Journal Article

The Impact of Young Workers on the Aggregate Labor Market

Robert Shimer

in The Quarterly Journal of Economics

Published on behalf of President and Fellows of Harvard University

Volume 116, issue 3, pages 969-1007
Published in print August 2001 | ISSN: 0033-5533
Published online August 2001 | e-ISSN: 1531-4650 | DOI: http://dx.doi.org/10.1162/00335530152466287
The Impact of Young Workers on the Aggregate Labor Market

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An increase in the share of youth in the working age population of one state or region relative to the rest of the United States causes a sharp reduction in that state's relative unemployment rate and a modest increase in its labor force participation rate. This is inconsistent with many theories of the labor market, but can be easily explained by a model of frictional unemployment with on-the-job search. The theory makes strong predictions regarding the behavior of wages which are shown to be consistent with the data. The paper also reconciles its findings with an existing body of apparently contradictory empirical evidence.

Journal Article.  0 words. 

Subjects: Economics

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