WASHINGTON — Teenager employment has dropped 20 percent since the 1980s, in part because more and more immigrants have flooded into the market to displace native-born kids from jobs in percentages far higher than on adults, according to the Federal Reserve.
“The displacement effect of immigration on the employment of younger persons is much larger than on the employment of prime-age adults,” the Washington Examiner quoted the September 2014 report, “Labor Force Participation: Recent Developments and Future Prospects.”
From The Federal Reserve:
More than five years after the Great Recession ended, the labor market has, by many metrics, finally shown substantial improvement. The unemployment rate is now nearly 4 percentage points below the peak reached in late 2009, and the number of nonfarm payroll jobs has returned to pre-recession levels. However, one lingering concern is the ongoing decline in the labor force participation rate and the concomitant absence of a significant rise in the percentage of the working-age population who are employed. In particular, the labor force participation rate has fallen from about 66 percent of the population in 2007 to about 63 percent over the first half of 2014, while the employment-to-population ratio currently stands at 59 percent, only about ½ percentage point above its low point in the wake of the recession.
To an important extent, this decline in the labor force participation rate likely reflects the ongoing influence of the aging population that was the focus of a Brookings Paper written nearly a decade ago, whose authors included a subset of us (Aaronson et al., 2006). Indeed, in that paper, we predicted further declines in the participation rate over the subsequent decade as the population continued to age and the baby-boom generation continued to enter their retirement years.
However, population aging cannot account for the entire decline in the aggregate participation rate, and the deep recession that was precipitated by the financial crisis, along with the slow economic recovery that has followed, have led some observers to ask whether cyclical factors may have played an important role as well – and, if so, whether many individuals who dropped out of the labor force because they became discouraged about their job prospects may eventually re-enter the workforce as the labor market continues to strengthen.
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