Who is Hit Hardest During a Financial Crisis? The Vulnerability of Young Men and Women to Unemployment in an Economic Downturn

36 Pages Posted: 18 Aug 2009

See all articles by Sher Verick

Sher Verick

International Labour Organization (ILO); IZA Institute of Labor Economics

Abstract

The current financial and economic crisis has resulted in the worst global recession since World War II. The subsequent destruction of jobs and increased duration of joblessness will ensure that unemployment across the world will continue to rise and stay stubbornly high for some time to come, well after the economy has begun to recover. Beyond this generalization, such downturns have more adverse implications for vulnerable segments of the population such as youth. As presented in this paper, data for both the current and previous financial crises reveals that young people are indeed hit hardest as reflected by rising unemployment rates, which persist long after the economy is growing again. In the wake of the present downturn, young men have been particularly affected, which has been driven by a range of factors including the high proportion of young men in heavily impacted sectors such as construction. In response to this situation, policymakers should utilize targeted crisis interventions that aim to keep youth employed where possible, while also assisting new entrants and those who have lost jobs find employment (or at a minimum stay attached to the labour force), particularly as the economy recovers.

Keywords: unemployment, youth unemployment, financial crisis

JEL Classification: G01, J21, J64, J68

Suggested Citation

Verick, Sher, Who is Hit Hardest During a Financial Crisis? The Vulnerability of Young Men and Women to Unemployment in an Economic Downturn. Available at SSRN: https://ssrn.com/abstract=1455521 or http://dx.doi.org/10.2139/ssrn.1455521

Sher Verick (Contact Author)

International Labour Organization (ILO) ( email )

Route des Morillons 4
Geneva, 1211
Switzerland

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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