For point of reference, here is the Beveridge Curve for 35-44 Year Olds.
Compare that to the two age groups I posted yesterday:
I also wondered, after I posted the original material, what effects population changes or labor force participation changes might have on this output. The Boston Fed paper, by Rand Ghayad, used the unemployment of each group, expressed as a percentage of the entire labor force. This was useful in their analysis, but it does allow for changes in labor force levels to affect the appearance of these Beveridge Curve outputs.
Population and labor force changes don't affect the 20-34 year old group. But, they do have a small effect on the 35-44 and 45+ groups.
The labor force shifts among 16-19 year olds has been large enough to change the character of the shift for them, however. Adjusting for labor force changes makes the 16-19 year old pattern look more like the 20-34 year olds.
I know I'm a broken record on these issues, but I think this strengthens the argument that the effect among the 20-34 year olds (now among 16-34 year olds) is minimum wage related.
Employment loss and recovery showing up in 16-19 year olds earlier than in the other populations, and for much of the 16-19 year old employment losses to be reflected in changing labor force participation is typical pattern for the few federal minimum wage episodes that we can analyze.
The good news is that these groups are recovering as the minimum wage level is reduced in real terms over time.
PS. (Added) Here are the Beveridge Curves for the 3 main separate groups: The young group where the extra unemployment is from job leavers or entries, the middle aged group that didn't see much of a shift in the Beveridge Curve using the Boston Fed's measure, and the older group where the extra unemployment was from job losers (which have had especially long unemployment durations in this cycle, coincidentally with the very long Unemployment Insurance benefits). In these graphs, I have used age-specific labor force levels in the denominators so that changes in unemployment would not reflect relative changes in age-group population levels.
y=Openings Rate, x=unemployment rate |
y=Openings Rate, x=unemployment rate |
y=Openings Rate, x=unemployment rate |
The older group saw a large shift right in the Beveridge Curve, which has recovered slightly.
By around summer 2014, we'll see unemployment at 6.0% or less and the leading edge of the Openings/Unemployed ratio for the older age group in the same range as the pre-2008 ratio.
There, I've put the gauntlet down. Either, come summer, I'll be proven right, or there will be some previously unknown development that will have invalidated the test of the forecast. ;-)
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