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The Effect of Labor Market Changes from the Early 1970s to the Late 1980s on Youth Wage, Earnings, and Household Economic Position

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  • R. Haveman
  • B. Knight

Abstract

While overall employment in the United States has risen in the last 30 years, the employment and earnings prospects for youths have fallen relative to those for older workers. This deterioration in youth labor market conditions has been most pronounced for low-skilled youths, high school dropouts, and those with low IQs. Using data from national longitudinal studies of young men, young women, and youths, this paper examines a number of aspects of the labor market outcomes of youths entering the labor market at two different times. The first group entered the robust labor market of the late 1960s, while the second group entered the deteriorated labor market of the mid-1980s. Consistent with previous research, this paper finds an improvement over the two periods in levels of employment and earnings for high-skilled youths, with a corresponding deterioration for lower-skilled youths. The paper presents a unique analysis of the growth trajectories of earnings and employment for high- and low-skilled youths in the two cohorts. We find substantial within-cohort growth for high-skilled youths in both cohorts (as well an improvement in household economic circumstances), with a corresponding deterioration in earnings, employment, and household economic circumstances for lower-skilled youths, especially those in the later cohort.

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  • R. Haveman & B. Knight, "undated". "The Effect of Labor Market Changes from the Early 1970s to the Late 1980s on Youth Wage, Earnings, and Household Economic Position," Institute for Research on Poverty Discussion Papers 1174-98, University of Wisconsin Institute for Research on Poverty.
    • Handle: RePEc:wop:wispod:1174-98
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    1. repec:fth:prinin:386 is not listed on IDEAS
    2. David Card & Thomas Lemieux, 2000. "Adapting to Circumstances (The Evolution of Work, School,and Living Arrangements among North American Youth)," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 171-214, National Bureau of Economic Research, Inc.
    3. David Card & Thomas Lemieux, 1997. "Adapting to Circumstances: The Evolution of Work, School, and Living Arrangements Among North American Youth," Working Papers 765, Princeton University, Department of Economics, Industrial Relations Section..
    4. McKinley L. Blackburn & David E. Bloom & Richard B. Freeman, 1989. "The Declining Economic Position of Less-Skilled American Males," NBER Working Papers 3186, National Bureau of Economic Research, Inc.
    5. Richard B. Freeman, 1990. "Employment and Earnings of Disadvantaged Young Men in a Labor Shortage Economy," NBER Working Papers 3444, National Bureau of Economic Research, Inc.
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