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Why is There A Youth Labor Market Problem?


  • Richard B. Freeman


This paper examines what is known about the causes of the high and increasing levels of youth joblessness and related problems in the youth labor market. Partly because of inconsistencies in reported rates of youth employment across surveys and partly because of problems in measuring key social variables, it is difficult to reach firm conclusions. As far as can be told, much of the relatively high rate of youth joblessness can be attributed to turnover and mobility patterns that are normal in the U.S. economy, but much is also directly related to a dearth of jobs. Demand forces, which have come to be neglected in favor of supply in much popular discussion of youth joblessness, are major determinants of variation in youth employment over time and among areas. For groups facing the most severe joblessness problems, however, the difficulty due to lack of jobs appears to be compounded by problems of employability related to deleterious social patterns. Surprisingly, perhaps, the factors that determine the probability that young persons end up employed or jobless differ substantively from those that determine wages. The paper explains the decline in the earnings of young workers relative to old workers in terms of the increased number of young persons. It speculates that the decline in relative wages may have contributed significantly to the stable ratio of employment to population among young whites. The causes of the downward trend in youth employment for nonwhites -- which constitute one of the major developments of the period -- remain a conundrum.

Suggested Citation

  • Richard B. Freeman, 1979. "Why is There A Youth Labor Market Problem?," NBER Working Papers 0365, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:0365
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    References listed on IDEAS

    1. Edward M. Gramlich, 1976. "Impact of Minimum Wages on Other Wages, Employment, and Family Incomes," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(2), pages 409-462.
    2. Stephen T. Marston, 1976. "Employment Instability and High Unemployment Rates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(1), pages 169-210.
    3. Beverly Duncan, 1965. "Dropouts and the Unemployed," Journal of Political Economy, University of Chicago Press, vol. 73, pages 121-121.
    4. Richard B. Freeman, 1979. "The Effect of Demographic Factors on Age-Earnings Profiles," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 289-318.
    5. Ragan, James F, Jr, 1977. "Minimum Wages and the Youth Labor Market," The Review of Economics and Statistics, MIT Press, vol. 59(2), pages 129-136, May.
    6. Arnold Katz, 1973. "Teenage Employment Effects of State Minimum Wages," Journal of Human Resources, University of Wisconsin Press, vol. 8(2), pages 250-256.
    7. Philip G. Cotterill & Walter J. Wadycki, 1976. "Teenagers and the Minimum Wage in Retail Trade," Journal of Human Resources, University of Wisconsin Press, vol. 11(1), pages 69-85.
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    Cited by:

    1. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-452, June.
    2. Harry J. Holzer, 1986. "Black Youth Nonemployment: Duration and Job Search," NBER Chapters,in: The Black Youth Employment Crisis, pages 23-73 National Bureau of Economic Research, Inc.
    3. Wolfgang Franz, 1979. "The Duration of Youth Unemployment in West Germany: Some Theoretical Considerations," NBER Working Papers 0397, National Bureau of Economic Research, Inc.
    4. Floro Ernesto Caroleo & Francesco Pastore, 2009. "Le cause del(l') (in)successo lavorativo dei giovani," Economia & lavoro, Carocci editore, issue 3, pages 107-107.

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