ages 16 to 24. In general, youth have a lower rate of labor force participation, and those who are in the labor force are less likely to gain employment than older workers. Both labor supply and demand factors drive this pattern. On the labor supply side, young people are making greater investments in education by enrolling in and completing high school and college in greater numbers. They are less likely to be attached to the labor force due to their limited availability (e.g., only able to work full-time during the summer if they attend school) and their relatively weaker connections to employers. Labor demand also plays a role. Youth are less desirable in some ways than adult workers because they are less experienced; have fewer skills and education; and are potentially short-term hires, which can be costly to employers.

The report focuses on trends from 2000 to 2018. This period has included two recessions (March to November 2001 and December 2007 to June 2009) and a decline in jobs requiring only a high school diploma. Many workers were still struggling to find work in the years immediately following the more recent recession. The recession exacerbated challenges that workers have faced in securing and retaining employment since 2000.1 Against this backdrop, young people ages 16 to 24 experienced their steepest decreases in labor force participation and employment; however, in recent years employment levels have steadily been recovering.

Some studies have found that early labor market experiences and outcomes have lasting impacts on employability and wages. Given the current and future challenges that young people can experience in the labor market, this report may be of interest to Congress in the contexts of workforce development, education, unemployment insurance, youth policy, or macroeconomic policy; however, the report does not discuss specific programs or policy implications.

The report begins with a brief discussion of current employment and education pathways that young people can pursue. Following this is a description of the labor market data used in the report, which includes the labor force participation rate, employment-population ratio, and unemployment rate.2 The report then discusses these data for the post-World War II period, with a focus on trends since 2000, comparing labor force outcomes based on age, sex, and race/ethnicity. The report concludes by exploring the factors that influence the extent to which youth participate in the labor force and their prospects for employment. The last section also discusses the potential short- and long-term effects of young people's labor market experiences. The Appendix includes supplemental tables and figures on youth employment trends. Background

Declines in the shares of young people participating and working in the labor force is probably due, in part, to growing enrollment in high school and postsecondary education,3 which is likely a result of a growing need for higher levels of educational attainment to secure employment. The Department of Labor's (DOL's) Bureau of Labor Statistics (BLS), which measures labor market activity, predicts that the fastest growing occupations between 2016 and 2026 will require some postsecondary education.4

Education and Employment Pathways for Young People

For the purposes of this report, youth refers to young people ages 16 through 24. Individuals as young as 16 are included because BLS counts workers beginning at this age.5 Although traditional definitions of youth have considered adolescence to be a period ending at age 18, cultural and economic shifts have protracted the time for youth to transition to adulthood. The current move from adolescence to adulthood has become longer and more complex, and policymakers and others are recognizing that adolescence is no longer a finite period that ends at the age of majority.6 Older youth, up to age 24, are included because they are often still in school and/or living with their parents.7

Young people ages 16 through 24 may pursue a variety of education and employment pathways. Those of high school age may attend high school and/or work. Youth with a high school diploma can attend a two- or four-year college, enlist in the armed services, or secure part-time or full-time employment. Some youth work and attend school simultaneously, while others alternate between work and school (e.g., summer jobs).8 Young people who drop out of high school can do some of these same things, but their opportunities are more limited. They cannot enroll in a four-year college or, in most cases, enlist in the military. They may also face challenges securing employment.9

Even young people who are attending high school or an institution of higher education (or those on a break from school) may still want to work, or feel that they have to work, for a variety of reasons—to have spending cash, contribute to their household income, gain work experience, and save for the future, among other possibilities. A nationally representative survey in 2015 found that the majority (61%) of young adults ages 18 to 30 in the labor market are optimistic about future job opportunities. This optimism had increased since the previous survey in 2013 (45%). Further, the 2015 survey found that young adults have a strong preference for steady employment over higher pay, though this has declined somewhat since 2013 (62% in 2015 versus 67% in 2013 for steady employment; and 36% in 2015 versus 30% in 2013 for higher pay).10

Data on Youth Labor Force Participation and Outcomes This section describes data on participation in the labor force, including how it applies to youth. The data are reported by BLS based on a household survey conducted by the Census Bureau.11 This survey, known as the Current Population Survey (CPS), collects labor force and other data from a nationally representative sample of 60,000 households on a monthly basis. The survey includes households with civilian non-institutionalized individuals and excludes individuals residing in correctional facilities, residential nursing and mental health facilities, college dorms, military facilities, and other institutions. Employed and unemployed youth (beginning at age 16) and adults (no upper age limit) are counted by BLS as part of the labor force.

  • The labor force participation rate is the percentage of individuals in the population who are employed and who are unemployed (Labor Force Participation Rate = Employed Individuals/Labor ForceParticipation Rate = Employed + Unemployed Individuals/Civilian Population Age 16+).

BLS considers individuals to be employed if they work at all for pay or profit during the week that they are surveyed.1812 This includes all part-time and temporary work, as well as regular full-time, year-round employment. It does not include unpaid internships. Individuals are still counted as employed if they have a job at which they did not work during the survey week, even if they were not paid, because they were on vacation, experiencing child care problems, on maternity or paternity leave, or some other reason. Individuals are considered unemployed if they are jobless, actively looking for jobs, and available for work. Job search activities include sending out resumes or filling out applications, among certain other activities.

  • The employment to population (E/P) ratio,employment-population ratio is the proportion of individuals in the non-institutionalized U.S. population who are employed (Employment to Population Ratio = Employed Individuals/Civilian Non-institutionalized Population).
  • The unemployment rate is the share of individuals in the labor force who are unemployed (Unemployment Rate = Unemployed Individuals/Labor Force).19

13Labor marketforce participation by youth, as well as adults, ismeasures the extent to which individuals are engaged in or actively seeking work, and for this reason has been used as a proxy indicator of interest in working. Generally, increasing labor force participation indicates greater interest in working, while decreasing labor force participation indicates declining or noninterest in working. Changes in labor force participation rates, however, are not perfect indicators of individual or collective interest in workingpreference about work. For example, labor force participation may decline because individuals become discouraged about job prospects and give up looking for work. Individuals may also decide to pursue education instead because of the returns they will receive later when they are employed.

The E/Pof work to improve future job prospects. The employment-population ratio and the unemployment rate can help to gauge market conditions. A stable and high E/P ratio suggests that the economy is healthy, in that individuals are able to find employment.When the employment-population ratio rises, it means that a larger percentage of the working-age population is employed.14 The unemployment rate is also an indicator of whether individuals are able to be employed in the labor force. This rate should be interpreted with caution: changes in the unemployment rate can mask the extent to which individuals want to work. The unemployment rate may decline when firms are not hiring because individuals become discouraged and drop out of the labor market.

In addition to the official count of unemployment, the CPS includes the number of people who are not in the labor force. Some individuals out of the labor force indicate that they want a job. Those who want a job are marginally attached to the labor force if they searched for work during the past 12 months and were available to take a job but had not looked for work in the past four weeks. Marginally attached workers are considered discouraged if they did not look for work for one or more of the following reasons: they thought that no work was available, could not find work, lacked the requisite schooling or training, or faced age or other types of discrimination. Marginally attached workers may also be unable to work for such reasons as school or family responsibilities, ill health, and transportation, as well as other reasons for which nonparticipation could not be determined.

Recent Trends

Both the E/P ratio and the unemployment rate provide a snapshot of how well youth are faring in the labor market. Table 1 provides these and other relevant labor force data for individuals ages 16 and older and by age groups—youth ages 16 through 19 ("teens"), youth ages 20 through 24 ("young adults"), and other working age groups (through age 69) in 2014. The table shows that for workers generally, the labor force participation rate was 62.9% and the unemployment rate was 6.2%. In addition, 59.0% of individuals in the working population overall were employed. Though not shown in the table, these figures represent improvements from 2012, when the unemployment rate was 8.1% and the employment rate was 58.6%. The labor force participation rate was 63.7% in 2012. The drop in the unemployment rate appears to be due to increased employment that has outpaced growth in the labor force.20

Teens had the second lowest rate of labor force participation (34.0%), after the oldest workers; the lowest rate of employment (27.3%); and the highest rate of unemployment (19.6%). While young adults ages 20 to 24 participated at a high rate in the labor force (70.8%) and about 63.0% were working, they also experienced a relatively high rate of unemployment (11.2%). Individuals of prime working age (25 through 54) had the highest rates of labor force participation (80.9%) and employment (76.7%) and the lowest rate of unemployment (5.2%). Those ages 55 through 64 had a relatively average level of employment (61.4%) and the lowest rate of unemployment (4.3%) among the featured age groups. The oldest individuals in the table, those ages 65 through 69, had the lowest rate of labor force participation (31.6%), reflecting a high likelihood of retirement (and ability to receive Social Security benefits), and a relatively low unemployment rate (4.8%). Table 1 also displays the share of individuals not in the labor force who wanted a job. Overall, 6.9% of workers not in the labor force wanted a job compared to about 9.7% of teens and 15.2% of young adults.

Table 1. Labor Force Participation by Selected Age Groups, 2014

Numbers in thousands, not seasonally adjusted

Age Group

Civilian Non-institutionalized
Population

Labor Force Participation Rate

E/P Ratio

Unemployment Rate

Percentage Not in the Labor Force Who Want Job

16-24

38,712

55.0%

47.6%

13.4%

11.7%

16-19

16,633

34.0%

27.3%

19.6%

9.7%

20-24

22,079

70.8%

62.9%

11.2%

15.2%

25-54

124,511

80.9%

76.7%

5.2%

11.0%

55-64

39,764

64.1%

61.4%

4.3%

5.7%

65-69

15,130

31.6%

30.0%

4.8%

Not
available

All

247,947

62.9%

59.0%

6.2%

6.9%

Source: Congressional Research Service (CRS), based on published and unpublished data from the U.S. Department of Labor, Bureau of Labor Statistics (BLS), Current Population Survey (CPS).

Note: All workers means workers age 16 and older, including those over age 69. The can fall without a corresponding rise in employment if unemployed workers leave the labor force. Work Among Youth: Trends Over Time The figures and tables in this section and the Appendix display labor force data over the period following World War II (starting in 1948, when the data first became available) based on age, sex, and race/ethnicity.15 The figures also plot the 11 periods when the country was in recession.16 Table A-1, Table A-2, Figure A-1, and Figure A-2 in the Appendix show broader labor force trend data for teens and young adults, respectively, from 1948 through 2017. Age The labor market experiences of youth are different based on their age. Figure 1 charts the employment-population ratio from 1948 through 2017 for teens (ages 16 to 19), young adults (ages 20 to 24), and "prime-age" individuals (ages 25 to 54). Over that time, teens had the lowest employment-population ratios, followed by young adults. From the 1950s through the 1970s, the prime-age adults' and young adults' employment-population ratios moved in the same direction, declining in the 1950s and then increasing in the 1960s and 1970s. The difference in their employment-population ratios began to grow beyond that period, reaching nearly 13 percentage points in 2017. Figure 1 also illustrates the cyclical nature of the employment-population ratio, particularly for teens. The teen employment-population ratio had a greater decline soon after the start of a recession compared to the ratios for young adults and prime-age adults. Further, the employment-population ratio for young adults generally exhibited a more upward trajectory. This is due, in part, to young adult females entering the labor market in greater numbers starting in the 1960s. The employment-population ratios for both teens and young adults dipped from 2000 to 2010 (capturing the effects of two recessions), but more dramatically for teens (a 33% versus 9% decline). The indicators for both age groups began recovering following the 2007 to 2009 recession, with greater gains in the labor force participation rate and employment-population ratio for teens (see Table A-1 and Table A-2 in the Appendix). Figure A-1 and Figure A-2 show that the labor force participation rate trend lines for teens and young adults were generally parallel, and were higher than the employment-population ratio trend lines. The trend lines for the unemployment rates for both groups generally mirrored changes in the employment-population ratios.

The post-2000 declines in the employment-population ratios and labor force participation rates, particularly for teens, can likely be viewed as partially a consequence of a positive social trend—the increase in high school and college enrollment.17 In addition, as discussed later in the report, students are increasingly pursuing unpaid internships to meet high school graduation requirements and improve their prospects for attending college.18 So although they are gaining experience that will likely benefit them when they work, they are not included in the labor force. Nonetheless, these indicators do not necessarily reflect a tendency toward voluntary withdrawal from the workforce to complete schooling. Some young people may have dropped out of the labor market because of dimmed employment prospects in light of the need for more schooling to obtain a job.

Figure 1. Employment-Population Ratios by Select Age Groups, 1948-2017

Source: Congressional Research Service (CRS), based on data from the U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed. Shaded areas denote periods of recession.

