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Uncertain futures?: youth attachment to the labor market in the United States and New England

Julia Dennett and Alicia Modestino

No 13-3, New England Public Policy Center Research Report from Federal Reserve Bank of Boston

Abstract: In the wake of the Great Recession, high levels of unemployment and low labor force participation rates among U. S. youth are of great concern, receiving considerable attention from policy makers and the popular press. These trends have led observers to question what the future path of employment will look like for younger workers. Of particular concern is the share of the youth population that is idle, or what is technically termed ?not in employment, education, or training? (NEET). These individuals are particularly vulnerable to continued adverse labor market outcomes and their prolonged detachment may result in significant individual and social costs. This report analyzes data from multiple sources to trace trends in labor force attachment among youth over the past two decades and quantify the contributing forces that may be driving observed declines in labor force attachment. The data indicate that while all youth were affected by the Great Recession, teens experienced a decline in labor force attachment even prior to the most recent downturn. Between 2000 and 2006, the U. S. economy employed fewer teens within almost all industries and occupations. This trend continued during the Great Recession and subsequent recovery ? suggesting continued uncertainty for youth in the labor market. Yet contrary to conventional wisdom, youth did not become increasingly idle prior to the Great Recession, largely due to rising school enrollment. The share of youth not employed and not in school is no higher than it was two decades ago in the years just after the 1990-1991 recession. To inform regional policymakers, trends for the New England region are discussed throughout the report, specifically when trends for the region differ from those observed nationally. The report concludes with a discussion of the role that public policy could play in addressing the labor market challenges that youth face today.

Pages: 44 pages
Date: 2013-12-01
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