Increasing Employment Opportunities for Disadvantaged Young Adults
Author: Hossain, Farhana
Date: 2015-02-00
Type: Reports - Descriptive
Subjects: Disadvantaged Youth,Young Adults,Economically Disadvantaged,Equal Opportunities (Jobs),Labor Market,Low Income Groups,Minority Groups,Job Training,Personnel Selection,Employers,Supply and Demand,Unemployment,Incentives,Decision Making,Wages,Job Skills,Skill Development,Intervention

In the past four decades, profound changes in the U.S. economy--including falling wages, widening inequality, and the polarization of jobs at the top and bottom of the education and wage distributions--have had dramatic implications for the labor-market fortunes of young adults. Only about half of young people ages 16 to 24 held jobs in 2014, and about one in five people in this age range were neither working nor in school. The problem is most severe for disadvantaged groups, including less educated, low-income, and minority young people, especially young men of color. Most efforts to improve employment outcomes for young people have focused on supply-side strategies such as education, training, work experience, or developmental activities. MDRC recently conducted an extensive review of literature on labor-market trends and employment-related programs for young people, and identified some common features of successful supply-side programs. Yet hiring practices have continued to evolve since much of the research covered in the review was done, and new approaches may be necessary to address those changes. Stakeholders interested in improving the employment outlook of young people on a large scale are increasingly interested in demand-side approaches--that is, engaging employers to take action on this issue. New research is needed into what types of demand-side interventions can be successful. Given the magnitude of the unemployment problem facing young adults, potential solutions need to be adopted on a greater scale than the programs in the literature review generally contemplated. With all these issues in mind, on June 4, 2014, MDRC and The Rockefeller Foundation convened a group of academics and experts to discuss potential demand-side approaches to youth employment. The wide-ranging conversation reflected the diverse backgrounds of the attendees, who contributed insights from the worlds of education, economics, business, and social policy. This report discusses the following themes that emerged from the conversation: (1) Employers are a heterogeneous group with diverse needs, goals, and preferences; (2) Employers may respond to financial incentives, but incentives are not likely to be the only force motivating their decisions, and wage subsidies have actually been shown to stigmatize groups of workers; (3) Employers are more likely to engage in youth employment efforts if it is easy for them to do so, and if they believe it is a positive opportunity for their businesses; (4) Employers' growing use of third parties to recruit and screen new employees has significant implications for efforts to increase the hiring of disadvantaged young adults; (5) Widespread adoption of computerized applicant tracking systems has also changed the way employers interact with job seekers; (6) In the face of these changing practices, disadvantaged young workers need assistance communicating their skills and experience. Credentialing mechanisms could help; (7) Simple forms of support in entry-level jobs can put young adults on the path to success; and (8) To address the issue of youth unemployment at a transformative scale, demand-driven approaches can take on whole geographic areas or whole industries. The conversation and MDRC's review of research evidence both underscore the need for more definitive evidence to determine what works in helping disadvantaged young adults improve their labor-market outcomes.