What to Watch on Jobs Day: Will the Number of Missing Young Workers Decline Again?

There are currently nearly one million “missing workers” under the age of 25. (In total, there are 5.3 million missing workers, who are neither working nor actively seeking work due to the weak labor market.) In March, the total number of missing workers dropped substantially, due almost entirely to an increase in the labor force participation of workers under the age of 25, particularly men. It turns out that the March increase in labor force participation of young men simply partially reversed a five-month slide, and their labor force participation remains far below its long-run trend. However, what happens with the labor force participation of young men in April will help clarify whether the March increase was a real step in the right direction or just a one-month fluke in a volatile series.

The figure below shows the number of missing young workers (men and women combined). There is a great deal of volatility month-to-month, so looking at the long-run trend is crucial. The number of missing workers under age 25 shot up to 1.6 million between early 2007 and early 2010, and then fluctuated around that level for a year-and-a-half, before declining to its current level of 950,000 (580,000 men and 370,000 women). I should note that this calculation takes into account long-run trends in labor force participation, such as lower labor force participation of young people due to increasing college enrollment over recent decades. (The methodology for calculating the number of missing workers is described here.) But it is also true that today’s missing young workers have not been able to “shelter in school” from the labor market effects of the Great Recession. Increases in college and university enrollment rates between 2007 and 2012 were no greater than the increases seen before the recession began—and since 2012, college enrollment rates have dropped substantially. This is discussed in more depth in my latest paper, on the class of 2014.

Figure A

Missing workers* under age 25, January 2006–March 2014

 Missing workers
Jan-2006               230,000
Feb-2006                -20,000
Mar-2006                 70,000
Apr-2006               150,000
May-2006                 60,000
Jun-2006                        0
Jul-2006                 50,000
Aug-2006              -160,000
Sep-2006               110,000
Oct-2006                -40,000
Nov-2006              -120,000
Dec-2006              -200,000
Jan-2007              -120,000
Feb-2007                 50,000
Mar-2007                 90,000
Apr-2007               380,000
May-2007               570,000
Jun-2007               230,000
Jul-2007               420,000
Aug-2007               710,000
Sep-2007               200,000
Oct-2007               300,000
Nov-2007               160,000
Dec-2007               290,000
Jan-2008               140,000
Feb-2008               560,000
Mar-2008               530,000
Apr-2008               350,000
May-2008                -80,000
Jun-2008               190,000
Jul-2008               210,000
Aug-2008               300,000
Sep-2008               270,000
Oct-2008               360,000
Nov-2008               620,000
Dec-2008               470,000
Jan-2009               760,000
Feb-2009               500,000
Mar-2009               630,000
Apr-2009               540,000
May-2009               660,000
Jun-2009               670,000
Jul-2009               770,000
Aug-2009               940,000
Sep-2009            1,170,000
Oct-2009            1,410,000
Nov-2009            1,360,000
Dec-2009            1,460,000
Jan-2010            1,640,000
Feb-2010            1,510,000
Mar-2010            1,470,000
Apr-2010            1,240,000
May-2010            1,400,000
Jun-2010            1,680,000
Jul-2010            1,540,000
Aug-2010            1,360,000
Sep-2010            1,610,000
Oct-2010            1,440,000
Nov-2010            1,370,000
Dec-2010            1,650,000
Jan-2011            1,460,000
Feb-2011            1,570,000
Mar-2011            1,480,000
Apr-2011            1,580,000
May-2011            1,700,000
Jun-2011            1,720,000
Jul-2011            1,780,000
Aug-2011            1,480,000
Sep-2011            1,370,000
Oct-2011            1,220,000
Nov-2011            1,290,000
Dec-2011            1,380,000
Jan-2012            1,600,000
Feb-2012            1,390,000
Mar-2012            1,470,000
Apr-2012            1,520,000
May-2012            1,410,000
Jun-2012            1,310,000
Jul-2012            1,310,000
Aug-2012            1,690,000
Sep-2012            1,480,000
Oct-2012            1,220,000
Nov-2012            1,220,000
Dec-2012            1,210,000
Jan-2013            1,110,000
Feb-2013            1,300,000
Mar-2013            1,510,000
Apr-2013            1,320,000
May-2013            1,300,000
Jun-2013            1,040,000
Jul-2013            1,190,000
Aug-2013            1,350,000
Sep-2013            1,080,000
Oct-2013            1,270,000
Nov-2013            1,300,000
Dec-2013            1,290,000
Jan-2014            1,360,000
Feb-2014            1,480,000
Mar-2014               950,000

* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work, and are thus not reflected in the unemployment rate

Source: Authors’ analysis of Toossi (2007) and Current Population Survey public data series

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The next figure shows that the unemployment rate for young workers would be 18.1 percent instead of 14.5 percent if the missing young workers were in the labor force looking for work—and thus counted as unemployed. In other words, the unemployment rate in today’s recovery greatly understates how difficult it is for young workers to find a job. We will update both of these figures as soon as the jobs numbers are released tomorrow morning.