Sex Figure 2 plots the employment-population ratios for female and male teens and young adults for 1948 through 2017, revealing different levels and patterns of change. For many years, the employment-population ratios for females were much lower than they were for their male counterparts. The difference in the employment-population ratios for males and females in both age groups began to narrow in the 1990s, but likely for different reasons. For teens, the male employment-population ratios started to drop while the female employment-population ratios began to rise, so that by 1996 the rates were nearly identical. This may be attributable to the changing employment prospects of individuals with lower levels of education, as discussed in a subsequent section. Young males ages 16 through 24 are somewhat less likely to be enrolled in high school or college than their female counterparts,19 and a smaller share of males ages 25 through 29 have obtained a college degree.20

With regard to young adults, females made significant inroads into the labor market. The employment-population ratios for young adult women generally began to trend upward in the 1960s through the 1980s. This corresponds with an upward trend in college completion among women,21 which likely influenced the extent to which they pursued and secured employment. In addition, other factors—lower fertility, declines in marriage rates, and increased likelihood of divorce—have played a role in women's increased participation in the labor force, among other factors that are not easy to quantify (e.g., shifts in expectations about roles based on sex).22 From approximately 2000 onward, the employment-population ratios for females and males became more similar; however, the employment-population ratios for young adult males have been higher in each year.

Figure 2.Employment-Population Ratios of Young People by Sex, 1948-2017

Source: Congressional Research Service (CRS), based on data from the U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed. Shaded areas denote periods of recession.

Race and Hispanic Ethnicity Figure 3 and Figure 4 compare the employment-population ratios of teens and young adults by race and Hispanic ethnicity from 1972 to 2017. The Congressional Research Service (CRS) applies Census definitions in this section, which divide race into black, white, or Asian and ethnic origin into Hispanic or non-Hispanic. People of Hispanic origin may be of any race. BLS began recording employment data for black individuals in 1972, for Hispanic individuals in 1994, and for Asian individuals in 2000. Both figures indicate that employment-population ratios were highest over time for white youth, followed by Hispanic youth. Black and Asian youth had similarly low employment-population ratios relative to their white and Hispanic counterparts. As shown in Figure 3, the employment trends for white, black, and Hispanic teens generally reflected the cyclical effects of the economy until the late 1990s. The employment-population ratios for all groups subsequently decreased in most years through 2012 (give or take a year, depending on the racial/ethnic group). The employment gap between white teens and black teens narrowed, from about 20 percentage points in 2000 to 10 percentage points in 2017, due primarily to decreases in the employment-population ratio for white teens. Figure 4 indicates that employment for white young adults steadily increased, even following most recessions, over the period examined. Hispanic and black young adults made inroads in the labor market since the most recent recession (2007-2009), such that Hispanic youth had similar employment-population ratios to white youth and the employment-population ratio for black young adults reached an all-time high of 61% in 2017 (similar, but still higher, to levels in the late 1990s). The employment-population ratio for Asian young adults has generally been in decline over time, and hovered near 50% during the most recent post-recession period.

Despite recent improvements in employment among minority youth, they have had lower employment-population ratios relative to white youth. These lower rates may be due, in part, to the reduced employment prospects of individuals with less education and other factors that are more difficult to measure, such as poverty and neighborhood characteristics (see discussion at the end of the report).

Black and Hispanic youth ages 16 to 24 are less likely to have completed high school and college (see Table A-3).23 Schooling may also explain the relatively low employment-population ratios for Asian youth, but for a different reason. Asian youth are delaying entry into the labor market and may be foregoing work for school while in the labor force. Asian youth have had the highest rates of college completion among any racial or ethnic group (and rates of high school completion that are comparable to that of white youth).24 The role of education for Hispanic youth is less clear. While their employment-population ratio has been closer to that of white youth in recent years, Hispanic youth had relatively lower rates of high school completion and slightly higher rates of college completion than white youth.

Figure 3.Employment-Population Ratio of Teens Ages 16-19by Race and Ethnicity, 1972-2017

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The Bureau of Labor Statistics began recording employment data for black individuals in 1972, for Hispanic individuals in 1994, and for Asian individuals in 2000. Persons of Hispanic origin can be of any race. Shaded areas denote periods of recession.

Figure 4.Employment-Population Ratio of Young Adults Ages 20-24by Race and Ethnicity, 1972-2017

Source: Congressional Research Service (CRS), based on data from the U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The Bureau of Labor Statistics began recording employment data for black individuals in 1972, for Hispanic individuals in 1994, and for Asian individuals in 2000. Persons of Hispanic origin can be of any race. Shaded areas denote periods of recession.

Trends Since 2000 Snapshot of Trends in 2017 Table 1 provides labor force data for individuals ages 16 and older by age groups—16 to 19 (teens), 20 to 24 (young adults), and older working-age groups—in 2017. The table shows that for these workers generally, the labor force participation rate was 62.9% and the unemployment rate was 4.4%. In addition, 60.1% of individuals in the working population overall were employed. Though not shown in the table, these figures represent improvements from 2014, which were included in the last update to this report.25

Except for the oldest workers, teens are less likely than other age groups to participate in the labor force. Teens that do participate are less likely than other groups to find work (i.e., they have higher unemployment). In 2017, teens had the second lowest rate of labor force participation, after the oldest workers (ages 65 to 69); the lowest employment-population ratio; and the highest rate of unemployment. While young adults participated at a high rate in the labor force and about two out of three were working, they also had a higher rate of unemployment relative to the overall unemployment rate. As discussed in a subsequent section, these trends are consistent with factors that influence labor force outcomes. In general, firms are more likely to hire workers with more experience and availability. Young people tend to have less experience and also may be less likely to be in the labor force because of their participation in school.

Table 1. Labor Force Participation by Selected Age Groups, 2017

Age Group

Civilian Non-institutionalizedPopulation(in thousands)

Labor Force Participation Rate

Employment-Population Ratio

Unemployment Rate

16-24

38,150

55.5%

50.3%

9.2%

16-19

16,754

35.2%

30.3%

14.0%

20-24

21,396

71.3%

66.0%

7.4%

25-54

125,697

81.7%

78.6%

3.7%

55-64

41,691

64.5%

62.5%

3.1%

65+

49,542

19.3%

18.6%

3.6%

All (16+)

255,079a

62.9%

60.1%

4.4%

Source: Congressional Research Service (CRS), based on published data from the U.S. Department of Labor, Bureau of Labor Statistics (BLS), Current Population Survey (CPS).

Note: The labor force participation rate
is the percentage of individuals in the population who arewere employed and who are unemployed (those who are not employed and not looking for work are out of the labor force). The E/P ratio representsEmployment-population ratios represent the percentage of the non-institutionalized population who arewere employed. The unemployment rate is the percentage of individuals in the labor force who arewere jobless, looking for jobs, and available for work. The share of persons not in the labor force includes individuals who have looked for work within the past year and those who have not a. The total does not add to 255,080 due to rounding.

Changes from 2000 through 2014

2017

Table 2 displays the youth labor force participation rates, E/P ratios, and unemployment rates for all youth by sex and race/ethnicity in four recent years: 2000, 2007, 2012, and 2014youth labor force data for young people ages 16 to 24 by sex, race, and Hispanic ethnicity in four years: 2000, 2007, 2014, and 2017. These four years are notable because they include a period when the economy was expandingthe start of a period with long-term changes in labor market outcomes for youth (2000), a period just before the start of the recentDecember 2007 to June 2009 recession (2007), and two recent full years after the recession ended (20122014 and 2014). Labor force trends for youth ages 16 through 24 were bleak even before the onset of the recession. From 2000 to 2007, the youth labor force participation decreased from 65.8% to 59.4%; their E/P ratio fell from 59.7% to 53.1%; and their unemployment rate increased from 9.3% to 10.5%.

From 2000 to 2014, the youth labor force participation rate decreased by about 16%: 65.8% of youth were in the labor force in 2000, compared to 55% in 2014. More youth appear to have dropped out of the labor force due likely to downward trends in the economy and the growing importance of education.21 A greater share of males than females left the labor force over this period. Minority youth—black, Hispanic, and Asian—were less likely than their white counterparts to be in the labor force. Asian youth (and black youth) had the lowest rates of labor force participation and E/P ratios in both 2000 and 2014. As discussed later in this report, it appears the lower E/P ratios for Asian youth reflect their greater likelihood of pursuing higher education in lieu of work compared with their racial/ethnic counterparts.

Also over the 14-year period, the E/P ratio for 16-to-24 year olds decreased from 59.7% to 47.6%, a decline of about 12 percentage points. While a greater share of males than females were employed in both 2000 and 2014, males experienced greater declines in their E/P ratio. Employment for all racial/ethnic groups decreased by 7 to 14 percentage points. White and Hispanic youth had the most dramatic declines, with the white E/P ratio decreasing from 64.5% to 50.7%. The Hispanic E/P ratio decreased from 57.6% to 45.8%. However, black and Asian youth had the lowest E/P ratios in both years. About 38.5% of black youth and 36% of Asian youth were employed in 2014, compared to about 45.9% in 2000; however, as noted below, Asian youth also had the lowest rate of unemployment in 2014.

Further, the unemployment rate for youth increased by over 40% during the 2000-2014 period, with a rise from 9.3% to 13.4%. In both 2000 and 2014, males (14.5% in 2014) were more likely to be unemployed than females (12.2% in 2014). Nearly one-quarter (23.1%) of black youth were unemployed in 2014. This is compared to a 2014 unemployment rate of 11.3% for white youth, 14% for Hispanic youth, and 12% for Asian youth.

The relative change in the E/P ratio was nearly constant for each racial/ethnic group over time; however, the relative change in the labor force participation rate and unemployment rate varied by race/ethnicity. Black, Asian, and Hispanic youth experienced the smallest relative change in unemployment of between 25% and 35%, whereas the unemployment rate more than doubled for white youth.

The table also includes labor force data from 2012, as well as absolute and relative changes from 2012 to 2014. The trend over this two-year period reflected overall improvements in the economy, with the unemployment rate declining for all subgroups. The E/P ratio increased generally. Despite these gains, youth of color continued to have high rates of unemployment. At the same time, there was a slight decrease in labor force participation generally and among some subpopulations (white youth and males), due likely to still-improving economic conditions and opportunities to pursue education.

Table A-1 and Table A-2 in the Appendix include labor force participation rates, E/P ratios, and unemployment rates for youth ages 16 to 19 and 20 to 24 in 2000, 2007, 2012, and 2014. From 2000 to 2014, teens saw striking declines in their labor force participation (-18.0%) and E/P ratios
(-17.9%) compared to young adults (-6.9% and -10.7%, respectively). While teen unemployment was higher, the relative change in unemployment for teens and young adults was in the same range (49.6% and 55.6%, respectively)2017). Labor force trends for these youth were on a downward trajectory before the onset of the recession.26 The table shows that youth labor force participation rates and the youth employment-population ratio in 2017 were generally lower than in 2000 and 2007; however, the youth unemployment rate was about the same, at 9%, in both 2000 and 2017, suggesting that young people gained some footing in the labor market following the recession.

The table also shows the following trends:

  • Both females and males ages 16 to 24 experienced sharp decreases in their labor force participation rate and employment-population ratios from 2000 to 2017. A slightly greater share of males had withdrawn from the labor market over the period, such that labor force participation rates were somewhat comparable for both females (54.3%) and males (56.6%) by 2017. Employment-population ratios were about the same in 2017 for males and females (50%), but males experienced a greater decline since 2000. The unemployment rate ticked up from 2000 to 2017 for male youth, and declined slightly for female youth.
  • Labor force participation and employment-population ratios for all racial and Hispanic ethnic groups decreased from 2000 to 2017. Black and Asian youth were less likely than white and Hispanic youth to be employed, but their relatively low employment rates had different drivers. Black youth were more likely to participate in the labor force but were less successful at finding jobs, as shown in their higher rates of unemployment. Asian youth were somewhat less likely to participate but had greater success in finding employment, as shown in their lower rates of unemployment (which were comparable to white youth).
  • The changes in youth labor force participation rates and labor force outcomes from 2014 to 2017 reflected overall improvements in the economy. There was a slight increase in labor force participation for all subgroups except white and Hispanic youth, whose participation rates remained constant. The employment-population ratio increased for all subgroups, and jumped by nearly 16% for black youth. Unemployment rates declined for all subgroups. Black youth unemployment dropped most significantly, but was still higher than other groups at 14.6%.
The first two tables in the Appendix display this same labor force data for youth, as breakouts for teens ages 16 to 19 (Table A-1) and young adults ages 20 to 24 (Table A-2). From 2000 to 2017, teens saw striking declines in their labor force participation (-17%) and employment-population ratios (-15%) compared to young adults (-7% and -6%, respectively). However, the unemployment rates for teens were similar in 2000 (13.1%) and 2017 (14%), and about the same for young adults (around 7%) in these two years. Still, the unemployment rates for both groups declined by about 30% since 2014.

