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Monday, October 25, 2004

Why Have Teen Labor Force Participation Rates Declined?

I argued earlier that a large percentage of the decline in overall labor force participation rates can be accounted for by the decline in teenage labor force participation. This, of course, raises the question of why teen LFPRs have declined.
I did what an academic does--I looked to see what someone else might have concluded, and I found only two recent attempts to explain the declines in teen LFPR.
One is in the Bureau of Labor Statistics "Issues in Labor Statistics Series" (, from September 2002. The analyst (Katie Kirkland) examines teen LFPR in July from 1948 through 2002, and examines the relationship between labor force participation and (summer) school enrollment from 1994 through 2000. Noting that LFPRs have declined and school enrollment has increased in the 1994 - 2000 period, the analysis concludes, "...the increasing proportion of teens enrolled in school during the summer and a drop in student's labor force participation contributed to the overall decline in teen summer labor force participation during the recent expansion. Data for October of each year indicate that labor force participation among high school students also dropped during the school year, although nonstudents were increasingly likely to participate in the labor force. Together, these facts suggest that, among teens, an increased emphasis was placed on school rather than work during the summer and during the school year."

It's worth noting that the causation here might run in the other direction--teens left the labor force for other reasons, and, as their alternative to labor force participation, chose school enrollment.

The second mention I could find occurs in a "Monthly Economic Outlook" prepared for Raymond James and Associates , Inc., by Scott J. Brown. In the Monthly Economic Outlook" dated April 8, 2004 (, he writes: "Teenage labor force participation has fallen sharply, suggesting that older workers have taken a greater share of low-end jobs." This would suggest that the declining teen LFPR is a consequence of a deteriorating labor market for teen labor, which might show up (as well) in higher unemployment rates.

This is not terribly satisfactory, but whatever academic/statistical analysis is being done has presumably not yet been concluded, or published. I'll come back to this issue.


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