Youth disconnection during the COVID-19 pandemic

We estimate a model of labor market transitions to understand the surge in youth disconnection and subsequent decline in school enrollment that occurred over the course of the COVID-19 pandemic. We highlight three observations. First, the collapse in full-time work during the spring of 2020 drove the rise in disconnection; however, in addition to the large number of young people becoming disconnected from full-time employment, the transition into full-time work also became more challenging. While transitions to full-time work from full-time work fell by 14 percent, transitions from part-time work and school fell by 43 percent and 28 percent, respectively. Second, transitions from full-time work and school into disconnection remain elevated through 2021 even as the unemployment rate reached historic lows. Finally, comparing the pandemic labor market transitions to the Great Recession, school no longer works as a safe harbor for those who are already enrolled: the surge in persistence in schooling that occurred during the Great Recession is not observed during the pandemic. These compositional changes illustrate the value of measurement of the youth labor market that goes beyond the unemployment rate.