For a complete picture of the labor market prospects facing the new cohort of young adults graduating from high school and college this spring, see the Class of 2014 report released today.

Figure B

Unemployment rate of workers under age 25, actual and if missing workers* were looking for work, January 2006–March 2014

Actual unemployment rate Unemployment rate if missing workers were actively seeking work
Jan-2006 10.4% 11.4%
Feb-2006 10.8% 10.7%
Mar-2006 10.5% 10.8%
Apr-2006 10.3% 10.9%
May-2006 10.0% 10.2%
Jun-2006 10.4% 10.4%
Jul-2006 10.9% 11.1%
Aug-2006 10.7% 10.1%
Sep-2006 10.6% 11.1%
Oct-2006 10.6% 10.4%
Nov-2006 10.6% 10.1%
Dec-2006 10.0% 9.2%
Jan-2007 10.3% 9.8%
Feb-2007 9.9% 10.1%
Mar-2007 10.0% 10.3%
Apr-2007 10.3% 11.8%
May-2007 9.9% 12.2%
Jun-2007 10.6% 11.5%
Jul-2007 10.5% 12.2%
Aug-2007 10.7% 13.5%
Sep-2007 11.2% 11.9%
Oct-2007 10.7% 11.9%
Nov-2007 10.8% 11.4%
Dec-2007 11.7% 12.9%
Jan-2008 11.7% 12.3%
Feb-2008 11.4% 13.6%
Mar-2008 11.4% 13.5%
Apr-2008 11.0% 12.4%
May-2008 13.0% 12.7%
Jun-2008 12.9% 13.6%
Jul-2008 13.5% 14.3%
Aug-2008 13.1% 14.3%
Sep-2008 13.5% 14.5%
Oct-2008 13.6% 15.0%
Nov-2008 14.0% 16.4%
Dec-2008 14.8% 16.6%
Jan-2009 15.0% 17.9%
Feb-2009 16.0% 17.9%
Mar-2009 16.5% 18.8%
Apr-2009 16.7% 18.7%
May-2009 17.6% 20.0%
Jun-2009 18.0% 20.5%
Jul-2009 17.9% 20.7%
Aug-2009 18.1% 21.5%
Sep-2009 18.4% 22.7%
Oct-2009 19.1% 24.2%
Nov-2009 19.2% 24.1%
Dec-2009 18.8% 24.1%
Jan-2010 18.8% 24.8%
Feb-2010 18.7% 24.2%
Mar-2010 18.8% 24.1%
Apr-2010 19.5% 24.0%
May-2010 18.1% 23.2%
Jun-2010 18.2% 24.3%
Jul-2010 18.4% 24.0%
Aug-2010 17.7% 22.7%
Sep-2010 17.9% 23.8%
Oct-2010 18.7% 23.9%
Nov-2010 18.5% 23.5%
Dec-2010 18.0% 24.0%
Jan-2011 18.1% 23.4%
Feb-2011 17.8% 23.5%
Mar-2011 17.6% 23.0%
Apr-2011 17.5% 23.3%
May-2011 17.2% 23.5%
Jun-2011 17.1% 23.5%
Jul-2011 17.3% 23.8%
Aug-2011 17.3% 22.8%
Sep-2011 17.3% 22.4%
Oct-2011 16.7% 21.2%
Nov-2011 17.0% 21.8%
Dec-2011 16.8% 21.9%
Jan-2012 16.0% 22.0%
Feb-2012 16.6% 21.7%
Mar-2012 16.3% 21.8%
Apr-2012 16.3% 21.9%
May-2012 16.0% 21.2%
Jun-2012 16.3% 21.1%
Jul-2012 16.3% 21.1%
Aug-2012 16.6% 22.8%
Sep-2012 15.5% 21.0%
Oct-2012 16.0% 20.5%
Nov-2012 15.9% 20.4%
Dec-2012 16.6% 21.1%
Jan-2013 16.8% 20.9%
Feb-2013 16.4% 21.2%
Mar-2013 16.2% 21.8%
Apr-2013 16.0% 20.9%
May-2013 16.2% 21.0%
Jun-2013 16.2% 20.0%
Jul-2013 15.5% 19.9%
Aug-2013 15.4% 20.5%
Sep-2013 15.1% 19.1%
Oct-2013 14.9% 19.7%
Nov-2013 14.1% 19.1%
Dec-2013 13.5% 18.5%
Jan-2014 14.2% 19.4%
Feb-2014 14.4% 20.0%
Mar-2014 14.5% 18.1%

* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work, and are thus not reflected in the unemployment rate

Source: Authors’ analysis of Toossi (2007) and Current Population Survey public data series

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