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Labor Turnover and Youth Unemployment

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  • Linda S. Leighton
  • Jacob Mincer
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    Abstract

    The main question of concern in this paper is why youth unemployment is high relative to unemployment of adults. The analysis is based largely on longitudinal micro-data in the NLS and MID panels of men, surveyed in the 1966-1976 decade. Since the duration of unemployment increases with age, incidence that is the probability of experiencing unemployment is the main focus of our analysis. The basic finding is that the at first rapid and then decelerating decline with age in the probability of unemployment stems from a similarly shaped relation between the probability of separation (from a job) and working age. The age patterns are, in turn, mainly due to the decline of probabilities as tenure lengthens. Indeed, at given levels of tenure, unemployment incidence does not at all decline with age, except among blacks and in periods of high unemployment. We conclude that the short tenure level of the young is the main reason for the age differential in unemployment. To check this we compare youth with short-tenured groups which are not adversely selected, migrants who were not unemployed before migration and immigrants. The comparison reveals that youth are in the same situation as others with little accumulated tenure. We do note, however, that unemployment declines more slowly for youth than for others, reflecting the gradually increasing commitment to work in the transition from school to work and from parental to own household. Increases in the duration of unemployment with age are ascribed, within a search model framework, to a decline in the probability of finding job vacancies among older movers. The inference of increasing difficulty in job finding is also consistent with observed increases in the probability of unemployment conditional on separation, declines in the quit/layoff ration, and in wage gains from moves as workers age.

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    File URL: http://www.nber.org/papers/w0378.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0378.

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    Date of creation: Aug 1979
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    Publication status: published as Leighton, Linda and Mincer, Jacob. "Labor Turnover and Youth Unemployment." The Youth Labor Market Problem: Its Nature, Causes and Consequences, edited by Richard B. Freeman and David A. Wise, pp. 235-275. Chicago: University of Chicago Press, 1982.
    Handle: RePEc:nbr:nberwo:0378

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Jacob Mincer & Boyan Jovanovic, 1979. "Labor Mobility and Wages," NBER Working Papers 0357, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006. "The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 3-26, Summer.
    2. Harry J. Holzer & Robert J. LaLonde, 1999. "Job Change and Job Stability Among Less-Skilled Young Workers," Working Papers 9928, Harris School of Public Policy Studies, University of Chicago.
    3. Steven J. Davis & Jason Faberman & John C. Haltiwanger, 2011. "Labor Market Flows in the Cross Section and Over Time," NBER Working Papers 17294, National Bureau of Economic Research, Inc.
    4. Steven J. Davis & R. Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2010. "Business Volatility, Job Destruction, and Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 259-87, April.
    5. Charles T. Carlstrom, 1989. "Turnover, wages, and adverse selection," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 18-28.
    6. Jacob Mincer, 1986. "Wage Changes in Job Changes," NBER Working Papers 1907, National Bureau of Economic Research, Inc.
    7. Bruce Chelimsky Fallick, 1989. "The Industrial Mobility of Displaced Workers," UCLA Economics Working Papers 572, UCLA Department of Economics.
    8. Davis, Steven J. & Faberman, R. Jason & Haltiwanger, John C., 2005. "The Flow Approach to Labor Markets: New Data Sources, Micro-Macro Links and the Recent Downturn," IZA Discussion Papers 1639, Institute for the Study of Labor (IZA).
    9. Alan L. Gustman & Thomas L. Steinmeier, 1985. "A Model for Analyzing Youth Labor Market Policies," NBER Working Papers 1621, National Bureau of Economic Research, Inc.
    10. Lisa M. Lynch, 1986. "The Youth Labor Market in the 80s: Determinants of Re-Employment Probabilities for Young Men and Women," NBER Working Papers 2021, National Bureau of Economic Research, Inc.
    11. Mijares, John C., 1997. "Early drug use and quits and discharges among adolescent males," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(4), pages 439-458.

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