Youth Employment and Training Programs The YEDPA Years (1985) / Chapter Skim
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2 Youth Employment and Unemployment
2 Youth Employment and Unemployment
Pages 34-68
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From page 34... ...
Table 2.lb, which compares the unemployment rates for young white males with other youths, shows that nonwhite females aged 20-24 were 1.7 times as likely as white males to be unemployed in 1957; by 1984 they were 2.4 times as likely to be unemployed. In contrast, white females have in most years been less likely to be unemployed than white 34
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From page 35... ...
1964, and 1978 were selected because in each of these years the unemployment rate for white males aged 35-44 was an identical 2.5 percent and the business cycle was about at its peak; 1984 was selected to provide a view of recent youth unemployment. aNo data for persons of Hispanic origin are available for 1957 or 1964.
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From page 36... ...
36 TABLE 2.lb Ratios Between Unemployment Rates for Young White Males and Other Groups Year _ 1957 1964 1978 1984 Group White males 16-17 years old1.01.0 1.01.0 18-19 years old1.01.0 1.01.0 20-24 years old1.01.0 1.01.0 Nonwhite males 16-17 years old1.411.61 2.362.02 18-19 years old1.741~72 2.842.57 20-24 years old1.791.70 2.602.50 Hispanic males 16-17 years oldaa 1.631.52 18-19 years oldaa 1.291.44 20-24 years oldaa 2.601.23 White females 16-17 years old1.031.06 1.01.90 18-19 years old.69.99 1.15.91 20-24 years old.72.96 1.08.90 Nonwhite females 16-17 years old1.592.27 2.462.14 18-19 years old1.852.18 3.362.44 20-24 years old1.712.47 2.772.40 Hispanic females 16-17 years oldaa 1.771.28 18-19 years oldaa 1.541.43 20-24 years oldaa 1.691.28 NOTE: The years 1957, 1964, and 1978 were selected because in each of these years the unemployment rate for white males aged 35-44 was an identical 2.5 percent and the business cycle was about at its peak; 1984 was selected to provide a view of recent youth unemployment. aNo data for persons of Hispanic origin are available for 1957 or 1964.
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From page 37... ...
These continuing trends in the relative unemployment rates of young Americans were a primary motivation for the launching in the late 1970s of federally funded programs designed to provide employment and training services to disadvantaged youths. Yet, as the last column of Table 2.1a indicates, the gap between white and nonwhite unemployment rates has persisted: in 1984 unemployment among white youths aged 20-24 was 9.8 percent for males and 8.8 percent for females; for nonwhite youths the rates were 24.5 and 23.5 percent, respectively.
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From page 38... ...
Employment-to-Population Rates Table 2.2a presents the employment-to-population rates (the number of employed divided by the total civilian population) for youths in the same years for which the unemployment rates are presented.
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From page 39... ...
From 1957 to 1984 this ratio declined markedly for nonwhite males. For nonwhite females the ratios declined for the younger group, while they increased somewhat for 20- to 24-year-olds.
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From page 40... ...
For white males, the employment rates increased for in-school youths from 34.0 percent in 1964 to 43.4 percent in 1981, while the rate for out-of-school youths was stable at approximately 87 percent between 1964 and 1978 and then declined slightly during the economic downturn in 1981. In contrast, the employment rates of black males have shown a marked decline for both in-school and out-of-school youths: the rate for those out of school was 80.5 percent in 1964, 67.8 in 1978, and 57.8 in 1981; the rate for those in school dropped from 30 percent in 1964 to 20 percent in 1978 and was still at 20 percent in 1981.
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From page 41... ...
Both in-school and out-of-school white females registered roughly a 20 percentage point increase in their employment the case that only statistics for whites and nonwhites were published. It is thus impossible to produce long time series (e.g., 1950-1980)
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From page 42... ...
For the in-school group, their employment rate in 1981 was virtually identical to that of white males. For out-of-school females, their employment rates were consistently below those of young white males, although they increased significantly between 1964 and the later two years.
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From page 43... ...
For black females aged 20-24, the employment rate rises from 50.2 percent in 1964 to 63.4 percent in 1978 and then declines to 48.5 percent in 1981. Labor Force Participation Rates and Summary of Employment Data Tables 2.5a and 2.5b provide complementary information on the aggregate civilian labor force participation rates of youths by age, sex, and race.
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From page 44... ...
White Males The labor force participation rates for white males fluctuated over the 1957-1984 period. They were up in 1957 and 1978 (particularly for 16- to 17-year-olds)
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From page 45... ...
The proportion of those aged 16-19 who were employed declined from 48 to 25.2 percent; for those aged 20-24 it declined from 78.2 to 58.3 percent. Thus the large increases shown in Table 2.1a for the unemployment rates of nonwhite males understate the labor market difficulties faced by this group: had their labor force participation rates not declined from 1957 to 1984, their unemployment rates would have been even higher than shown in Table 2.1a.
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From page 46... ...
It should also be noted that the inactivity rates for both white and nonwhite women aged 20-24 remained strikingly higher than those for white and nonwhite males. As shown in Table 2.6a, the inactivity rates for nonwhite females in 1978 were 28.0 percent for 18- to 19-year-olds and 33.5 percent for 20- to 24-year-olds.
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From page 47... ...
The years 1964 and 1978 were selected because the unemployment rate for white males aged 35-44 was an identical 2.5 percent and the business cycle was about at its peak. October 1983 is the most recent date for which comparable rates can be computed.
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From page 48... ...
NOTE: Inactivity rates are the percentage of the population that is neither employed, serving in the military, nor enrolled in school. The years 1964 and 1978 were selected because the unemployment rate for white males aged 35-44 was an identical 2.5 percent and the business cycle was about at its peak.