Table 2. Labor Force Trends of Youth Ages 16-24 by Sex and Race/Ethnicity:
2000, 2007, 20122014, and 2017, and 2014

Not seasonally adjusted

Relative Changefrom 2000 to 2017

 

2000

2007

2012

2014

Absolute Change
from
2000-2014
(Percentage Points)

Relative Change
from
2000-2014
(Percentage)

Absolute Change
from
2012-2014
(Percentage Points)

2014

2017

Relative Change
from
2012-2014
(Percentage)

2014 to 2017

Labor Force Participation Rate

All

65.8

%

59.4

54.9

%

55.0

%

-10.8

55.5%

-16.415.7%

0.1

0.29%

Male

68.6

61.5

56.5

4

56.4

-12.2

6

-17.8%

5

-0.1

-0.2%

0.4

Female

63.0

57.2

53.2

53.6

-9.4

54.3

-14.9%

0.4

13.8

0.8%

1.3

White

69.7

62.0

57.3

1

57.1

-12.6

-18.1%

18.1

-0.2

-0.3%

0.0

Black

56.1

50.2

48.9

50.0

50

-652.1

-10.9%

17.1

2.2%

4.2

Hispanic

64.3

57.9

53.2

3

53.3

-11.0

-17.1%

17.1

0.1

0.2%

0

Asian

50.5

45.1

39.4

40.9

-9.6

41.7

-19.0%

1.5

17.4

3.8%

2.0

E/PEmployment-Population Ratio

All

59.7

53.1

46.0

47.6

-12.1

50.3

-20.3%

15.7

1.6

3.5%

5.7

Male

61.9

54.4

46.6

48.2

-13.7

50.8

-22.1%

17.9

1.6

3.4%

5.4

Female

57.4

51.8

45.4

47.1

-10.3

49.9

-17.9%

1.7

13.1

3.7%

5.9

White

64.5

56.3

49.1

50.7

-13.8

52.5

-21.4%

118.6

3.3%

6

Black

45.7

40.5

35.8

38.5

-7.2

44.5

-15.8%

2.7

2.6

7.5%

15.6

Hispanic

57.6

51.7

43.7

45.8

-11.8

48.2

-20.5%

16.3

2.1

4.8%

5.2

Asian

45.9

41.9

34.4

36.0

-9.9

38.3

-21.6%

16.6

1.6

4.7%

6.4

Unemployment Rate

All

9.3

10.5

16.2

13.4

4.1

9.2

44.1%

-1.1

-2.8

-17.3%

31.3

Male

9.7

11.6

17.6

14.5

4.8

49.5%

14.5

10.3

-3.1

6.2

-17.6%

29.0

Female

8.9

9.4

14.7

12.2

3.3

37.1%

12.2

8.1

-2.5

9.0

-17.0%

33.6

White

7.4

9.2

14.2

11.3

3.9

52.7%

11.3

8.1

-2.9

9.5

-20.4%

28.3

Black

18.5

19.3

26.8

23.1

414.6

24.9%

-3.7

-21.1

-13.8%

36.8

Hispanic

10.4

10.7

17.7

14.0

3.6

34.6%

14.0

9.6

-37.7

-20.9%

31.4

Asian

9.1

7.2

12.7

12.0

2.9

8.2

31.9%

-9.9

-031.7

-5.5%

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: The labor force participation rate is the percentage of individuals in the population who arewere employed and unemployed (those who are not employed and not looking for work are out of the labor force). Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The unemployment rate is the percentage of individuals in the labor force who arewere jobless, looking for jobs, and available for work. Persons of Hispanic origin can be of any race and individuals of any race may be Hispanic.

a. Absolute change refers to the percentage point change from 2000 to 2014, and is derived by subtracting 2014 data from 2004 data. Relative change refers to the percentage change over the same period,period referenced and is derived by subtracting 20142017 data from 2000 or 2014 data and then dividing that number by the 2000 or 2014 data.data.

Unemployment Since the 2007-2009 Recession

The 18-month recession that spanned December 2007 through June 2009, which some have called the "Great Recession,"22 disproportionately affected young people. Figure 1 shows the seasonally adjusted unemployment rates for teens, young adults, and adults of prime working age from the fourth quarter of 2007 through the fourth quarter of 2014. Over this period, unemployment rates for all groups steadily increased for each age cohort, peaking in 2009. Teen unemployment climbed from 16.1% at the end of 2007 to 26.8% at the end of 2009. During these same two years, the unemployment rate for young adults increased significantly, almost doubling from 8.7% in the fourth quarter of 2007 to 15.8% in the fourth quarter of 2009. Notably, the unemployment rate for teens increased over the first three quarters of 2011, and then declined (to 23.6%) in the fourth quarter. It increased again during the first two quarters of 2012, and decreased in most subsequent quarters. By the last quarter of 2014, the teen unemployment rate was 17.7%. The young adult quarterly unemployment rate steadily declined over time, but did not decrease in each quarter. The unemployment rate for workers of prime age declined in each quarter since 2011, but these rates were higher than they were in 2007. Rates for both groups of workers reached a post-recession low of 10.7% and 4.8%, respectively, by the end of 2014.

Figure 1. Quarterly Unemployment Rates by Select Age Groups,
Fourth Quarter of 2007 through Fourth Quarter of 2014

Seasonally adjusted

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: The unemployment rate is the percentage of individuals in the labor force who are jobless, looking for jobs, and available for work.

Trends Over Time

The figures and tables in the remainder of the report include employment and unemployment data over the period following World War II based on age, sex, race/ethnicity, and family income.23

Age

The labor market experiences of youth are different based on their age. Figure 2 shows the E/P ratio from 1948 through 2014 for teens, young adults, and adults ages 25 through 54. (The figure also displays the 11 periods when the country was in recession.24) Over that time, teens had the lowest rates of employment, while adults of prime working age had the highest employment rates.

Youth

The E/P ratio for teens was 47.7% in 1948 and reached a post-World War II low of 25.8% in 2011; however, the E/P ratio increased slightly for this population to 27.3% in 2014. In the intervening years, there was variation in the rate—with 41.3% as the average. The data show points at which E/P ratios reached local troughs and peaks. As expected, teen employment generally declined soon after the start of a recession and reached local lows at the end of the recession or a year or two later. Notably, the teen employment rate was below 40% in 20 years over this 66-year period. Seven of those years were between 1958 and 1965 and 13 were between 2002 and 2012. This suggests a fairly recent long-term decline in teen employment. Still, the teen employment rate picked up slightly from 2000 to 2012.

Also over the post-World War II period, the E/P ratio for young adults ages 20 to 24 was higher and more stable than it was for teens. In both 1948 and 2014, approximately 6 out of 10 young adults were employed. Unlike the teen E/P ratio, which had more cyclical trends, the E/P ratio for young adults steadily improved over the period, particularly following the 1960-1961 recession. This could be due, in part, to women entering the labor market in greater numbers starting in the 1960s. Declines in the E/P ratios for young adults over the entire period were fairly small. The greatest change to the E/P ratio for this population occurred in the last decade, when the rate fluctuated from a high of 72.2% in 2000 to a low of 60.3% in 2010; however, the rate increased to 62.9% by 2014.

The long-term decline in E/P ratios for youth ages 16 to 19 appears to reflect, at least in some part, their withdrawal from the labor market. Figure A-1 and Figure A-2 in the Appendix show the labor force participation rate, E/P ratio, and unemployment rate for teens and young adults from 1948 through 2014. Over this period, labor force participation for teens was lower than that of young adults. Teen labor force participation trended upward from the 1960s until reaching a peak in 1979 at nearly 58%. Over the next two decades, the rate was uneven. It then declined by about 9% from 2000 to 2014. In contrast to teens, the labor force participation of young adults steadily increased in most years over the post-World War II period. It was stable at about 70% to 80% in most years; however, at the start of the 2000s it began to tick downward, reaching its lowest point (in 2010) since the early 1970s. From 2010 to 2014, the E/P ratio increased for young adults, from 60.3% to 62.9%.

These changes can likely be viewed as partially a consequence of a positive social trend—the increase in school enrollment, particularly for youth ages 16-19.25 In addition, as discussed later in the report, students are increasingly pursuing unpaid internships to meet high school graduation requirements and improve their prospects for attending college.26 So although they are gaining employment experience, they are not included in the labor force.

Nonetheless, these trends do not necessarily reflect a tendency toward voluntary withdrawal from the workforce to complete schooling. Indeed, some young people may have dropped out of the labor market because of dismal employment prospects, especially in light of the jobless recovery following the 2001 recession. Although the economy rebounded, the E/P ratios of teens and young adults stabilized or declined in subsequent years. The 2007-2009 recession likely further contributed to the downward trend. The growing unemployment rate since 2008 suggests that some youth have withdrawn from the labor force because of their inability to find work. Figure A-1 and Figure A-2 in the Appendix show the unemployment rate for teens and young adults. The unemployment rate for teens was between 10% and 20% in most years over the post-World War II period. In 2010, this rate reached a recorded high of 25.9%. Only in eight years—1982, 1983, 1992, 2009, 2010, 2011, 2012, and 2013—did the teen unemployment rate exceed 20%. Notably, the E/P ratio and unemployment rate for teens converged in 2010 so that about one-quarter of teens in the general population was working and one-quarter of teens in the labor force were unemployed. Since that time, a more positive trend has emerged: as of 2014, 27.3% of teens were working and 19.6% were unemployed.

The unemployment rate for young adults fluctuated over the post-war period, from a low of 4.1% in 1951 to a high of 15.5% in 2010 (and improving to 11.2% in FY2014). The last time unemployment increased above 11% for young adults was during the back-to-back recessions of the early 1980s, when the unemployment rate reached a high of 14.9% (in 1982).

Workers of Prime Age

As shown in Figure 2 the employment trend line for prime-age workers 25 through 54 was the highest of the three age groups. Although it was mostly parallel to the employment trend line for 20- through 24-year-olds, older workers increasingly were more likely to be employed over time. From the 1950s through 1970s, workers of prime age had somewhat comparable E/P ratios to young adults, with about 5% more prime-age workers employed in most years on average. Starting in the 1980s, the difference in their E/P ratios began to grow. By the 1990s, about 10% more of the prime-age population was employed than of the young adult population. This difference grew to 14% in 2014. The unemployment rate for workers of prime age was 4.6% on average over the post-World War II period. Only in two years, 2009 and 2010, did it exceed 8%.

Figure 2. Employment-Population Ratios by Select Age Groups, 1948-2014

Not seasonally adjusted

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed.

Sex

The employment experiences of teens and young adults have differed based on sex. Figure 3 shows the E/P ratios for female and male teens and young adults for 1948 through 2014. For many years, the E/P ratios for females were much lower than they were for their male counterparts; however, beginning in the mid-1960s, the E/P ratios for females, particularly young women, turned upward whereas the ratios for males tended to be downward trending. This was due, in part, to increasing numbers of women entering the labor force.27 At this time, women began completing college at a higher rate than previous generations of women,28 which has likely influenced the extent to which they pursued and secured employment. In addition, other factors—lower fertility, declines in marriage rates, and increased likelihood of divorce—have played a role in women's increased participation in the labor force, among other factors that are not easy to quantify (i.e., shifts in expectations about roles based on sex).29 The difference in the E/P ratios for males and females in both age groups began to narrow in the 1990s, but likely for different reasons. For teens, the male E/P ratios started to drop while the female E/P ratios began to rise, so that by 1996 the rates were nearly identical. For young adults, females made significant inroads into the labor market. By the late 1990s, their E/P ratios were virtually the same as those for their male counterparts.

In most years since 2000, the E/P ratios of teen and young adult males and females declined. These declines were greater for male teens, such that the female teen E/P ratio surpassed that of males; however, both groups have experienced decreases in employment in the past few years. About 25%-26% of teen males were employed and about 27%-28% of teen females were employed in each of 2010 through 2014. A slightly greater share of young males was more likely to be employed: in 2014, 64.9% of males and 60.9% of females were employed.

Similar E/P ratios for males and females may be attributable to the changing employment prospects of less-educated individuals, as discussed further below. Young males ages 16 through 24 are somewhat less likely to be enrolled in high school or college than their female counterparts,30 and a smaller share of males ages 25 through 29 have obtained a college degree (see Table 3).31 Overall, young males had more negative labor market outcomes than females. As shown previously in Table 2, males were more likely to be unemployed over the past decade.

Figure 3. Employment-Population Ratios of Teens and Young Adults by Sex,
1948-2014

Not seasonally adjusted

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed.

Race and Ethnicity

Youth employment has varied by race and ethnicity. Data on the E/P ratios of white youth have been available since 1954. The data for black, Hispanic, and Asian youth became available in 1972, 1994, and 2000, respectively. In years where data are available for both white youth and other racial and ethnic groups, the E/P ratio was highest for white youth.

