New Data Unearth Inequalities in Youth Employment Exacerbated by the COVID-19 Pandemic

PRINCETON, NJ (April 15, 2021) – Mathematica, with support from the Schultz Family Foundation, today released its report, Youth Unemployment in the First Year of COVID-19: From the Breakout to the Vaccine Rollout, highlighting how disruptive COVID-19 has been on young people’s employment opportunities and the troubling differences in youth unemployment recovery rates based on race, ethnicity, and geography. Although the national unemployment rate dropping to 6.0 percent in March 2021 is an encouraging step to economic recovery, the report, based on a yearlong study throughout 2020, shows how the pandemic sparked extraordinarily high unemployment rates among young people ages 16 to 24 (more than double that of general adult population at the height of the pandemic) and further illustrated how the pandemic is disproportionately impacting Black, Indigenous, and People of Color (BIPOC) youth.

“Youth often work in industries hard hit by the COVID-19 crisis, such as food service and hospitality. As a result, young people, especially BIPOC youth, are particularly susceptible to the economic impacts of the pandemic,” said Mathematica’s Hande Inanc. “The economic crisis triggered by the COVID-19 pandemic exacerbated existing inequality, which is why continuing to monitor youth unemployment closely will be important for creating equitable opportunities and well-paying jobs for youth moving forward.”

“Employment provides youth essential opportunities to learn new job skills and expand their networks. Prolonged periods of unemployment can lead to long-lasting adverse outcomes, including lower earnings and increased risk of unemployment later in life. The pandemic impacts may further exacerbate the economic divide between BIPOC youth and their white peers for years to come,” added Tyra A. Mariani, president of the Schultz Family Foundation. “Partnering with a leading research organization like Mathematica allows us—and others working on issues of economic mobility—to leverage these data to focus our efforts on creating equitable access to opportunity for those most in need, so all young people can reach higher heights.”

Key learnings from the report include:

• Youth unemployment more than tripled between February and April 2020, jumping from 7.8 percent to 27.4 percent, exceeding the rate at the peak of the Great Recession, which was 19.5 percent in April 2010. Unemployment increases were more pronounced for youth than for adults ages 25 to 54, whose unemployment rates peaked at 12.8 percent in April 2020. This was attributed to youth’s concentration in retail and hospitality jobs that were affected by mandates to contain the virus, and lack of telework option in the sectors where youth are primarily employed. In the second quarter of 2020, job losses in retail (16.8 percent) and hospitality (45.8 percent) were among the highest across all industries.
• Beginning in May and continuing through September 2020, the economy recovered partially as some businesses re-opened and others brought back employees into seasonal jobs. During this time, unemployment declined particularly among white male youth. Among Black male youth, Asian American male and female youth, and Hispanic male and female youth, unemployment remained around 20 percent until September. After the summer, the recovery slowed down as some businesses permanently closed. In March 2021—12 months after the outbreak—youth unemployment was at 11 percent, 3 percentage points higher than it was before the pandemic, and remained higher among Black and Hispanic youth.
• Rising unemployment during the early stages of the pandemic was particularly pronounced among female youth and Asian American youth—groups that historically have had lower than average unemployment rates among young people during typical recessions. Business closures in industries that were hit hardest due to a decline in consumer demand and lack of remote work options led to a sharp increase in unemployment, particularly among female youth. Asian American youth, who are more likely to both work in the hard-hit industries and live in the hardest-hit regions, experienced unprecedented rates of unemployment, coupled with an increase in discrimination and racism due to COVID-19. During the first quarter of the pandemic, unemployment among Asian American male youth jumped from 5.4 percent to 23.9 percent and among Asian American female youth jumped from 7.0 percent to 25.8 percent. Asian American youth unemployment peaked at 14.7 percent during the Great Recession.
• Youth unemployment was particularly concentrated in areas where states introduced stricter containment measures in response to COVID-19 infections. The West Coast and the Northeast were hit hardest by COVID-19 early in the pandemic and thus adopted stricter stay-at-home orders and state policies to curb the spread of the virus, which led to a sharp increase in youth unemployment in the second quarter of 2020. During this period, a 10-point increase in the stringency index—a composite measure of nine indicators such as workplace closures and travel restrictions that captures the severity or intensity of coronavirus containment measures—corresponded to a 4.2 percentage point increase in the youth unemployment rate, whereas the unemployment rate for adults ages 25 to 54 increased by only 1.6 percentage points.
• Youth unemployment returned to pre-pandemic levels in many states and metropolitan areas by the end of 2020. However, youth unemployment rates in six states—Hawaii, Illinois, Massachusetts, Michigan, New Jersey, and Washington—remained at least 5 percentage points higher than before the pandemic. Youth unemployment fell in most metropolitan areas during the second half of the year except in Honolulu, New York City, Providence, and Miami. By the end of 2020, the metropolitan areas with the highest youth unemployment were San Francisco, Seattle, New York, Las Vegas, Providence, Chicago, Los Angeles, Detroit, and Miami.

To further highlight the impacts of COVID-19 on youth employment and bring these numbers to life, Mathematica created powerful data visualizations to put these numbers in the context of the Great Recession and highlight the impacts and inequities during the recovery. Having the ability to see, digest, and interpret the data can guide resources to enable equitable economic recovery. Equipped with this information, policymakers, foundations, and other key stakeholders that invest in programs for youth might consider allocating resources to the country’s hardest-hit communities.

View the report.

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