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From page 49... ...
(It is unfortunate that we are unable to disaggregate this result to determine the portion of female "inactivity" that represents women who are at home with young children. Because some of this female "inactivity" represents childbearing, readers are advised to interpret the inactivity rates in conjunction with the unemployment rates shown in Table 2.1.)
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From page 50... ...
, job losers exceed job leavers. In contrast to the usual view that youths have high unemployment rates because they quit jobs more often than adults, these data indicate that their problems arise primarily because they lose jobs or tend to find jobs for which the probability of firing or layoffs is higher.
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From page 51... ...
demonstrate that much of the gap is due to the longer time it takes young black men and women to find a job on entry into the labor force. In addition, among youths aged 20-24, the higher black unemployment rate is partly due to a higher job loss rate than for whites.
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From page 52... ...
What is the source of the male/ female differences in youth employment experiences? Researchers typically discuss a number of supply and demand factors that might contribute to continuing high unemployment rates for youths (e.g., Ellwood and Wise, 1983~.
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From page 53... ...
In both time-series and cross-sectional data, he finds that a 1 percent change in the total male unemployment rate leads to a 1.7 to 2.4 percent change in the employment-to-population ratio for youths aged 16-19 and a 1.5 to 3.4 percent change for those aged 20-24 (Freeman, 1980~. Bowers has reviewed the employment experiences of blacks, teenagers aged 16-19, and women during all business cycles from 1948 to 1980, and he also concludes (Bowers, 1981)
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From page 54... ...
The large-scale flow of blacks northward and from rural to urban areas would thus, all else being equal, contribute to an increased disparity between the unemployment rates of white and black males (since the black migrants would now, presumably, suffer from unemployment at the higher rate characteristic of black urban residents)
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From page 55... ...
since, in real terms, the minimum wage has been declining in recent years.4 Discrimination Discrimination could contribute to youth employment problems in the form of discrimination on the basis of age or on the basis of race or 4 In addition to whatever disemployment or nonemployment is caused by the minimum wage on the demand side, the existence of income maintenance programs may work (along with minimum wage laws) to provide an alternative to work for children of families receiving income maintenance.
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From page 56... ...
With respect to employment -- in contrast to wages -- efforts have been reported by Osterman (1980b) to account for the disparity in unemployment rates between whites and blacks on the basis of standard human capital variables.
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From page 57... ...
In 1984, 9 percent of nonwhite males aged 18-24 were in military service; the total number of
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From page 58... ...
(Participation in military service by females involved only 0.6 percent of white females and 1.4 percent of nonwhite females in 1984.) Factors Affecting the Supply of Labor Demographic Trends During the 1970s several demographic trends might have affected youth employment.
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From page 59... ...
report that there is no evidence to support the view that increases in the Hispanic population (which accounts for a substantial number of immigrants) have hurt job opportunities for black youths, since black youth unemployment rates are similar in cities with large and small Hispanic populations.
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From page 60... ...
size. Thus, on the supply side, the demographic projections indicate that there will be a steady decline in the number of potential participants in the labor market through 1995.
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From page 61... ...
The difference in the patterns of school enrollment between blacks and whites contributed in part to the growing differential in employment-to-population ratios between black and white youths (Freeman, 1980~. The declining school enrollment rate of whites would tend to increase their employment rates since the employment rate for those out of school is generally higher than that for those in school.
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From page 62... ...
and Mare and Winship (1983) , have independently sought to bring together most of the factors covered above in a consistent accounting framework in order to see what proportion of the growth in the gap in black/white youth employment rates can be explained by the sum of the individual effects of all the factors.
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From page 63... ...
While these higher-order interactions generate interesting hypotheses, they are extraordinarily difficult to assess empirically, particularly when they involve such factors as the minimum wage or discrimination, which have proved challenging to assess even as singular first-order factors. Other Influences on Youth Employment Several research findings do not fit neatly into the supply and demand framework we have used in the preceding sections of this chapter.
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From page 64... ...
The residue of past and current discrimination finds its expression on the demand side in diminished opportunities for minority youths in the labor market (because of the attitudes of employers) ; and, to the extent that the social context affects the perceptions, attitudes, and responses of youths, it can have a quite fundamental impact on the supply of labor.
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From page 65... ...
The unemployment rate of youths aged 16-19 was more than double that at 24.5 percent. The greater sensitivity of youth employment to the business cycle noted previously can be seen for this period as well in the data on employment-to-population rates given in Table 2.10.
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From page 66... ...
is not only worse in 1984 than it was in 1978 but has further deteriorated relative to white male youths, while the employment-topopulation rates of nonwhite females remain the lowest of the youth groups. These very summary data indicate both that, as would be expected, the recession hurt youth employment seriously and also that even with the economic recovery youth employment problems remain very serious.
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From page 67... ...
While our committee has not tried to assess systematically the economic outlook for the future and its implications for youth employment problems, we do wish to comment on one feature that has sometimes been pointed to as a possibly important sensitive development, namely, the decline in the absolute size of the youth cohort. In the previous section, it was noted that one of the possible causes of youth employment problems was the massive, unprecedented rise in the size of the youth cohort, both absolutely and relative to the adult worker population (shown in Figure 2.1~.
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From page 68... ...
68 black unemployment, inactivity, etc., it is not only the black population among whom unemployment is concentrated. In 1978 Hispanics experienced long-term unemployment at 1.3 times the rate of the population as whole, children from poverty families at 1.6 times the national rate, and those living in inner cities at 1.4 times the national rate (Congressional Budget Office, 1982~.
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