Figure 4 shows the E/P ratio of teens ages 16 to 19 by race and ethnicity. The employment trends for white, black, and Hispanic youth (in applicable years for black and Hispanic youth) reflected cyclical effects of the economy over the period depicted, until the late 1990s. Shortly thereafter, the E/P ratios for all groups declined by about 15 to 20 percentage points, with white teens having the steepest decline in employment over the period of recovery following the 2000 recession. In recent years, about one-third of white teens; almost one-quarter of Hispanic teens; and nearly one-fifth of black and Asian teens were employed. Figure 5 shows the employment trends for young adults by race and ethnicity. Employment for white young adults steadily increased, even during most recessions, over the post-World War II period. In 1954, their E/P ratio was 55.9%, and in 2000 it peaked at 75.2%. It then declined steadily, reaching a recent low of 63.5% in 2010, but increased to 66.4% in 2014.

Despite recent improvements for employment among minority youth, youth of color have had lower E/P ratios relative to white youth. These lower rates may be due, in part, to the fewer employment prospects of individuals with less education (see discussion below). Overall, African Americans and Hispanics ages 16 through 24 are less likely to have completed high school and college.32 Schooling may also explain the relatively low E/P ratios for Asian youth, but for a different reason. Asian youth have had the highest rates of school completion for college (and comparable rates for high school completion compared to white youth).33 The 2012 E/P ratio for Asian teens was at a recorded low of 15.9%. Further, as shown in Table 2, Asian youth had the lowest rates of unemployment in recent years, which is likely a reflection of their high rates of school attainment.

Figure 4. Employment-Population Ratio of Teens Ages 16-19
by Race and Ethnicity, 1954-2014

Not seasonally adjusted

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The Bureau of Labor Statistics began recording employment data for blacks in 1972, for Hispanics in 1994, and for Asians in 2000. Persons of Hispanic origin can be of any race and individuals of any race may be Hispanic.

Figure 5. Employment-Population Ratio of Young Adults Ages 20-24
by Race and Ethnicity, 1954-2014

Not seasonally adjusted

Source: Congressional Research Service (CRS) based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The Bureau of Labor Statistics began recording employment data for blacks in 1972, for Hispanics in 1994, and for Asians in 2002. Persons of Hispanic origin can be of any race and individuals of any race may be Hispanic.

Income

Finally, employment rates tend to vary by family income. An analysis by Northeastern University's Center for Labor Studies shows the summer employment rate of teens ages 16 through 19 increases as household income increases, and that family income (along with other factors) has a statistically significant effect on the probability of youth employment.34 In 2011, less than one out of every five teens in the country's 100 largest metropolitan areas worked in households with earnings below $20,000. This is compared to about one-fifth of teens in the same communities with household incomes of $20,000 to $40,000; and 26% to 28% of teens with household incomes of $40,000 to $60,000, $60,000 to $75,000, and over $75,000. The research literature has not explored the extent to which low-income youth pursue employment because of their family's financial situation.

Factors Influencing the Youth Employment Situation

The decrease in the youth E/P ratio is associated with increasing youth unemployment. Both of these indicators demonstrate that youth have fairly limited opportunities in the labor force, although their prospects have improved in the past few years. There are many factors that affect labor market outcomes for youth; several factors affect the labor market as a whole and some are more specific to youth. This section provides a brief summary of some of these factors.

The Labor Market

One likely explanation of the dismal employment opportunities for youth is the supply of jobs and demand for workers. In general, firms lay off workers during recessions to respond to reduced demand for their goods and services. In the latest recession, which started in late 2007, the decline in economic activity (as measured by gross domestic product, or GDP) bottomed out in the second half of 2009. Since that time, there is some evidence that GDP adjusted for inflation (real GDP) has increased, albeit unevenly, in each quarter since the third quarter of 2009.35 The labor market, however, has not fully recovered despite recent economic growth. The Congressional Budget Office (CBO) noted in 2014 that the slow recovery of the labor market has resulted from the slow growth in the demand for goods and services.36 Nonetheless, CBO more recently projected increases in GDP in 2015 through 2017 that are greater than in 2014 and prior recent years.37

Experience and Education

Experience and education are also important determinants of the success of youth in the labor market. These factors are not specific to youth, of course, but may have a more pronounced effect on youth because of their relative lack of experience and education compared to other labor market participants.

In general, firms are more likely to hire workers with more experience and availability, which puts young workers at a disadvantage. Young workers may especially face challenges in landing a job during tough economic times.38 Further, the labor market trends for youth are associated with their relatively frequent job changes, with each transition potentially involving a spell of unemployment. About two-thirds of all job changes occur within the first 10 years of a young person's working life, during which time he or she will work for eight employers on average.39 This initial period of frequent job turnover has positives and negatives. Frequent job turnover among new labor force members may reflect their trying out different positions and work environments until they find the optimal match; however, it may also reflect employer reluctance to hire inexperienced workers for career ladder positions and young workers in dead-end jobs having little reason to form a lasting attachment to any particular firm. Analyses of data from the National Longitudinal Survey of Youth (NLSY)40 generally found that while typical young workers do not enter a long-term job (of at least three years duration) immediately after leaving school, they do so within five years. Job tenure also depended on education. College graduates generally found stable, long-term employment almost immediately while high school dropouts had several short-term jobs even 15 years after leaving school.41 In a recession, a youth's short and disrupted work history may make hiring him or her less desirable.

Education also plays a role in whether youth seek and are able to find work. Youth may decide not to pursue employment and to attend school instead; they may want to do both, but may not have opportunities to work due to a lack of jobs. The rising rate of school enrollment has likely influenced the downward trend in the labor market participation rate for teens and young adults.42 Figure 6 shows that the rates of enrollment in higher education among 18- and 19-year-olds and 20- through 24-year-olds have steadily increased over time, reaching near all-time (or all-time) highs in 2012.43 That year, 47% all teens ages 18 and 19 were attending colleges, universities, and professional schools—an increase of over 34% since 1970. (Notably, the rate of teen attendance declined in each year from 2009 to 2012, which may be due to slight improvements in the employment rate at the end of this three-year period.) Two out of five young adults ages 20 through 24 were enrolled in higher education in 2012, compared to about 1 out of 5 in 1970.44

Figure 6. Rate of College Enrollment Among Youth Ages 18-24, 1948-2012

Factors Influencing Youth Employment

The labor force situation has generally been improving for youth since the last recession ended in June 2009. Nonetheless, their employment-population ratios have only recently recovered to pre-recession levels. Multiple variables likely affect labor market outcomes for youth. This section provides a brief summary of some of these factors. One major factor is that youth have less education and experience relative to older workers. In general, firms are more likely to hire workers with greater experience. Youth may also face increased competition for jobs that require less education. Further, a growing number of young people are enrolled in school, particularly post-secondary education, and therefore may be out of the labor force. Teens are especially likely to report that they are not in the labor force because they are attending school. As with experience, firms are more likely to hire workers with greater availability.

Labor Market Strength

Labor is a "derived demand," meaning firms hire and retain workers to produce goods and deliver services sought by consumers. The overall health of the economy is a predictor of whether individuals seeking jobs or who have jobs, including youth, are able to secure and maintain employment. In other words, when demand is greater for goods and services, employers generally have a greater demand for workers. In the latest recession, the decline in economic activity (as measured by gross domestic product, or GDP) bottomed out in the second half of 2009. Since this time, the labor market has been recovering, albeit at a relatively slow pace.27 The Congressional Budget Office (CBO) projected that increases in GDP from 2017 through 2027 are expected to remain modest, primarily because of a slow increase in the size of the labor force.28

As noted, firms are generally more likely to hire workers with greater experience and availability, which puts young workers at a disadvantage. Young workers may especially face challenges in landing a job during difficult economic times. Some analyses have found that the rising premium on education could be linked to a decrease in demand for some adult workers with less education. In turn, this decrease can lead to greater competition between adults and young people looking for work. 29 In addition, adult immigrants with lower levels of education may contribute to this increased competition.30 How immigration affects labor markets is a large and complex area of economic research, and economic theory produces a range of possible outcomes that depend on multiple factors.31

Education

Education likely also plays a role in whether youth seek and are able to find work. Youth may decide not to pursue employment and to attend school instead; or they may want to do both, but may not have as many job options without adequate levels of education.

A growing share of young people is attending school. A Federal Reserve Bank analysis shows that school attendance for 16-to-24 year olds without a high school diploma increased from 38% in 1998 to 60% in 2014, and that this upward trend has been driven by youth ages 16 to 19.32 Figure 5 shows the rates of enrollment in higher education among youth ages 18 to 19 and 20 to 24. The figure indicates that these rates steadily increased over time, reaching an all-time high in 2010 (51%) for teens and in 2012 (40%) for young adults. From 1970 to 2015, the rate of teen attendance in higher education increased by about 30%. The slight decline in attendance in higher education for teens, from the 2010 peak to about 50% in 2015, may be due to improved prospects in the labor market and other factors, such as the rising cost of public higher education.33 About 40% of young adults were enrolled in higher education in 2015, compared to about 20% in 1970.34

School attendance and the intensity of educational activities likely plays a role in the downward trend in the labor market participation rate for teens and young adults.35 A BLS analysis indicates that 9 out of 10 teens ages 16 to 19 cited school attendance as the main reason for not being in the workforce in 2014.36 Teens attending school were also much less likely to work than in previous years. The BLS study further indicated that teens appear to face greater academic demands and pressure, which may influence their education and labor force choices. The study noted that participation in educational activities takes up a larger amount of time in a young person's day than ever before. Further, more high school students are satisfying the requirements needed for attending a four-year college, and a growing share of students are taking coursework to prepare them for college: about 10% of students took such coursework in 1982, compared to nearly 50% in 2000 and almost 62% in 2009.

Figure 5.Percentage of Youth Ages 18-24 Enrolled in Higher Education, 1970-2015

Shaded areas denote recessions

Source: U.S. Department of Education, National Center for Education Statistics (NCES), Digest of Education Statistics: 2013, "2015, Table 103.20, "Percentage of the Population 3 to 34 Years Old Enrolled in School, By Age Group: Selected Years, 1940 Through 2012," December 2013through 2015," July 2016.

Notes: CollegeHigher education refers to public and private colleges, universities, and professional schools. Increases in school attendance and related school activities suggest that young people are foregoing work to instead pursue education because of the gains they can make in the labor market at a later time—although the extent to which this occurs is uncertain because of data and survey limitations. However, a large body of research documents favorable labor force outcomes for individuals with a bachelor's degree or higher, which likely accounts for such decisionmaking.37 refers to public and private colleges, universities, and professional schools. The data for 18- and 19-year-olds are not available prior to 1970.

A Department of Labor study attributes the declining summer teen employment beginning in the early 2000s to education.45 The study found that the proportion of teens enrolled in school during the summer has steadily increased, from about 15% in 1985 to 53% in 2009. Teens appear to face greater academic demands and pressure, which may influence their education and employment choices. The study noted that more high school students are satisfying the requirements needed for attending a four-year college, and that a growing share of students are taking advanced placement (AP) courses. The average number of credits earned by high school graduates increased from 21.6 in 1982 to 26.7 in 2005. Also over this same period, the proportion of graduates who took an advanced mathematics course increased from 26.3% to 48.8% (the gains are similar for other advanced courses). Teens may feel compelled not to pursue work for the summer and instead opt for volunteer opportunities or internships in order to fulfill their graduation requirements and improve their prospects for getting into a four-year college or university. According to the study, Current Population Survey data from 2009 show that over one-quarter of teens ages 16 through 19 had reported volunteering at some time during the prior year.

Young people may also forego working and pursue education instead because of the gains they can make in the labor market at a later time—although the extent to which this occurs is uncertain. Success in the workforce is related to education, with the payoff being lower unemployment and higher wages as educational attainment increases. Figure 76 shows the unemployment raterates and median weekly earnings for full-time workers ageages 25 and older in 2014. As2017. Generally, as the level of education rises, the unemployment rate decreases and median weekly earnings increase. Among adults with less than a high school degree, 9.0for example, 4.6% were unemployed and earnings were $488712 per week. This is compared to an unemployment rate of 6.0% and $668 in weekly earnings for a high school graduate. Adults with a bachelor's degree or higher had an unemployment rate of 3.5% or lower and median weekly earnings that ranged from $1,101 to $1,639.

2.5% and nearly $1,200 in weekly earnings for college graduates.

Figure 7. 6.Median Weekly Earnings and Unemployment Rates
by Education Level for Adults AgeAges 25 and Over, 2014

2017

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey, Earnings and Unemployment Rates by Educational Attainment, April 2, 2015.

More Education: Lower Unemployment, Higher Earnings, March 2018.

