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%
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
-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.
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