Unemployment research paper

Women who have children under the age of 17 are less likely to be employed than women who do not have dependents that age. According to Model 2, Mizrahi women are more likely to be employed compared to women from other regions. According to both models, women originally from Asia or Africa ages 25—29 have a better chance of being employed than women the same age from other regions. Future research should examine this finding in depth to understand it.

However, in the 18—29 age categories, educated women were less likely to find a job compared to uneducated women, probably due to the same reason cited above for men in the same age group—the inflation of academic degrees Fuchs These findings become more nuanced when we consider the results of Model 2.

There, women with an academic or vocational education have a better chance of finding a job, but at the ages of 18—24 those with an academic education are less likely to find a job than those without an academic education. Finally, at the ages of 25—29, those with a vocational education have a better chance of finding a job than those without a vocational education, due to the stagnation in the overall share of individuals receiving post-secondary certificate Fuchs First, the effect of aging on women is more severe than the impact on men.

Finally, having children at home has a negative effect on both men and women—almost at the same magnitude. To determine whether unemployment of young workers is caused by the business cycle, we examined the unemployment figures in 34 OECD countries in —, years of economic crisis, and in —, years of recovery and economic growth. For each country, we considered the data on unemployment among young workers 15—24 and older adults 55—64 and calculated the difference between and and between and for both groups.

The data were taken from OECD publications and included information about the growth rates from to Our assessment of unemployment rates in 34 OECD countries reveals that the average rate of youth unemployment in was Both of the differences are significantly different from zero, and the delta for young people is significantly larger than the delta for adults. These results indicate that among young people 15—24 , the increase in unemployment due to the crisis was very large.

An OLS model of the reduced form was estimated to determine whether unemployment is a function of the business cycle, which is represented by the growth rate. In both periods, — and —, the coefficient of the change in growth rates is negative and significant for young people, but insignificant for adults. Thus, it seems that the unemployment rates of young people are affected by the business cycle, but those of older workers are not.

In a time of recession — , unemployment among young individuals increases whereas for older individuals the increase in unemployment is not significant. Dependent variable: the increase in the unemployment rate between and , and between and The purpose of this paper was to show that while the unemployment rates of young workers are higher than those of older workers, the data alone do not necessarily tell the whole story.

Our findings confirm our first hypothesis, that the high unemployment rate of young people stems mainly from the characteristics of the labor market and less from their personal attributes. However, the GDP rate of growth cannot explain adult unemployment.

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Our results also support our second hypothesis, that the difficulties faced by unemployed older workers when searching for a job are more a function of their age than the overall business environment. Indeed, one limitation of the study is the fact that we could not follow individuals over time and capture individual changes. We analyze a sample of those who have been unemployed in the previous year and then analyze the probability of being employed in the subsequent year but cannot take into account people could have found a job in between which they already lost again.

Yet, in this sample we could isolate and analyze those who did not work last year and look at their employment status in the present. By doing so, we found out that the rate of those who found a job declines with age, and that the difficulties faced by unemployed older workers stems mainly from their age. To solve both of these problems, youth unemployment and older workers unemployment, countries need to adopt different methods.

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Does Ultra-Low Unemployment Spur Rapid Wage Growth?

Creating more jobs will help young people enter the labor market. Creating differential levels for the minimum wage and supplementing the income of older workers with earned income tax credits will help older people re-enter the job market. Further research may explore the effect of structural and institutional differences which can also determine individual unemployment vs.

In addition to presenting a theory about the factors that affect the differences in employment opportunities for young people and those over 45, the main contribution of this paper is demonstrating the validity of our contention that it is age specifically that works to keep older people out of the job market, whereas it is the business cycle that has a deleterious effect on the job prospects of younger people.

Given these differences, these two sectors of unemployment require different approaches for solving their employment problems.

The common wisdom maintains that the high level of youth unemployment requires policy makers to focus on programs targeting younger unemployed individuals. However, we argue that given the results of our study, policy makers must adopt two different strategies to dealing with unemployment in these two groups. In order to cope with the problem of youth unemployment, we must create more jobs.