Workers with higher levels of education are more likely to weather hard economic times.46 According to a 2010 analysis, in the past two recessions, "the typical job loser was a high school-educated male in a blue collar job, such as manufacturing or construction, working in the middle of the country. In the past two recoveries, the typical job gainer was a female with a postsecondary education who lived on either coast and worked in a service occupation—particularly healthcare, education, or business services."

Table 3 shows educational attainment by race and sex for young people ages 25 through 29 in three 38 A growing number of young people have obtained a college degree, which is likely attributable to the widely held belief that higher education leads to favorable returns in employment. Table A-3 in the Appendix shows the share of young people ages 25 to 29 who have completed high school or college in three selected years: 2000, when the economy was expanding but youth employment was beginning a long-term decline; 2007, immediately before the start of the recentDecember 2007 to June 2009 recession; and 20142016, the most recent full year after the recession for which data are available after the recession. Data are available for all. Data are also shown for racial and ethnic groups, except Asian youth in 2000. These data seem to correspond with data about participation in the labor force. For example, Asian youth were much more likely than their peers to obtain a college degree. They were also the least likely to be in the labor force.

39

From 2000 to 20142016, females and males made the same gains in high school completion but females were much more likely to have attained a college degree. In 20142016, males and females were likely to complete high school at almost the same rate (91.593% for females and 90.191% for males); however, 37.2about 40% of females had completed at least a bachelor's degree bybefore age 30, compared to 30.9% of the about 33% of males. In almost every racial and ethnic category, females were more likely than males to graduate from high school and college in both 2000 and 2014; however, a slightly greater share of black males were more likely to complete high school.

All racial and ethnic groups also experienced gains over time, except that the Asian female high school graduation rate decreased by about 1 percentage point and the Asian male college rate decreased by about 4 percentage points. In 2014, Hispanic males ages 25 through 29 were far less likely to finish high school (72.4%) than white males (95.4%) and black males (90.2%); however, nearly one-fifth more Hispanic males had a high school degree in 2014 than in 2000. A relatively small share of black males and Hispanic males completed college in both 2000 and 2014, compared to white males. Black females ages 25 through 29 made significant gains in college attainment from 2000 (17.0%) to 2014 (23.4%) as did their Hispanic counterparts over the same period (11% in 2000 and 18.3% in 2014).

Data on Asian youth ages 25 through 29 are available only for 2007 and 2014. A lower share of Asian female youth graduated from high school and a lower share of Asian male youth graduated from college in 2012 than in 2007. Still, Asian young adults were more likely to have completed high school and college. In 2014, about 56% of Asian males and 67% of Asian females were college graduates, compared to about 38% of white males and 44% of white females.

Table 3. Percentage of Young Adults Ages 25-29 Who Completed High School or College, by Sex and Race/Ethnicity: 2000, 2007, and 2014

Educational Attainment by Year

Total

Non-Hispanic White

Black

Hispanic

Asiana

Males

Females

Males

Females

Males

Females

Males

Females

Males

Females

High School

2000

86.7%

89.4%

92.9%

95.2%

86.6%

85.3%

59.2%

66.4%

N/A

N/A

2007

84.9%

89.1%

92.7%

94.2%

87.0%

87.8%

60.5%

70.7%

95.8%

98.5%

2014

90.1%

91.5%

95.4%

95.9%

90.2%

89.4%

72.4%

77.8%

96.3%

97.2%

Absolute Change from 2000-2014
(Percentage Points)b

3.4

2.1

2.5

0.1

3.6

4.1

13.2

11.4

0.5

-1.3

Relative Change
from 2000-2014
(Percent)b

3.9%

2.3%

2.7%

0.6%

4.2%

4.8%

22.3%

17.2%

0.5%

-1.3%

College

 

 

 

 

 

 

 

 

 

2000

27.9%

30.1%

32.3%

35.8%

18.1%

17.0%

8.3%

11.0%

N/A

N/A

2007

26.3%

33.0%

31.9%

39.2%

17.9%

19.9%

8.6%

15.4%

59.8%

62.0%

2014

30.9%

37.2%

37.7%

43.9%

19.5%

23.4%

12.4%

18.3%

56.3%

66.5%

Absolute Change from 2000-2014
(Percentage Points)b

3.0

7.1

5.4

8.1

1.4

6.4

4.1

7.3

-3.5

4.5

Relative Change
from 2000-2014
(Percent)b

10.8%

23.6%

16.7%

22.6%

7.7%

37.6%

49.4%

66.4%

-5.9%

7.3%

Source: Congressional Research Service (CRS), based on U.S. Department of Commerce, Census Bureau, Annual Social and Economic Supplement to the Current Population Survey, Table A-2, "Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years: 1940 to 2014."

Note: N/A means not available. College attainment refers to a bachelor's degree or higher.

a. The absolute and relative changes for Asian youth are based on 2007 and 2014 data since 2000 data are not available.

b. Absolute change refers to the percentage point change from 2000 to 2014 and is derived by subtracting 2014 data from 2000 data. Relative change refers to the percentage change over the same period and is derived by subtracting 2014 data from 2000 data and then dividing that number by the 2000 data.

2016 (about the same share of black males and black females completed high school). College completion rates generally rose over time across racial and ethnic groups, especially for Hispanic male and female young adults. Their rates of college completion nearly tripled from 2000 to 2016. Black female young adults also saw a sizable increase of nearly 50% over the period. In short, females and some minority youth, notably Hispanic youth and black female youth, have made educational gains since 2000. This may be one reason that labor market outcomes of females have been relatively better than those of their male counterparts. Over the 2000 to 2017 period (see Table 2), the employment-population ratio for females declined by nearly 8% compared to 11% for males. Additionally, the unemployment rate for females decreased while the unemployment rate for males increased. Minority youth also had smaller losses in labor force participation over this same period relative to white youth.

Other Factors

The factors discussed thus far affect the labor market experiences of both youth and adults, although the effects tend to be largermore significant for youth. There are additional factors that have been posited to have particular relevance formay particularly influence youth outcomes in the labor market.

Mobility

40 Seasonality of Work

Youth tend to have frequent movements in and out of the labor force. The educational calendar exacerbates the probability of unemployment for young labor force (re)entrants. They typically floodcome into the labor market in May and June either searching for summer jobs after the school year has ended or seeking initial jobs upon graduating (or dropping out).41 While the regularly occurring swell in the labor supply of youth coincides with increased demand for workers in some seasonal industries, this is not the case for most firms in the economy.

Neighborhood Characteristics

Other external factors can affect the labor status of young people. Among these factors are the characteristicsCharacteristics of the neighborhoods in which theyyouth live, such as area employment and poverty rates, and proximity of those neighborhoods to jobs. An analysis that utilized data from the National Longitudinal Survey of Youth (NLSY) and U.S. census tract information for 1980 and 1990 estimated that 14- through 22-year-olds who grew up in metropolitan areas with relatively high poverty rates had a lesser likelihood as adults of being employed in the civilian economy or in the Armed Forces and a greater likelihood of not being in the labor force.47 Being raised in a poor neighborhood appears to more adversely affect young males, especially those in poor families, than females. Other research similarly shows neighborhood effects can vary according to the characteristics of youth. For example, another study based on NLSY data estimated that the adverse impact on labor market attachment of young out-of-school males living in disadvantaged metropolitan areas was harsher for those with less than 12 years of schooling.48

In addition to social isolation from work due to a dearth of role models and job referral networks, geographic isolation from fast-growing job-rich areas (i.e., spatial mismatch) has been shown to affect youths' employment outcomes. Some analyses estimated that limited social access has a more adverse impact than access to transportation. Nonetheless, the proximity of jobs was still found to affect their labor market involvement independent of other factors.49

Consequences of Youth Labor Force Participation Trends

The consequences of growing youth unemployment and decreasing E/P ratios among youth have not been fully explored in the research literature. The few recent studies that address the effects of youth labor market participation have focused on the individual outcomes for youth and not, for example, on societal or economic outcomes such as reduced gross domestic product (GDP).50 The studies found that on average, early youth unemployment has serious negative effects on income but not as strong of effects on future unemployment. Still, other, can also affect their labor status. Findings in this research area have been somewhat mixed. For example, an analysis found that certain neighborhood characteristics (higher rates of property crime, child abuse, and older housing stock) in one major metropolitan area were associated with higher rates of employment and more hours worked for low-income teens who lived in public housing; however, this association varied by sex, race, and ethnicity.42 Other research has found an association between better communities (e.g., less concentrated poverty, less income inequality, better schools) and better outcomes for children from poor families, including higher earnings as young adults. Further, the study found that the income gap between white and black young adults can be explained in some part by the differences in where they grow up.43

In addition, geographic isolation from fast-growing, job-rich areas (i.e., spatial mismatch) has been shown to affect youth employment outcomes. Some analyses estimated that limited proximity of jobs has a more adverse impact than access to transportation, and the proximity of jobs was found to affect the labor market involvement of youth independent of other factors.44 Geographic proximity to schools appears to influence decisions to attend college, and therefore may also lead to disparities in later job opportunities. Studies have shown a relationship between proximity to college and college attendance even when controlling for the characteristics of individuals and families who live near colleges versus those who live farther away.45

Effects of Youth Labor Force Trends The effects of decreasing labor force participation and employment among youth have not been fully explored in the research literature. Some studies addressing these trends have focused on the individual outcomes for youth and not, for example, on societal or economic outcomes such as reduced GDP.46 The studies found that on average, early youth unemployment has serious negative effects on income but not as strong of effects on future unemployment. Other studies show that youth entering the labor force during a downturn in the economy have poorer labor market outcomes in the long run. These studies are discussed briefly below.

Using data from the National Longitudinal Survey of Youth (NLSY), researchers estimated the long-term effects of youth unemployment on labor market outcomes.5147 They examined the employment status of young men in the sample when they were in their 20s and later in their early 30s. They found that human capital (nearly 10 years later. The study found that their average level of education and training) increased over time, but also that early unemployment affected both wages and future unemployment. Their economic modelIt projected that a six-month spell of unemployment at age 22 would result in a 2% to 3% lower wage rate in their early 30s.

Other research has examined how young workers fare when entering the labor market during a weak economy. One study pooled data from the NLSY and other sources to estimate short- and medium-term effects of graduating from college during a recession at some point between 1974 and 2011. The study found that graduating during a recession reduced earnings, on average, by 10%. The loss of earnings persisted, with average earnings loss of 1.8% per year over the first 10 years. This decrease is driven in part by an inability to obtain hours of work and a loss in earning power. 48

Other research has found that young people's experiences in the job market since 2000 have been less favorable than in prior years. An analysis by the Federal Reserve examined unemployment from 1990 through early 2013 for 22 to 27 year olds with at least a bachelor's degree. Its analysis found that securing employment tended to be more difficult for those just out of college at any point over this period. The study also found that unlike their earlier counterparts, a greater share of young people graduating from college since the early 2000s were working in low-wage jobs (e.g., bartender, food server) as opposed to other non-college jobs with higher wages (e.g., electrician, hygienist).49

Conclusion This report provides an overview of the youth labor force situation. It shows that teens and young adults were withdrawing from the labor force over the time periods discussed, and those in the labor force were less likely to be employed than older workers. Several factors influence these trends. For example, school enrollment means less supply of young workers. The characteristics of young workers—their relative lack of work experience, lower levels of education, and frequent movement in and out of the labor force—also play a role. Perhaps most striking is that the employment-population ratio for youth, especially for teens, has eroded over the past decade—even in years when the economy was growing. The teen employment-population ratio has been below 40% in each year since 2002. This illustrates a decline in long-term employment ratios that began in the early 2000s, likely due, in part, to youth withdrawing from the labor force to pursue educational opportunities. While the employment-population ratio trend line for 20 to 24 year olds has been higher and more stable, the employment gains for this population have dipped since the early 2000s. Nonetheless, the employment-population ratio for young adults was higher in 2017 (about 66%) than it was in 1948 (about 60%). projected that a six-month spell of unemployment at age 22 would result in an 8% lower wage rate, on average, one year later. The effects of this early spell persist; at age 26, wages would be 5% lower than what they would have otherwise been, and wages would be 2% to 3% lower at ages 30 and 31. Finally, the study found that past unemployment affected future unemployment, but only in the short term.

Studies of the effects of youth unemployment in OECD (Organisation for Economic Co-operation and Development) countries have found similar declines in wages as the result of early unemployment.52 A study of youth unemployment in the United Kingdom determined that one year of unemployment at age 22 reduced wages by 13% to 21% 20 years later. The study controlled for education, family income, and personal characteristics. Another study found that unemployment immediately upon graduation from college is associated with substantial and permanent future earnings losses; however, the long-lasting effects of unemployment depend on the labor market conditions in which youth are unemployed.

