As an add-on to yesterday’s post on declining male labor force participation, I wanted to look at the age structure of who isn’t working and how it’s changed over time. Not surprisingly, a high and rising portion of older male teens aren’t working since they’re in school (NILF=Not in Labor Force):
If you subtract those enrolled in school, however, you can see there are really two peaks for those neither enrolled in school nor working or looking for work (NEET=Not in Education, Employment, or Training):
That is, if you look at the green dots, almost 20% of men in their late 20s in 2014 were neither in school nor looking for work, almost twice as many as in 1994. The increase in this category in men’s 30s and early 40s is also substantial, but surprisingly (given the NY Times’ claims about the centrality of pain and disability to this increase) the increase is relatively less for men in their late 40s and early 50s. Zooming in to look only at under 35-year-olds:
To my eye, the current “peak NEET years” of 25-26 don’t look like they were nearly as much of a thing in the early 90s, grunge rock notwithstanding. I’d be tempted to blame changes in the marriage market for this (men are more likely to give up on looking for work since they don’t believe starting a traditional family is a realistic option, at least in their 20s), though there are certainly ample other possibilities. To continue focusing on disability, for example, there is at least some evidence that changes in disability law in the early 90s encouraged young adults diagnosed as disabled to stay on SSI-D longer and to work less as adults:
In response to the Supreme Court decision Sullivan v. Zebley, the Social Security Administration (SSA) instituted new, less stringent disability criteria that disproportionately affected child applicants with mental disorders relative to those with physical disorders. The policy change also occurred earlier in some people’s lives than others. Using confidential administrative data from SSA to implement an age cohort based difference-in-differences strategy, I show that for individuals with a mental disorder, each additional year of exposure to eased standards during childhood increases SSI receipt by 0.3 years. The additional benefit receipt reduces cumulative labor market earnings through age 30, more so for cohorts with a longer duration of exposure; cumulative earnings through age 30 are $1,600 lower for each additional year of exposure for those with mental disorders. Though I find that SSI receipt as a child reduces adult labor market earnings, this does not address the full range of outcomes that may be affected by receiving benefits.
Since only a few percent of families with children receive disability benefits, of course, this could only account for a small portion of the roughly 10 percentage point increase in the portion of men in their mid twenties who are neither in work nor in school.
Data taken from CEPR’s Uniform CPS Data Extracts.