The Great Recession and Youth Unemployment . Evidence from the United States

Sylvia A. Allegretto, PhD Economist, Institute for Research on Labor and Employment University of California, Berkeley USA

Further discussion

Implications

Trends and data

Young workers in context

Background: the Great Recession

02468

101214161820222426

-4 -2 0 +2 +4 +6 +8 +10 +12 +14 +16 +18 +20 +22 +24 +26

2007

you

th u

nem

ploy

men

t OEC

D n

atio

ns

Percentage-point change :2007 to 2010

Spain

Greece

Estonia

Germany United States

Italy

Poland

Switzerland

10.8%

7.8% 6.2%

10.0%

26.0% 23.1% 23.6%

45.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

RecessionsUnemployment RateLTU Share

Source: Current Population Survey

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Shar

e of

LT

unem

ploy

men

t

Months since business cycle peak

1969 (11 Months)1973 (16 months)1981 (16 months)1990 (8 months)2001 (8 months)2007 (18 months)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

16-24

25+

0.20

0.30

0.40

0.50

0.60

0.70

Ages 16-19

Ages 25+

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

RecessionWhite maleWhite femaleBlack maleBlack femaleHispanic maleHispanic female

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

RecessionWhite maleWhite femaleBlack maleBlack femaleHispanic maleHispanic female

.22

.39 .25

.14 .26

.18

.29

.29

.32

.22

.23

.22

.21

.15

.20

.22

.18

.20

0.15

0.10 0.13

0.23

0.19 0.22

0.13 0.07 0.10

0.20 0.14 0.18

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

�LF

�U

�LTU �LF

�U

�LTU

�1983 �2010

55-up

45-54

35-44

25-34

16-24

Source: Hoynes, Miller & Schaller, JEP Summer 2012

Source: Hoynes, Miller & Schaller, JEP Summer 2012

-10%

-8%

-6%

-4%

-2%

0%

2%

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56

1981

Source: Sylvia Allegretto’s analysis of Current Employment Statistics data. Data as of July 2012.

US today -3.4% -4.7 million

The Great Recession

CA today! -5.6% -844,000

• US debate about the direction the country will go moving forward.

• Bailout of the banks with no stipulations. Then no money to

help regular people, housing crisis, jobs crisis. • Must put people back to work—then worry about debt &

deficits—which would correct if GDP growth is strong & sustained.

• Youth are suffering from lack of opportunities and raising

costs of higher education. Lower life time earnings profile.

The Great Recession and Youth Unemployment . Evidence from the United States

Sylvia A. Allegretto, PhD Economist, Institute for Research on Labor and Employment University of California, Berkeley USA

Molte Grazie!