*The following is excerpted from an online article posted by The Brookings Institution.
From 2000 to 2018, the labor force participation rate of 16- to 64-year-olds fell 3.6 percentage points. In previous work, we have shown that declining labor force participation among young people contributed substantially to this decline. In this analysis, we describe how teenagers (16–19-year-olds) have shifted away from working or seeking work and the impact this shift has had on the aggregate labor force participation rate.
While declining summer employment is part of the story, the bulk of the teenage reduction in labor force participation comes from fewer teenagers being jointly enrolled in school and participating in the labor force during the academic year. We find that—despite the low teen share of the working-age population (8 percent)—if teens had still participated in the labor force at their 2000 rates, aggregate 16–64-year-old participation would be more than 1.3 percentage points higher.
Many factors are at play in the decline of teen labor force participation, including increased school enrollment, seasonal employment, decreased returns to work, reduced demand for low-wage work, minimum wage hikes, and competition from older workers or immigrants. Time pressure is another driver of reduced teen participation. Teens have many demands on their time and those demands fundamentally differ between the academic year and summer.
Most teenagers are compelled to be in school during the academic year, but may or may not work at the same time. There has been a decline in teenagers’ academic year (September to May) labor force participation. From 2000 to 2018, the share of teenagers working or seeking work while enrolled in school declined by 11.4 percentage points and the share of teenagers who are only working or seeking work decreased by 4.6 percentage points from 2000 to 2018, amounting to a total decline in teen labor force participation of 15.9 percentage points.
Whether this reduction in labor force participation during the academic year is a matter of concern depends on what teenagers are doing instead of working. If, for example, the share of teenagers who are neither participating in the labor force nor enrolled in school were increasing, then these trends could imply a rise in high school dropout rates and/or a decrease in postsecondary enrollment. However, the data shows a large increase in the share of teenagers who are only enrolled in school (15.3 percentage points) and a very small increase in the share of teenagers who are neither participating in the labor force nor in school (0.7 percentage points). The reduction in labor force participation is largely attributable to a declining share of teenagers who are simultaneously enrolled and participating in the labor market during the academic year.
The decline in teen labor force participation during the summer is even more dramatic. In contrast to the academic-year decline in labor force participation while enrolled, the sizable shift we observed during the summer is a straightforward replacement of labor force participation with school enrollment.