The "Youth Problem"

This paper attempts to distinguish between two alternative views of the labor market problems faced by young workers in a number of industrialized countries in the 1970s and early 1980s. The first view is that the low relative earnings and high unemployment rates experienced by these workers were largely "age" related. Although this view carries the implication that the problems will disappear for recent youth cohorts as they grow older, it also implies that the problems will be "handed over" to successive waves of youth cohorts as they enter the labor market. The second view is that the labor market problems of recent youth cohorts are a consequence of their large size. This view has very different implications since generational crowding can permanently or temporarily depress the economic position of large cohorts but need not have an adverse effect on later waves of smaller youth cohorts. On the basis of a multicountry empirical analysis of patterns ofcohort size, earnings, unemployment, and the distribution of young workers across industries, we have four main sets of findings to report. First, the baby-boom was not uniformly experienced across OECD economies - in terms of eith