Tuesday, October 18, 2011

Adults Crowding Out Teens in Labor Force

What explains the sharp drop in employment rates among high school students over the past quarter century--a drop of nearly 20 percentage points? In a comprehensive analysis of the causes, Federal Reserve Board researcher Christopher L. Smith finds that some teens are too busy with extracurricular and college prep activities to have jobs. But the more important reason, according to his research, is that potential teen workers are being crowded out by adults competing for the same jobs:
"Much of the crowd-out from adults is likely due to polarization of the adult labor market, driven by the declining costs of computerization and automation which have displaced some less-educated adult workers into service sector jobs that teens tend to do."
Source: Federal Reserve Board Finance and Economics Discussion Series, Christopher L. Smith, "Polarization, immigration, education: What's behind the dramatic decline in youth employment?"

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