Other research has examined how young workers fare when entering the labor market during a bad economy. One study used NLSY data to determine the effects of white males graduating from college with a bachelor's degree before, during, and after the recessions of the early 1980s (from 1979 through 1989).53 The study examined how national and state unemployment influenced the wages, probability of being employed, and occupation type for these young men. After controlling for the possibility that individuals decide when to graduate from college in light of economic conditions, the study found that an increase in national unemployment by 1 percentage point decreased the wages of the general sample by about 4% in each of the 17 years following their graduation (relative to graduates who left school in 1989, when unemployment was at its lowest point during the 10-year period). In addition, higher unemployment in the year graduates left school was also associated with lower occupational prestige; however, the effects on the likelihood of being employed and on tenure were insignificant to modest. The analysis of state unemployment rates was more mixed but showed some long-term effects on wage and related labor outcomes.

The study also used Current Population Survey data to examine whether the recession of the early 1990s had similar impacts on workers. The CPS is a cross-sectional data set, and therefore the individuals in each annual survey vary. The study restricted the sample to white males with at least a bachelor's degree from 1997 through 2006, and found that a 1 percentage point increase in the national unemployment rate when these individuals were age 22 resulted in wage losses for 10 years; however, wage effects disappeared after 10 years. This could be due to measurement error because age 22 served as the proxy year for college graduation (which is unknown in the CPS) when, in fact, graduates may have finished college at a different age.

Similar research used the NLSY and CPS (Outgoing Rotation Group, ORG) to estimate the effects of white and black males graduating from college in a bad economy, except that this study also examined whether employers selected college graduates with the highest aptitude during a recession.54 The study found that college graduates hired in a recession have, on average, higher abilities (based on the Armed Forces Qualification Test, or AFQT) compared to college graduates who enter the labor market in a good economy. Both the NLSY (1979 through 1989) and CPS (1979 through 1997) analyses showed, after accounting for a worker's aptitude, that wages declined by about 5% in the first three years of the worker's career. Workers sustained slightly lower wage losses in subsequent years.

Conclusion

This report provided an overview of the youth employment situation. It showed that over time, teens and young adults were less likely to be employed than older workers. This is likely the result of their relative lack of work experience, lower levels of education, and frequent movement in and out of the labor force. Perhaps most striking is that the E/P ratio for youth, especially for teens, has eroded over the past decade—even in years when the economy was growing. The teen E/P ratio has been below 40% since 2002. This suggests a fairly recent long-term decline in teen employment, due to dismal employment prospects and youth withdrawing from the labor force to pursue educational opportunities. While the E/P ratio trend line for 20- to 24-year-olds has been higher and more stable, the employment gains for this population have also been erased. At the start of the decade, the E/P ratio for young adults was about 72%, and by 2014 this rate dropped to about 63.0%. Further, youth unemployment had been at its highest recorded levels until recently. The American ethos that future generations can earn more and live more comfortably than their parents may be out of reach for many youth today.55 Additional research is needed on the effects of recent long-term youth unemployment. Such research could focus on how the current generation of young workers compares in terms of employment and wages to past generations of young workers who entered the labor force during downturns in the economy.

Appendix. Supplemental Tables and Figures

Table A-1. Labor Force Participation of Youth Ages 16-19 by RaceSex and Race/Ethnicity:
2000, 2007, 20122014, and 2017, and 2014

Not seasonally adjusted

 

2000

2007

2012

2014

Absolute Change from
2000-2014
(Percentage Points)
a

2014

2017

Relative ChangeChange from 2000 to 2017 from
2000-2014
(Percentage)

Absolute Change from 2012-2014
(Percentage Points)

Relative Change from 2012-2014 (Percentage)

2014 to 2017

Labor Force Participation Rate

 

 

All

52.0

%

41.3

34.3

34.0

-18.0

%

34.0%

-34.635.2%

-0.3

32.3%

-0.93.5%

Male

52.8

41.1

34.0

33.5

-19.3

-36.6%

33.5

34.6

-034.5

-1.5%

3.3

Female

51.2

41.5

34.6

34.5

-16.7

35.9

-32.6%

29.9

-0.1

-0.3%

4.1

White

55.5

44.4

36.9

36.2

-19.3

-34.8%

2

36.8

-033.7

-1.9%

1.7

Black

39.4

30.3

26.9

27.2

-12.2

30.0

-31.0%

23.9

010.3

1.1%

Hispanic

46.3

37.1

30.9

30.3

-16.0

31.9

-34.6%

-0.6

31.1

-1.9%

5.3

Asian

35.8

24.5

20.1

21.0

-14.8

23.5

-41.3%

34.4

011.9

4.5%

E/PEmployment-Population Ratio Ratio

 

 

 

 

 

 

 

 

All

45.2

34.8

26.1

27.3

-17.9

30.3

-39.6%

33.0

1.2

4.6%

11.0

Male

45.4

33.9

24.9

26.3

-19.1

29.2

-42.1%

35.7

1.4

5.6%

11.0

Female

45.0

35.8

27.3

28.4

-16.6

31.4

-36.9%

1.1

30.2

4.0%

10.6

White

49.1

38.3

29.0

9

29.9

32.3

-1934.2

-39.1%

0.9

3.1%

8.0

Black

29.8

21.4

16.6

18.2

-11.6

22.8

-38.9%

1.6

23.5

9.6%

25.3

Hispanic

38.6

30.4

22.1

23.5

-1527.1

-39.1%

29.8

1.4

6.3%

15.3

Asian

30.7

21.4

15.9

18.1

-12.6

20.8

-41.0%

232.2

13.8%

14.9

Unemployment Rate

 

 

 

 

 

All

13.1

15.7

24.0

19.6

6.5

14.0

49.6%

-4.4

6.9

-18.3%

28.6

Male

14.0

17.6

26.8

21.4

7.4

15.5

52.9%

10.7

-5.4

-20.1%

27.6

Female

12.1

13.8

21.1

17.7

5.6

12.5

46.3%

3.3

-329.4

-16.1%

White

11.4

13.9

21.5

17.3

5.9

12.2

51.8%

7.0

-4.2

-19.5%

29.5

Black

24.5

29.4

38.3

33.0

8.5

34.7%

24.0

-5.3

2.0

-13.8%

27.3

Hispanic

16.6

18.1

28.6

22.5

5.9

15.0

35.5%

-6.1

-9.6

-21.3%

33.3

Asian

14.2

12.7

20.8

14.0

-0.2

-1.4%

14.0

11.5

-6.8

19.0

-32.7%

17.9

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: The labor force participation rate is the percentage of individuals in the population who arewere employed and unemployed (those who are not employed and not looking for work are out of the labor force). Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The unemployment rate is the percentage of individuals in the labor force who arewere jobless, looking for jobs, and available for work. Persons of Hispanic origin can be of any race and individuals of any race may be Hispanic.

a. Absolute change refers to the percentage point change from 2000 to 2014 and is derived by subtracting 2014 data from 2000 data. Relative change refers to the percentage change over the same periodperiod referenced and is derived by subtracting 20142017 data from 2000 or 2014 data and then dividing that number by the 2000 or 2014 data.data.

Table A-2. Labor Force Participation of Youth Ages 20-24 by RaceSex and Race/Ethnicity:
2000, 2007, 20122014, and 2017, and 2014

Not seasonally adjusted

0.7%

Change
from
2000-2014
(Percentage)

1.2

3.9

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: The labor force participation rate is the percentage of individuals in the population who were employed and unemployed (those who are not employed and not looking for work are out of the labor force). Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The unemployment rate is the percentage of individuals in the labor force who were jobless, looking for jobs, and available for work. Relative change refers to the percentage change over the period referenced and is derived by subtracting 2017 data from 2000 or 2014 data and then dividing that number by the 2000 or 2014 data.

Table A-3. Percentage of Young Adults Ages 25-29 Who Completed High School or College, by Sex and Race/Ethnicity: 2000, 2007, and 2016   Relative Changefrom 2000 to2016                  

N/A

 

2000

2007

2012

2014

 2014

2017

AbsoluteRelative Change
from 2000 to 2017from
2000-2014
(Percentage Points)a

Relative Change from 2014 to 2017

Labor Force Participation Rate

All

77.8%

74.4%

70.8%

71.3%

-8.4%

Absolute Change
from
2012-2014
(Percentage Points)

Relative Change
from
2012-2014
(Percentage)

Labor Force Participation Rate

 

 

All

Male

77.8

82.6

74.4

78.7

7073.9

70.8

74.1

-6.9

10.3

-9.0%

0.3

Female

-073.1

-0.1%

70.0

67.7

68.5

-6.3

Male

White

82.6

79.9

78.7

76.4

74.5

73.0

73.9

1

-8.1

-10.5%

-0.6

-0.8%

5

0.1

Black

71.8

68.3

66.6

69.2

-3.6

Female

Hispanic

73.1

78.2

70.0

74.8

6771.4

67.7

71.0

-5.7

9.2

-7.4%

0.3

0.4%

White

79.9

76.4

73.1

73.0

-6.8

-8.6%

-0.1

-0.1%

Black

71.8

68.3

66.5

66.6

-5.3

-7.2%

0.1

0.2%

Hispanic

78.2

74.8

71.2

71.4

-7

-8.7%

0.2

0.3%

Asian

63.0

59.7

52.8

54.3

-10.2

-13.8%

1.5

2.8%

E/P Ratio

 

 

 

 

 

 

 

All

72.2

68.4

61.5

62.9

-10.7

-12.9%

1.4

2.3%

Male

76.6

71.7

63.8

64.9

-12.8

-15.3%

1.1

1.7%

Female

67.9

65.0

59.2

60.9

-8.7

-10.3%

1.7

2.9%

White

75.2

71.0

64.8

66.8

-10.4

-11.2%

2.0

3.1%

Black

61.0

57.9

51.1

53.2

-9.9

-12.8%

2.1

4.1%

Hispanic

72.4

69.0

61.3

63.5

-11.1

-12.3%

2.2

3.6%

Asian

58.6

56.4

47.3

48.0

-11.3

-18.1%

0.7

1.5%

Unemployment Rate

 

 

All

7.2

8.2

13.3

11.2

6.1

55.6%

-2.1

-15.8%

Male

7.3

8.9

14.3

12.2

7

67.1%

-2.1

-14.7%

Female

7.1

7.3

12.1

10.1

5

42.3%

-2.0

-16.5%

White

5.9

7.0

11.4

9.1

5.5

54.2%

-2.3

-20.2%

Black

15

15.2

23.1

20.2

8.1

34.7%

-2.9

-12.6%

Hispanic

7.5

7.8

13.8

11.1

6.3

48.0%

-2.7

-19.6%

Asian

6.9

5.6

10.5

11.5

3.6

66.7%

1.0

9.5%

0.6

Asian

63.0

59.7

54.3

53.5

-15.1

-1.5

Employment-Population Ratio

All

72.2

68.4

62.9

66.0

-8.6

4.9

Male

76.6

71.7

64.9

67.9

-11.4

4.6

Female

67.9

65.0

60.9

64.2

-5.4

5.4

White

75.2

71.0

66.4

68.4

-9.0

3.0

Black

61.0

57.9

53.2

61.3

0.5

15.2

Hispanic

72.4

69.0

63.5

65.6

-9.4

3.3

Asian

58.6

56.4

48.0

49.6

-15.4

3.3

Unemployment Rate

All

7.2

8.2

11.2

7.4

2.8

-33.9

Male

7.3

8.9

12.2

8.4

15.1

-31.1

Female

7.1

7.3

10.1

6.3

-11.3

-37.6

White

5.9

7.0

9.1

6.5

10.2

-28.6

Black

15

15.2

20.2

11.5

-23.3

-43.1

Hispanic

7.5

7.8

11.1

7.6

1.3

-31.5

Asian

6.9

5.6

11.5

7.2

4.3

-37.4

Total

Non-Hispanic White

Black

Hispanic

Asian

Educational Attainment by Year

Males

Females

Males

Females

Males

Females

Males

Females

Males

Females

High School

2000

86.7%

89.4%

92.9%

95.2%

86.6%

85.3%

59.2%

66.4%

N/A

N/A

2007

84.9

89.1

92.7

94.2

87.0

87.8

60.5

70.7

95.8%

98.5%

2016

90.9

92.5

94.8

95.7

90.8

90.4

85.8

88.4

95.9

97.1

4.8

3.5

2.1

0.5

4.9

6.0

44.9

33.1

N/A

N/A

College

2000

27.9

30.1

32.3

35.8

18.1

17.0

8.3

11.0

N/A

N/A

2007

26.3

33.0

31.9

39.2

17.9

19.9

8.6

15.4

59.8

62.0

2016

32.7

39.5

39.5

46.3

20.2

25.0

24.0

30.8

60.3

68.8

Relative Change from 2000 to 2016

17.2

31.2

22.3

29.3

11.6

47.1

189.2

180.0

N/A

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

Notes: The labor force participation rate is the percentage of individuals in the population who are employed and unemployed (those who are not employed and not looking for work are out of the labor force). Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The unemployment rate is the percentage of individuals in the labor force who are jobless, looking for jobs, and available for work.

a. Absolute change refers to the percentage point change from 2000 to 2014 and is derived by subtracting
2014 data from 2000 dataCommerce, Census Bureau, Educational Attainment in the United States: 2016, Table A-2, "Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years: 1940 to 2016." Note: N/A means not available. College attainment refers to a bachelor's degree or higher. Relative change refers to the percentage change over the same periodperiod referenced and is
derived by subtracting 20142016 data from 2000 data and then dividing that number by the 2000 data.

