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Economic Trends

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Economic Activity and Labor

Younger Workers and Summertime Employment

Each year before summer begins, a substantial number of high school and college students enters the labor market, as they look for temporary or permanent employment. Many of them do in fact find a job. This year, the number of employed workers between the ages of 16 and 24 increased 2.3 million from April to July, according to a recent report by the Bureau of Labor Statistics.

In addition to the workers in this age group who found jobs, there were others who were looking but didn’t find one—the sum of these two being the total youth labor force. The size of this labor force increased over the period as well, from 21.4 million to 24.3 million. As a result, the labor force participation rate for this age group rose from April to July as well, from 57.4 percent to 65 percent.

The summertime employment of younger workers typically peaks around July, and this year was no different. The bulk of the increase occurred in June—almost 70 percent of the additional 2.3 million young workers entered the employment pool in June alone.

The industry employing the greatest percentage of these young workers in July 2007 was leisure and hospitality (22 percent). Retail trade was second in terms of industries employing workers in this age group (close to 20 percent). Youths employed in other industries—education and health services, professional and business services, government, construction, and manufacturing—totaled nearly 40 percent.

Some differences emerged in the summer labor market outcomes of males and females in this age group. The rise in the labor force participation rate of younger workers was somewhat stronger among men than women—it rose 13.7 percent for men, 12.7 percent for women. The rise in employment between April and July was likewise significantly higher for men, generating a 13 percent rise in the employment-to-population ratio, whereas for women the ratio rose only 10 .6 percent. The relatively higher rate of men’s employment during this period also translates into a smaller increase in the number of those that remained unemployed throughout the same period. Even though the male labor force expanded substantially, a significant proportion of male workers were able to find jobs during this period, resulting in only a 4.7 percent rise in their unemployment rate from April to July. Young women were not as successful in finding employment and experienced a 20.4 percent rise in their unemployment rate during the same period.

Economic Trends is published by the Research Department of the Federal Reserve Bank of Cleveland.

Views stated in Economic Trends are those of individuals in the Research Department and not necessarily those of the Federal Reserve Bank of Cleveland or of the Board of Governors of the Federal Reserve System. Materials may be reprinted provided that the source is credited.

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