Jacobs, E. (2014) “Twelve Ways to Fix the Youth Unemployment Crisis“, Governance Studies at Brookings, May.
INTRODUCTION
Young Americans are enduring staggeringly high rates of joblessness. The official unemployment rate for 16 to 24 year olds is 14.5 percent, and has been in the double-digits for seven straight years. Over three million young people are unemployed, and many more have dropped out of the labor market entirely. While the unemployment rate for young workers has long been substantially higher than that of older workers, the severe job losses and anemic labor market recovery from the Great Recession have left millions of young workers in a particularly tough spot. A quarter of the job losses for young workers came after the Great Recession was officially over. Moreover, the rising number of young people connected to neither education nor the labor market is of particular concern. 5.8 million young adults, or nearly 15 percent of 16 to 24 year olds, are neither working nor in school. The recession has made the crucial transition from school to work particularly difficult. Youth unemployment is one of the most serious economic and social problems facing the United States today.
Today’s labor market failures have long-term consequences for unemployed youth. A growing academic literature on the “scarring” effects of launching a career without a job suggests that young people who endure early spells of unemployment are likely to have lower wages and greater odds of future unemployment than those who don’t. Studies indicate a 10 to 15 percent wage “scar” from early unemployment, and those earnings losses persist for at least 20 years. These findings hold for individuals with a college degree, and the prognosis for individuals without a college degree is grimmer still.
Relevant posts:
- Eichhorst, W. & Neder, F. (2014) “Youth Unemployment in Mediterranean Countries“, Institute for the Study of Labor, IZA Policy Paper No. 80, March.
- Weeks, J. (2013) “The Faux European Recovery and Youth Unemployment“, Social Europe Journal, 03 December.
- Eichhorst, W., Hinte, H., Rinne, U. (2013) “Youth Unemployment in Europe: What to do about it?“, IZA Policy Paper, N., 65.