Saturday, October 26

Young women (not) in jobs

According to the English proverb, "one swallow does not a summer make". In statistical parlance: do not confuse noise for signal. This is particularly true at the time at which a trend might be emerging.

With those caveats in mind, let's look at the latest monthly unemployment data for females aged between 15 and 19 years. When I apply seasonal adjustment, I get two months of substantial growth in this cohort's unemployment rate. (In my view, there is not enough data yet to say we have a problem, but the scale of the change in the data we have intrigues me).

Because I am a nerd, let's look quickly at the seasonal decomposition and a cycle plot of the seasonal component for this cohort. Although September is not normally a peak in the unemployment rate for women aged 15 to 19 years, the unseasonal increase is evident in the raw data.

Certainly, we are not seeing the same degree of jump among similarly aged males (but we are seeing a jump).

The recent (post GFC) deviation in participation rates adds to the mystery. Why are men in this age cohort leaving the labour force at a faster rate than women. Is it because they are studying? Or is it because they have less perseverance than women (and the young men are simply dropping out).

What is worse? A high female unemployment rate or a low male participation rate? Both trends are suggestive of an emerging issue in the labour market for 15 to 19 year olds.

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