The Great Recession and Youth Unemployment . Evidence from the - PowerPoint PPT Presentation

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

Background: the Great Recession Young workers in context Trends and data Implications Further discussion

26 24 Poland Greece 2007 youth unemployment OECD nations 22 20 Italy Spain 18 16 14 12 United States Germany 10 8 Estonia 6 Switzerland 4 2 0 -4 -2 0 +2 +4 +6 +8 +10 +12 +14 +16 +18 +20 +22 +24 +26 Percentage-point change :2007 to 2010

50% 45.4% Recessions 45% Unemployment Rate LTU Share 40% 35% 30% 26.0% 25% 23.6% 23.1% 20% 15% 10.8% 10.0% 10% 7.8% 6.2% 5% 0% 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: Current Population Survey

45% 40% 1969 (11 Months) 1973 (16 months) 35% 1981 (16 months) Share of LT unemployment 1990 (8 months) 30% 2001 (8 months) 2007 (18 months) 25% 20% 15% 10% 5% 0% 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 Months since business cycle peak

14% 16% 18% 20% 10% 12% 0% 4% 6% 8% 2% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 25+ 16-24 2000 2002 2004 2006 2008 2010

0.70 Ages 25+ 0.60 0.50 0.40 Ages 16-19 0.30 0.20

55% 50% 45% 40% 35% 30% 25% 20% Recession White male 15% White female 10% Black male Black female 5% Hispanic male Hispanic female 0%

90% 85% 80% 75% 70% 65% 60% 55% 50% 45% Recession White male 40% White female 35% Black male Black female 30% Hispanic male 25% Hispanic female 20%

100% 0.07 0.10 0.13 0.14 0.18 0.20 90% 0.10 0.13 80% 0.15 0.19 .15 0.22 70% 0.23 55-up .20 .21 60% .18 45-54 .29 50% .20 .22 35-44 .32 40% .23 .29 25-34 30% .22 .22 16-24 20% .39 .26 .25 .22 10% .18 .14 0% LF ฀ U LTU LF ฀ U LTU ฀ ฀ ฀ ฀ ฀ 1983 ฀ 2010

Source: Hoynes, Miller & Schaller, JEP Summer 2012

Source: Hoynes, Miller & Schaller, JEP Summer 2012

The Great Recession 2% 1 9 8 1 0% 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 -2% US today -3 .4 % -4 .7 m illion -4% -6% CA today! -5 .6 % -8 4 4 ,0 0 0 -8% -10% Source: Sylvia Allegretto’s analysis of Current Employment Statistics data. Data as of July 2012.

• 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.

Molte Grazie! 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