The 16-19 age group was hardest hit, but has also rebounded with job growth unmatched by any other age group.

By Manuel Gutierrez, Consulting Economist to NKBA

It’s a given that the economic impact of COVID-19 varied greatly, with industry employment among the most telling factors. Those employed in non-essential public-facing sectors, such as hospitality, were among the hardest hit, while essential workers remained employed throughout the pandemic period.

The effects of the pandemic also differed by age group. Broadly speaking, the younger the group, the harder the hit. Many younger workers, particularly teens, work part-time, and often in retail or fast-food environments. These jobs were typically first to go during the pandemic shutdowns, but can be easiest to rehire because of their nature.

First, though, it’s instructive to examine general population trends by age.

Workers age 16 to 19 are the only group to have a higher workforce participation rate now than they did before the pandemic began.

Figure 1 displays employment as a percentage of working-age population for six age groups. A quick overview of this chart reveals several points.

For most groups, except for those at the extremes, there was an increase in percentage employed between 1950 and 1990. For example, approximately 60% of those age 25 to 34 were employed in 1950, with the ratio growing to just under 80% by 1990. The pattern is similar for all groups between 20 and 54 years old. The ratio increased through 1990 primarily because of the large influx of women entering the work force.

For the next 15 years, between 1990 and 2005, the pattern remained relatively stable until the recession of 2007-2009 resulted in a drop in the employment-to-population ratio.

It was different for the youngest and oldest segments, however, with the ratio for both fairly stable to 2000. Neither was much different in 2000 from what it was in 1950. Among 16-to-19 year-olds, for instance, the employment rate was 44% in 1950 and 45% in 2000.

However, since 2000, there were dramatic changes in the ratio for both age groups, particularly the younger crowd. By most employment metrics, the most severe impact was felt among the youngest and oldest populations. Table 1 displays changes for three metrics, the Employment-to-Population Ratio (Figure 1), the Labor Force Participation Rate and the Unemployment Rate between January and April 2020. That’s the period when the pandemic had the biggest impact.

The Employment-to-Population Ratio drop was biggest among 16-to-19 year-olds, falling by 34%. This is followed by the 20-to-24 group, which fell by 29%. The third-largest slide is for those age 55 and up, at 17%, with those age 25 to 34 just behind at 16%.

The smallest declines are for the middle age groups ranging from 35 to 54 years old.

For labor participation, the two youngest groups fared the worst.

In Table 2, the same measures are displayed, but a wider time frame is used, from January 2020 through May 2021.

In this comparison, the biggest improvement is for those age 16 to 19, which actually shows an employment gain over that time period. They have also become more active in the labor force with a participation rate in May 2021 that is 2.2% higher than in January 2020. Conversely, those aged 55+ fared worst of all for the employment-to-population ratio.

A possible explanation for the strong numbers among teens is that they are usually cheaper, working in entry-level positions. They can bounce from job to job as they aren’t yet on a formal career path, and since they’re usually part-timers because of school, they don’t require benefits — making them attractive to employers. Finally, they’re not benefitting from government cash appropriation programs, which could actually be discouraging many others from actively seeking work.

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