IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/1411.html

On the Rationality of Black Youth Unemployment

Author

Listed:
  • Harry J. Holzer

Abstract

In this paper I provide some evidence on the question of whether the behavior of unemployed young blacks, whose reservation wages are relatively high and whose jobless spells are very lengthy, reflect rational maximizing choices. To do this, I use a simple income-maximizing job search model to imply employment probabilities and various elasticities which are compared to those which are actually observed for young blacks.The results show that, for reasonable discount rates, the employment probabilities implied by income-maximization are consistent with those observed for young blacks. The elasticities of reservation wages with respect to nonwage income that are implied by income-maximizing are also consistent with those estimated econometrically for this group. This was true despite the many assumptions embodied in this model whose validity fora sample of low-income youth is highly questionable.The evidence thus suggests that young blacks are making economically rational choices by choosing high reservation wages and lengthy spells without jobs.

Suggested Citation

  • Harry J. Holzer, 1984. "On the Rationality of Black Youth Unemployment," NBER Working Papers 1411, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1411
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w1411.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kim B. Clark & Lawrence H. Summers, 1982. "The Dynamics of Youth Unemployment," NBER Chapters, in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 199-234, National Bureau of Economic Research, Inc.
    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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. H. J. Holzer & R. J. LaLonde, "undated". "Job Change and Job Stability among Less-Skilled Young Workers," Institute for Research on Poverty Discussion Papers 1191-99, University of Wisconsin Institute for Research on Poverty.
    2. Harry J. Holzer & Paul Offner & Elaine Sorensen, 2005. "Declining employment among young black less-educated men: The role of incarceration and child support," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(2), pages 329-350.
    3. Aysit Tansel & H. Mehmet Taşçı, 2010. "Hazard Analysis of Unemployment Duration by Gender in a Developing Country: The Case of Turkey," LABOUR, CEIS, vol. 24(4), pages 501-530, December.
    4. 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.
    5. Pieter Serneels, 2004. "The Nature of Unemployment in Urban Ethiopia," CSAE Working Paper Series 2004-01, Centre for the Study of African Economies, University of Oxford.
    6. Alba-Ramirez, Alfonso, 1995. "Cross-country differences in cyclical variations of male teenage employment," Economics Letters, Elsevier, vol. 48(3-4), pages 419-426, June.
    7. Jesse Rothstein, 2012. "The Labor Market Four Years into the Crisis: Assessing Structural Explanations," ILR Review, Cornell University, ILR School, vol. 65(3), pages 467-500, July.
    8. Moffat, John & Yoo, Hong Il, 2015. "Who are the unemployed? Evidence from the United Kingdom," Economics Letters, Elsevier, vol. 132(C), pages 61-64.
    9. 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.
    10. Artner, Annamária, 2013. "A fiatalok munkanélküliségének kérdéséhez Európa példáján keresztül [Contribution to the problem of the youth unemployment through the example of Europe]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1370-1392.
    11. Cahuc, Pierre & Malherbet, Franck & Prat, Julien, 2019. "The Detrimental Effect of Job Protection on Employment: Evidence from France," CEPR Discussion Papers 13767, C.E.P.R. Discussion Papers.
    12. Gerdtham, Ulf-G. & Ruhm, Christopher J., 2006. "Deaths rise in good economic times: Evidence from the OECD," Economics & Human Biology, Elsevier, vol. 4(3), pages 298-316, December.
    13. Robert Cherry, 2004. "Nickel and dimed and Saving bernice: Contrasting perspectives on welfare reform," The Review of Black Political Economy, Springer;National Economic Association, vol. 31(3), pages 117-128, March.
    14. Dennis Tamesberger & Johann Bacher, 2020. "COVID-19 Crisis: How to Avoid a ‘Lost Generation’," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(4), pages 232-238, July.
    15. Francesco Pastore & Luca Giuliani, 2015. "The determinants of youth unemployment. A panel data analysis," Discussion Papers 2_2015, CRISEI, University of Naples "Parthenope", Italy.
    16. Richard Freeman & David G. Blanchflower, 2000. "Introduction to "Youth Employment and Joblessness in Advanced Countries"," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 1-16, National Bureau of Economic Research, Inc.
    17. Bruno Amable & Lilas Demmou & Donatella Gatti, 2011. "The effect of employment protection and product market regulation on labour market performance: substitution or complementarity?," Applied Economics, Taylor & Francis Journals, vol. 43(4), pages 449-464.
    18. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 28-42, January.
    19. Mavromaras, Kostas & Polidano, Cain, 2011. "NILS Working paper no 165. Improving the employment rates of people with disabilities through vocational education," NILS Working Papers 26068, National Institute of Labour Studies.
    20. Pastore, Francesco, 2007. "Employment and Education Policy for Young People in the EU: What Can New Member States Learn from Old Member States?," IZA Discussion Papers 3209, IZA Network @ LISER.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1411. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.