Why more Americans are wasting their youth than Europeans

October 8, 2012

Liberals and conservatives alike have turned Europe into the harbinger of what doom may come to America. “I think you’re going to see America on the road to Greece unless we change course,” Mitt Romney said in a recent interview. "Here in America, youth unemployment is 'only' 16.5 percent, which is still terrible — but things could be worse," Paul Krugman wrote in April, citing youth unemployment rates in Spain of more than 50 percent. 


Hundreds jam into the front of the Starboard wearing costumes in Dewey Beach, Del. (Lucian Perkins for The Washington Post)

But Europe's youths may not be as badly off as that eye-popping statistic suggests, while America's youths may be comparatively worse off. Jacob Funk Kirkegaard points out how these unemployment rates may be misleading.

The Organization for Economic Cooperation and Development's calculations that youth unemployment is at 53.8 percent in Greece and 52.9 percent in Spain, which sounds like real cause for alarm.


(OECD via Jacob Funk Kirkegaard)

But that doesn't mean that half of Spain and Greece's young people are sitting at home, idle, out of work, and checking Facebook. In Spain, Kirkegaard notes, 83 percent of those between 15 and 19 years old are in school, as are 39 percent of those between 20 and 24 percent. What's more, many Europeans countries also offer job training and apprenticeship programs to young people that don't count as full-time employment. So yes, a majority of those young people who are looking for jobs are having a very hard time finding work. But the job-seekers only represent a portion of those in this cohort.

Instead, Kirkegaard suggests that a better measure of "wasted youth" would be to look at the OECD's calculation of the share of young people "not in employment, education or training." This would encompass both young people who are looking for work but can't find it and those who have dropped out of the labor force altogether and aren't in school or job training. This paints a strikingly different portrait:


(OECD via Jacob Funk Kirkegaard)

 So there is still a higher proportion of "idle youth" in Spain and Greece than in the United States. But the rates of idleness are much closer than the sheer unemployment measure. In fact, on the whole, American youths today are idler and worse affected by the crisis than their euro area and British counterparts, Kirkegaard notes. "This result likely reflects the depth of the labor market contraction in the United States (which has been worse than the euro area and UK aggregate) and the fact that many American youth have fewer education and training opportunities than in Europe — especially following the dramatic cuts to US state and local government education budgets during the crisis."

Kirkegaard reminds us that this could have serious long-term consequences for the earning and employment prospects of America's next generation. That's one reason why policymakers are so concerned that a growing number of Americans are dropping out of the labor force altogether. 

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Brad Plumer · October 8, 2012