Figure A-1. Labor Force Trends for Youth Ages 16-19

Not seasonally adjusted

, 1948-2017

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey,

. Shaded areas denote periods of recession.

Notes: The labor force participation rate is the percentage of individuals in the population who arewere employed and unemployed (those who are not employed and not looking for work are out of the labor force). Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The unemployment rate is the percentage of individuals in the labor force who arewere jobless, looking for jobs, and available for work. Persons of Hispanic origin can be of any race and individuals of any race may be Hispanic.

Figure A-2. Labor Force Trends for Youth Ages 20-24

Not seasonally adjusted

, 1948-2017

Source: Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey,

. Shaded areas denote periods of recession.

Notes: The labor force participation rate is the percentage of individuals in the population who arewere employed and unemployed (those who are not employed and not looking for work are out of the labor force). Employment-population ratios represent the percentage of the non-institutionalized population who were employed. The unemployment rate is the percentage of individuals in the labor force who arewere jobless, looking for jobs, and available for work.

Author Contact Information

Adrienne L. Fernandes-Alcantara, Specialist in Social Policy ([email address scrubbed], [phone number scrubbed])
Acknowledgments

The author would like to thank CRS colleagues [author name scrubbed]Gene Falk, Specialist in Social Policy; David H. Bradley, Specialist in Labor Economics; [author name scrubbed]Abigail R. Overbay, Information Research Specialist; [author name scrubbed]and Thomas Gabe, Specialist in Social Policy (now retired); and [author name scrubbed], Specialist in Social Policy for their assistance with developing this for their assistance with developing this report. Research Assistants Jameson A. Carter and Emma Sifre provided valuable assistance with updating the report. report.

Footnotes

Briefly, the labor force participation rate is the percentage of individuals in the population who are employed and who are unemployed. The employment-to-population (E/P)population ratio, is the proportion of individuals in the general U.S. population who are employed. The unemployment rate is the share of individuals in the labor force who are unemployed. (Note (note that the denominatordenominators for the E/Pemployment-population ratio and the unemployment rate are different).

.) The Fair Labor Standards Act (FLSA) sets 14 as the minimum age for employment and limits the number of hours worked by minors under the age of 16.

7. 11. 15. 19. DOC, Census Bureau, Educational Attainment in the United States: 2016. See also, Howard N. Fullerton, Jr., "Labor Force Participation: 75 Years of Change, 1950-98 and 1998-2025," DOL, BLS, Monthly Labor Review, December 1999, p. 6. In this analysis, which predated collection of data on Asian individuals via the Current Population Survey (CPS)CPS, labor force data for Asian youth were combined with individuals who were not identified as white or black. These data were derived by subtracting "black" from the "black and other" group.

27. 32. T. Alan Lacey, Mitra Toossi, Kevin S. Dubina, and Andrea B. Gensler, "Projections Overview and Highlights, 2016–26; Maria E. Canon, Marianna Kudlyak, and Yang Liu, "Youth Labor Force Participation Continues to Fall, but It Might Be for a Good Reason.

"38.

The absolute and relative changes for Asian youth are based on 2007 and 2016 data because 2000 data are not available.

See, for example, Katherine M. O'Regan and John M. Quigley, "Where Youth Live: Economic Effects of Urban Space on Employment Prospects," Urban Studies, vol. 35, no. 7 (1998); and Steven Raphael, "Inter- and Intra-Ethnic Comparisons of the Central City-Suburban Youth Employment Differential," Industrial & Labor Relationship Review, vol. 51, no. 3 (April 1998).

46. Jaison R. Abel, Richard Deitz, and Yaqin Su, "Are Recent College Graduates Finding Good Jobs?," Federal Reserve Bank of New York, Current Issues in Economics and Finance, vol. 20, no. 1, 2014.

1.

Neil Irwin, "Aughts were a Lost Decade for U.S. Economy, Workers," Washington Post, January 2, 2010.

2.
23. T. Alan Lacey, Mitra Toossi, Kevin Dubina, and Andrea Gensler, "Projections Overview and Highlights, 2016–26," U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS), Monthly Labor Review, October 2017 (hereinafter, T. Alan Lacey, Mitra Toossi, Kevin Dubina, and Andrea Gensler, "Projections Overview and Highlights, 2016–26.");.

For further information about programs and policy responses, see Congressional Research Service, Issues Before Congress, Employment and Training Policy and Economic Recovery, Growth, and Jobs, http://crs.gov/Pages/subissue.aspx?cliid=489&parentid=4&Preview=False.

3.

Congressional Research Service (CRS), based on data from U.S. Department of Labor, Bureau of Labor Statistics (BLS), Current Employment Statistics (CES) Survey. The percent change in total nonfarm employment between the first and last year of the 1940s-2000s period by decade is as follows: 1940s, 35.3%; 1950s, 17.9%; 1960s, 29.9%; 1970s, 26.7%; 1980s, 19.3%; 1990s, 17.8%; 2000s, -1.5%.

4.

Neil Irwin, "Aughts were a Lost Decade for U.S. Economy, Workers," Washington Post, January 2, 2010.

5.

Maria E. Canon, Marianna Kudlyak, and Yang Liu, "Youth Labor Force Participation Continues to Fall, but It Might Be for a Good Reason,," Federal Reserve Bank of St. Louis, The Regional Economist, January 2015. (Hereinafter; (hereinafter, Maria E. Canon, Marianna Kudlyak, and Yang Liu, "Youth Labor Force Participation Continues to Fall, but It Might Be for a Good Reason.)

6.

Sandy Baum, Higher Education Earnings Premium: Value, Variation, And Trends, Urban Institute, February 2014.

7.

Hope Yen, "1 in 2 New College Grads Jobless or Underemployed," The Associated Press, April 24, 2012; Jennifer 8. Lee, "Generation Limbo: Waiting It Out," New York Times, August 31, 2011; and Adam Clark Estes, "More Signs That American Youth are a Lost Generation," The Atlantic Wire, September 22, 2011.

8.

Jasion R. Abel, Richard Dietz, and Yaqin Su, Are Recent College Graduates Finding Good Jobs?, Federal Reserve Bank of New York, Current Issues in Economics and Finance, vol. 20, no. 1, 2014.

9.

The Fair Labor Standards Act (FLSA) sets 14 years of age "); Teresa L. Morisi, "Teen Labor Force Participation Before and After the Great Recession and Beyond," DOL, BLS, Monthly Labor Review, February 2017 (hereinafter, Teresa L. Morisi, "Teen Labor Force Participation Before and After the Great Recession and Beyond."); Teresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates," DOL, BLS, Monthly Labor Review, May 2010, p. 32 (hereinafter, Teresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates.")

4.

DOL, BLS, "Employment Projections 2016-26," press release, October 24, 2017. See also, Anthony P. Carnevale, Nicole Smith, and Jeff Strohl, Recovery: Projections of Jobs and Education Requirements Through 2020, Georgetown University, Center on Education and the Workforce, June 2013.

5.
106.

For further information on the transition to adulthood, see CRS Report RL33975, Vulnerable Youth: Background and Policies.

Arguably, the age of youth could be even higher than 24. For example, the Patient Protection and Affordable Care Act (P.L. 111-148) uses the age ofage 26. Specifically, the law requires health insurance companies to provide coverage to the children of parents who are enrolled in their health care plans up to their 26th birthday. It also providesprovided a new Medicaid pathway, effective January 2014, for children who age out of foster care up to their 26th birthday.

118.

For further information on the transition to adulthood, seeSee CRS Report RL33975, Vulnerable Youth: Background and Policies, by [author name scrubbed].

R44746, Background and Federal Efforts on Summer Youth Employment.
129.

For further discussion, see CRS Report R40535, Disconnected Youth: A Look at 16- to 24- Year Olds Who Are Not Working or In School, by [author name scrubbed] and [author name scrubbed]. See also. See also, Gordon L. Berlin, Frank F. Furstenberg, Jr., and Mary C. Waters, "Introducing the Issue," Future of Children Volume on the Transition to Adulthood, vol. 20, no. 1 (Spring 2010), pp. 1-17.

13.

Laura Wray-Lake et al., "Exploring the Changing Meaning of Work for American High School Seniors From 1976 to 2005," Youth & Society, vol. 43, no. 3, 2011, pp. 1110-1135.

14.

U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey; Earnings and Unemployment Rates by Educational Attainment, April 2, 2015, http://www.bls.gov/emp/ep_chart_001.htm.

15.

Emily Richards and David Terkanian, "Occupational Employment Projections to 2022," Monthly Labor Review, vol. 135, no. 1 (December 2013), http://www.bls.gov/opub/mlr/2013/article/occupational-employment-projections-to-2022.htm. See also, Anthony P. Carnevale, Nicole Smith, and Jeff Strohl, Help Wanted: Projections of Jobs and Education Requirements through 2018, Georgetown University, Center on Education and the Workforce, June 2010, http://cew.georgetown.edu/JOBS2018/.

16.

Anthony P. Carnevale et al., Career Cluster: Forecasting Demand for High School Through College Jobs 2008-2018, November 2011, http://cew.georgetown.edu/clusters/.

17, vol. 20, no. 1 (Spring 2010), pp. 1-17.
10.

Board of Governors of the Federal Reserve System, Experiences and Perspectives of Young Workers, December 2016.

The terms used in this report are defined by the U.S. Department of Labor, Bureau of Labor Statistics,DOL, BLS, in its "Glossary," http://www.bls.gov/bls/glossary.htm.

."
1812.

BLS also counts workers who are "unpaid family workers," which includes any person who worked without pay for 15 hours or more per week in a family-owned enterprise operated by someone in their household. Unpaid family workers comprise a relatively small proportion of total employment.

1913.

The denominatordenominators for the E/Pemployment-population ratio and the unemployment rate are different. When restricted to youth, the denominator for the E/Pemployment-population ratio is youth in the labor force and the denominator for unemployment is youth in the civilian non-institutionalized population. Youth refers to young people ages 16-19, 20-24, or 16-24.

2014.

For further information about the employment-population ratio as a labor market indicator, see CRS Report R44055, An Overview of the Employment-Population Ratio.

For further information, see CRS Report R42063, Economic Growth and the Unemployment Rate, by [author name scrubbed].

21.

Maria E. Canon, Marianna Kudlyak, and Yang Liu, Youth Labor Force Participation Continues to Fall, but It Might Be for a Good Reason; and Theresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates," U.S. Department of Labor, Monthly Labor Review, May 2010, p. 32. (Hereinafter Theresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates," May 2010.)

22.

See, for example, Catherine Rampell, "'Great Recession': A Brief Etymology," New York Times (Internet edition), March 11, 2009, available at http://economix.blogs.nytimes.com/2009/03/11/great-recession-a-brief-etymology/.

23.

The data are not seasonally adjusted, meaning that they have not been adjusted to account for seasonality in employment and unemployment rates.

2416.

These periods are November 1948 (quarter IV) to October 1949 (IV);, July 1953 (II) to May 1954 (II);, August 1957 (III) to April 1958 (II);, April 1960 (II) to February 1961 (I);, December 1969 (IV) to November 1970 (IV);, November 1973 (IV) to March 1975 (I);, January 1980 (I) to July 1980 (III);, July 1981 (III) to November 1982 (IV);, July 1990 (III) to March 1991 (I);, March 2001 (I) to November 2001 (IV);, and December 2007 (IV) to June 2009 (II). See National Bureau of Economic Research, "U.S. Business Cycle Expansions and Contractions," http://www.nber.org/cycles/cyclesmain.html.

.
2517.

Maria E. Canon, Marianna Kudlyak, and Yang Liu, "Youth Labor Force Participation Continues to Fall, but It Might Be for a Good Reason"; and Teresa L. Morisi, "Teen Labor Force Participation Before and After the Great Recession and Beyond." See also, U.S. Department of Education (ED), National Center for Education Statistics, Projections of Education Statistics to 2024, Figure 16, "Actual and Projected Numbers for Total Enrollment in All Postsecondary Degree-Granting Institutions, By Age Group, Sex and Attendance Status: Fall 1995 through Fall 2024," 2016 (hereinafter, ED, NCES, Projections of Education Statistics to 2024).

18.

Teresa L. Morisi, "Teen Labor Force Participation Before and After the Great Recession and Beyond"; and Teresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates."