The impact of labour market regulation on the unemployment rate: Evidence from OECD economies

When the recession ends in Portugal and Spain, the problem of youth unemployment should be alleviated. Since there is no discrimination against young people—evidenced by the fact that when the aggregate level of economic activity and the level of adult employment are high, youth employment is also high—creating more jobs in general by enhancing economic growth should improve the employment rates of young workers.

In contrast, the issue of adult unemployment requires a different solution due to the fact that their chances of finding a job are related specifically to their age. One solution might be a differential minimum wage for older and younger individuals and earned income tax credits EITC 9 for older individuals, as Malul and Luski suggested.

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According to this solution, the government should reduce the minimum wage for older individuals. As a complementary policy and in order to avoid differences in wages between older and younger individuals, the former would receive an earned income tax credit so that their minimum wage together with their EITC would be equal to the minimum wage of younger individuals. Earned income tax credits could increase employment among older workers while increasing their income. For older workers, EITCs are more effective than a minimum wage both in terms of employment and income. Such policies of a differential minimum wage plus an EITC can help older adults and constitute a kind of social safety net for them.


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Imposing a higher minimum wage exclusively for younger individuals may be beneficial in encouraging them to seek more education. Young workers who face layoffs as a result of their high minimum wage Kalenkoski and Lacombe may choose to increase their investment in their human capital Nawakitphaitoon The ability of young workers to improve their professional level protects them against the unemployment that might result from a higher minimum wage Malul and Luski For older workers, if the minimum wage is higher than their productivity, they will be unemployed.

This will be true even if their productivity is higher than the value of their leisure. Such a situation might result in an inefficient allocation between work and leisure for this group. One way to fix this inefficient allocation without reducing the wages of older individuals is to use the EITC, which is actually a subsidy for this group.

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However, a necessary condition for this suggestion to work is the availability of efficient systems of training and learning. Axelrad et al. They found that stereotypes about older workers might lead to a distorted allocation of the labor force. Subsidizing the work of older workers might correct this distortion. Ultimately, however, policy makers must understand that they must implement two different approaches to dealing with the problems of unemployment among young people and in the older population. HA drafted the initial manuscript.

What’s the Truth about Unemployment? | Mercatus Center

MM and IL reviewed and revised the manuscript. All authors read and approved the final manuscript. The authors declare that they have any no competing interests. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. The publication contains detailed data on labor force characteristics such as their age, years of schooling, type of school last attended, and immigration status.

It is also a source of information on living conditions, mobility in employment, and many other topics. As long as they are not out of the labor force due to medical reasons or their mandatory military service, we classified them as "did not manage to find a job. Hila Axelrad, Phone: , Phone: , Email: li. Miki Malul, Phone: , Email: li. Israel Luski, Phone: , Email: li. National Center for Biotechnology Information , U.

Journal for Labour Market Research. J Labour Mark Res. Published online Mar 8.


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  8. Author information Article notes Copyright and License information Disclaimer. Corresponding author. Received Sep 22; Accepted Feb This article has been cited by other articles in PMC. Abstract In this research we show that workers aged 30—44 were significantly more likely than those aged 45—59 to find a job a year after being unemployed.

    Introduction Literature about unemployment references both the unemployment of older workers ages 45 or 50 and over and youth unemployment 15— OECD countries during the post crisis The recent global economic crisis took an outsized toll on young workers across the globe, especially in advanced economies, which were hit harder and recovered more slowly than emerging markets and developing economies.

    Israel From an international perspective, and unlike other developed countries, Israel has a young age structure, with a high birthrate and a small fraction of elderly population. Open in a separate window. The percentages of discouraged workers are calculated from the civilian labor force after including them in it Source: Calculated by the authors by using data from the Labor Force survey of the Israeli CBS, Percentage of total employed persons ages 20—75 and over including those dismissed Source: Israeli Central Bureau of Statistics, , data processed by the authors.