Macroeconomics

Where are the teenager workers? An answer to The New York Times.

In a recent article published by the New York Times, Patricia Cohen and Ron Lieber made a brief inquiry on youth employment during summer 2015. In their writing piece, Cohen and Lieber open two windows for interpretation about factors affecting teenagers’ employment during summer school break. One of them is to believe that people between 16 and 19 years old are not interested in working at all, and instead they are doing “other stuff” (going to summer school, traveling or volunteering). The other window for interpretation is that the rivalry between teenagers and 20-years-older people for summer jobs has intensified in recent years. In their own words “Adults, desperate for second and third jobs to make ends meet, may be crowding out many teenagers”. The former rationale has to be ruled out from the analysis given that the BLS Household Survey barely allows for such an interpretation, which leads to only speculations. Otherwise, the latter issue about adults crowding out effect on teenagers may explain the picture better.

So, the argument goes the following way: youth summer employment is being taken by 20-years-and-older people. In other words, level of employment of 16-19-years-old gets affected by level of employment of 20-years-and-older people. If the American Economy creates certain number of jobs per month (average 221,000), those employments must be distributed among the population actively looking for jobs. Thus, variance in 20-years-and-older people must explain variance in youth employment. In addition, since the question is appropriately posed for summer jobs, the comparison must be run among comparable months of the year. Furthermore, given that gender plays a role in the number of hours worked by employees, and the hypothesis proposes 20-years-and-olders are chasing second jobs, it makes sense to look at 20-years-and-older women and men disjointedly.

Therefore, it also makes sense to regress 16-19-years-old’s level of employment on 20-years-and-older Women and Men’s level of employment for the months of January through June using BLS data from 2000 to 2015.

The results show that level of employment of teenagers get affected negatively by women level of employment. This effect can be interpreted as women competing fiercely against teenagers looking for a summer job. Data reveal that women tend to take jobs traditionally “meant” for teenagers. These results are twofold. First, data show that the crowding out effect maybe indeed happening. Second, data show that women might be the ones crowding out teenagers’ employment.

The situation exacerbates for young as the labor market reaches the summer. Generally speaking, women level employment affects teenagers’ less at the beginning of the year than by the summer. Coefficients in this regard show an increase from -0.58 in April to an estimated -0.75 in June. The meaning of the estimates is that teenagers have 75% less chances to get a job when women 20-years-and-older apply for it too in June. Thus, results on June data actually reinforce the hypothesis given that June and summer are supposed to have  jobs temporarily filled by teens.

The following table summarizes findings of regressions. Asterisk means 95% significance level.

Youth employment

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