U.S. Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2022, Table 21, "Actual and projected numbers for total enrollment in all postsecondary degree-granting institutions, by age group, sex and attendance status: Fall 1995 through Fall 2022," 2014, https://nces.ed.gov/pubs2014/2014051.pdf.

26.

Theresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates," May 2010.

27.

From 1948 to 1978, the labor force participation of teen females increased by 11 percentage points from 42.0% to 53.7%. It peaked at 53.9% in 1989 and remained between 49% and 51% until the 2000s, when it began to decline and ultimately reached less than 40% in some subsequent years. Also from 1948 to 1978, the labor force participation of young adult females increased by 23 percentage points from 45.3% to 68.3%. It peaked at 73.2% in 1999 and decreased slightly in subsequent years.

28.

U.S. Department of Commerce, Census Bureau, Annual Social and Economic Supplement to the Current Population Survey, Table A-2, "Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years 1940 to 2014." (Hereinafter, U.S. Department of Commerce, Census Bureau, "Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years 1940 to 2014.")

29.

Francine D. Blau, "Women's Economic Well-Being, 1970-1995: Indicators and Trends," Focus, vol. 20, no. 1 (Winter 1998-1999), pp. 6-8.

30.

The statistics are available in the following age categories: 16 and 17, 18 and 19, 20 and 21, and 22 to 24. For each of these age categories, females are more likely than males to be enrolled in school, particularly among those ages 18 through 21. U.S. Department of Education, National Center for Education StatisticsED, NCES, Digest of Education Statistics: 20122016, Table 6103.10, "Percentage of the Population 3 to 34 Years Old Enrolled In School, by Sex, Race/Ethnicity, and Age: Selected years, 1980 through 2011," June 20122015," July 2016; and Table 221303.10, "Total Fall Enrollment in Degree-Granting Institutions, by Attendance Status, Sex of Student, and Control of Institution: Selected Years, 1947 through 2011," June 2012, http://nces.ed.gov/programs/digest/2012menu_tables.asp2026," February 2017.

3120.

U.S. Department of Commerce, U.S. Census Bureau (DOC), Census Bureau, Educational Attainment in the United States: 2016, Table A-2, "Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years 1940 to 2014."

2016" (hereinafter, DOC, Census Bureau, Educational Attainment in the United States: 2016.)
3221.

U.S. Department of Commerce, Census Bureau, "Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years 1940 to 2014."Ibid.

22.

Francine D. Blau, "Women's Economic Well-Being, 1970-1995: Indicators and Trends," Focus, vol. 20, no. 1 (Winter 1998-1999), pp. 6-8.

23.
3324.

Ibid.

3425.

In 2014, the overall unemployment rate was 6.2%, the employment-population ratio was 59%, and the labor force participation rate was 62.9%. The drop in the unemployment rate appears to be due to increased employment that has outpaced growth in the labor force.

26.

From 2000 to 2007, labor force participation among youth decreased from 66% to 59%, their employment-population ratio fell from 60% to 53%, and their unemployment rate increased from 9% to 11%.

Andrew Sum et al., The Plummeting Labor Market Fortunes of Teens and Young Adults, Brookings Institution, March 2014, http://www.brookings.edu/~/media/research/files/reports/2014/03/14-youth-workforce/youth_workforce_report_final.pdf.

35.

See CRS Report R41332, Economic Recovery: Sustaining U.S. Economic Growth in a Post-Crisis Economy, by [author name scrubbed] for a discussion of measuring decline and recovery in the most recent recession.

36.

Congressional Budget Office, The Slow Recovery of the Labor Market, pp. 1-3, February 2014, https://www.cbo.gov/sites/default/files/45011-LaborMarketReview.pdf.

.
3728.

Congressional Budget Office, The Budget and Economic Outlook: 2015 to 2025, January 2015, pp. 27-29, https://www.cbo.gov/sites/default/files/cbofiles/attachments/49892-Outlook2015.pdf.

2017 to 2027, June 2017.
3829.

TheresaTeresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates," May 2010. ." The research literature is somewhat mixed about the extent to which older workers displace younger workers. Some research shows that older workers are not exiting the labor force but have instead increased their participation, which may make it more difficult for workers with less experience to compete. See, for example, Neeta P. Fogg and Paul E. Harrington, "Rising Demand for Older Workers Despite the Economic Recession: Accommodation and Universal Design for the New American Workforce," Public Policy & Aging Report, vol. 21, no. 2 (Winter 2011), pp. 11-13. This analysis concluded that employers substituted older workers for younger workers during the recent recession. It shows that from December 2007 to December 2010, the rise in unemployment among workers 55 and older was countered by their increased entry into the labor market. Further, younger workers ages 16 through 24 had a decline in labor force participation and experienced a greater decrease in their E/Pemployment-population ratio than did older workers.

Other analyses show that the employment of older workers does not reduce employment opportunities for younger workers. This research asserts that the "lump of labor" theory—that there is a fixed amount of labor—is false, and that the labor market is flexible and can adapt to changes in economic conditions. One study shows that higher E/Pemployment-population ratios among older persons "leads to better outcomes for the young in the form of reduced unemployment, increased employment, and a higher wage." Alicia H. Munnell and April Yanyuan Wu, "Will Delayed Retirement By the Baby Boomers Lead to Higher Unemployment Among Younger Workers, Boston College,," Center for Retirement Research, Boston College, October 2012, http://crr.bc.edu/working-papers/will-delayed-retirement-by-the-baby-boomers-lead-to-higher-unemployment-among-younger-workers/October 2012. See also, The Economist, "Keep on Trucking: Why the old should not make way for the young," February 11, 2012, http://www.economist.com/node/21547263/print.

3930.

Christopher L. Smith, "Polarization, Immigration, Education: What's Behind the Dramatic Decline in Youth Employment?" Federal Reserve Board, Divisions of Research and Statistics, and Monetary Affairs, October 2011; and Stephanie Aaronson et al., "Labor Force Participation: Recent Development and Future Prospects," Brookings Papers on Economic Activity, Fall 2014.

31.

Such factors include the characteristics of incoming immigrant workers and how they compare to workers in a country's existing labor pool, the degree to which new immigrants and existing workers compete for jobs in the same labor markets, how employers respond to the new labor supply, macroeconomic considerations, and other factors. See National Academies of Sciences, Engineering, and Medicine, The Economic and Fiscal Consequences of Immigration, ed. Francine D. Blau and Christopher Mackie (Washington, DC: The National Academies Press, 2016).

Jonathan R. Veum and Andrea B. Weiss, "Education and the Work Histories of Young Adults," Monthly Labor Review, April 1993, http://www.bls.gov/opub/mlr/1993/04/art2full.pdf.

40.

The NLSY is part of BLS' National Longitudinal Surveys program, which surveys cohorts of workers over time. The primary focus of the survey is on the employment experiences of respondents and other experiences related to employment, including education, training, marital status, fertility, participation in government assistance programs, income, and assets. The research discussed above and elsewhere in this report that references the NLSY is based on the 1979 cohort, who were ages 14-22 when the survey began. A somewhat younger group (ages 12-17) began to be surveyed in 1997.

41.

Julie A. Yates, "The Transition from School to Work: Education and Work Experiences," Monthly Labor Review, February 2005; and Jacob Alex Klerman and Lynn A. Karoly, "Young Men and the Transition to Stable Employment," Monthly Labor Review, August 1994.

42.

Maria E. Canon, Marianna Kudlyak, and Yang Liu, "Youth Labor Force Participation Continues to Fall, but It Might Be for a Good Reason.

"
43.

A more recent analysis shows that school attendance for 16-to-24-year olds without a high school diploma increased from 38% in 1998 to 60% in 2014. Among 16-to-19-year olds, the rates were 39.8% and 58.5%, respectively. Still, some youth were not in school or working. This includes 6.1% of 16-19-year olds and 9.2% of 20-to-24-year olds. See, 33.

Steven W. Hemelt and Dave E. Marcotte, "The Changing Landscape of Tuition and Enrollment in American Public Higher Education," The Russell Sage Foundation Journal of the Social Sciences, vol. 2, no. 1, pp. 42-68.

34.

ED, NCES, Digest of Education Statistics: 2016, Table 103.10, "Percentage of the Population 3 to 34 Years Old Enrolled In School, by Age Group: Selected years, 1940 through 2015," July 2016.

35.
4436.

Teresa L. Morisi, "Teen Labor Force Participation Before and After the Great Recession and Beyond." CRS similarly found that 92% of youth ages 16 to 19 cited school as the main reason they were out of the labor force in 2016. Approximately 66% of young adults ages 20 to 24 cited the same.

37.

DOL, BLS, More Education: Lower Unemployment, Higher Earnings, March 2018.

U.S. Department of Education, National Center for Education Statistics (NCES), Digest of Education
Statistics: 2013, "Table 103.20, Percentage of the Population 3 to 34 Years Old Enrolled in School, By Age Group:
Selected Years, 1940 Through 2012," December 2013.

45.

Theresa L. Morisi, "The early 2000s: A Period of Declining Summer Teen Employment Rates," May 2010.

46.

Anthony P. Carneval, Nicole Smith, and Jeff Strohl, Jobs Wanted: Projections of Jobs and Education Requirements Through 2018, Georgetown University, Center on Education and the Workforce, June 2010, http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/FullReport.pdf.

.
39.
4740.

Steven R. Holloway and Stephen Mulherin, "The Effect of Adolescent Neighborhood Poverty on Adult Employment," Journal of Urban Affairs, vol. 26, no. 4 (June 2004).

Though not discussed here, youth may withdraw from the labor force or decline to participate altogether because of a disability; however, this has not been fully explored in the research literature.
4841.

Bruce A. Weinberg, Patricia B. Reagan, and Jeffrey J. Yankow, "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data," Journal of Labor Economics, vol. 22, no. 4 (2004). (Hereinafter, Weinberg, Reagan, and Yankow, "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data.")

49.

See for example, Weinberg, Reagan, and Yankow, "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data;" See CRS Report R44746, Background and Federal Efforts on Summer Youth Employment.

42.

George Galster, Anna Santiago, and Jessica Lucero, "Employment of Low-Income African American and Latino Teens: Does Neighborhood Social Mix Matter," Housing Studies, vol. 30, no. 2 (2015), pp. 192-227.

43.

Raj Chetty and Nathaniel Hendren, The Impacts of Neighborhoods on Intergenerational Mobility II: County Level Estimates, National Bureau of Economic Research, Working Paper 23002, December 2016, revised May 2017.

44.
5045.

Abigail Wozniak, "Coming and Going: Encouraging Geographic Mobility at College Entry and Exit to Life Wages," in Revitalizing Wage Growth, ed. Jay Shambaugh and Ryan Nunn (Washington, DC: The Hamilton Project, 2018), pp. 77-92.

At least one study, from the United Kingdom, has found evidence that spells of unemployment affect wages as well as non-labor market outcomes many years later. These other outcomes include happiness, job satisfaction, wages, and health. The study also found that youth unemployment involved significant social and economic costs. See David N.F. Bell and David G. Blanchflower, What Should Be Done about Rising Unemployment in the U.K?, Institute for the Study of Labor, Discussion Paper No. 4040, February 2009, http://www.operationspaix.net/sites/politiquessociales.net/IMG/pdf/dp4040.pdf.

5147.

Thomas A. Mroz and Timothy H. Savage, "The Long-Term Effects of Youth Unemployment," Journal of Human Resources, vol. 41, no. 2 (Spring 2006), pp. 259-293.

5248.

Stefano Scarpetta, Anne Sonnet, and Thomas Manfredi, Rising Youth Unemployment During the Crisis: How to Prevent Negative Long-Term Consequences on a Generation?, Organisation for Economic Co-operation and Development (OECD), OECD Social, Employment and Migration Papers, No. 106, April 14, 2010, pp. 14-17, http://www.oecd.org/document/49/0,3343,en_21571361_44315115_45008113_1_1_1_1,00.html.

53.

Lisa B. Kahn, The Long-Term Labor Market Consequences of Graduating from College in a Bad Economy, Yale School of Management, August 13, 2009.

54.

Hani Mansour, The Career Effects of Graduating From College in a Bad Economy: The Role of Workers' Ability, University of Colorado, Denver and DIW Berlin, November 2009.

55.

Eugene Steuerle et al., Lost Generations? Wealth Building Among Young Americans, Urban Institute, March 2013, http://www.urban.org/UploadedPDF/412766-Lost-Generations-Wealth-Building-Among-Young-Americans.pdfLisa B. Kahn, "The Long-Term Labor Market Consequences of Graduating from College in a Bad Economy," Labour Economics, vol. 17, no. 2 (201), pp. 303-316. See also Joseph G. Altonji, Lisa B. Kahn, and Jamin D. Speer, "Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success," Journal of Labor Economics, vol. 34, no. S1 (January 2016).

49.