Working Paper: CEPR ID: DP194
Authors: Barry Eichengreen
Abstract: During the 1980s youth unemployment rates have persistently exceeded unemployment rates for adults, in Britain as in other OECD countries. In the interwar period, youth unemployment rates in Britain were dramatically lower than those for adults. This paper explores possible reasons for the contrast, including demographic trends, changes in school attendance, changes in labor force participation, changes in the intensity of job search, macroeconomic conditions, shifts in the industrial composition of employment, and economy-wide changes in the share of juveniles employed (due to changes in youth/adult wage differentials, technologies or labor practices). Much of the explanation for the contrast turns out to lie in a rise in the cyclical sensitivity of youth unemployment between the interwar and postwar periods, apparently attributable to changes in hiring and redundancy practice.
Keywords: youth unemployment; cyclical sensitivity; hiring and redundancy practices
JEL Codes: 810; 820
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Demographic trends (J11) | Juvenile unemployment rates (J68) |
| Changes in school attendance (I21) | Juvenile unemployment rates (J68) |
| Job search intensity (J29) | Juvenile unemployment rates (J68) |
| Macroeconomic conditions (E66) | Job creation rates (J23) |
| Shifts in industrial composition (L16) | Juvenile unemployment rates (J68) |
| Changes in youth-adult wage differentials (J39) | Juvenile unemployment rates (J68) |
| Recording effects (C33) | Perceptions of unemployment situation (J64) |