Recovery from the COVID-19 Recession: Uneven Effects among Young Workers?
We test for heterogeneity in the effects of the COVID-19 recession on young workers by estimating month-by-month effects of the pandemic on labor market outcomes among workers aged 15-19 and aged 20-24. We use CPS data from January 2016 to June 2021, limiting the sample to childless individuals who lack a college degree. In the younger group (aged 15-19), we observe the expected sharp reduction in outcomes at the start of the pandemic, followed by a return to pre-pandemic levels of work hours, employment, and labor force participation starting in September 2020, with outcomes even surpassing pre-pandemic levels in April and May 2021. In the older age group (20-24-year-olds), however, work hours, employment, and labor force participation were still lagging below pre-pandemic levels as of June 2021. As of June 2021, weekly earnings and hourly wages were higher than typical pre-pandemic levels for that month for both age groups. Although we cannot test directly whether enhanced UI programs have played a role in these differences by age group, our findings show that within the 15-24-year-old age group, there is significant heterogeneity in labor market recovery from the COVID-19 recession.
Yue Li has received grants from the NSF and SSA via the NBER for some other projects. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.