The British have a term for idle teenagers and young adults: NEETs. It stands for “not in employment, education, or training.” As might be expected, their numbers in this country have grown sharply during the Great Recession—by about 1.2 million 16-to-24-year-olds, or a little more than 20 percent, since the end of 2007. Even now, as the labor market slowly improves and some of these NEETs find jobs, there is reason to worry about the long-term effects of the recession on the young, who have borne much of its brunt. This downturn has been characterized by a severe fall-off in hiring and a modest rise in the layoff rate—modest, at least, relative to the downturn’s depth. This combination has had the effect of sparing people who already have a job (and tend to be older) at the expense of those who are looking for one.
With fewer jobs, more 20-somethings have moved back home with their parents. They have also delayed getting married and having children. Not all of the social trends are bad. Surprisingly, the crime rate and the divorce rate have continued falling. But the economic toll is still a pernicious one: young people have been robbed of opportunities at a time in life when getting workplace experience may be most valuable. Lisa Kahn, a labor economist at Yale, has found that white males who graduated from college during and just after the recession of the early 1980s—which was similar in severity to the recent one—paid a permanent price. Even 15 years later, they were making 10 percent less, on average, than workers who had graduated in good times. It’s a safe bet that the impact on those grads who couldn’t land work for a while—the NEETs—was even worse.