Effects of the Youth Unemployment in Kenya

16576 Words Aug 21st, 2011 67 Pages
The Long-Term Effects of
Youth Unemployment
Dr. Thomas A. Mroz and Dr. Timothy H. Savage
University of North Carolina, Chapel Hill and Welch Consulting Economists
A STUDY BY THE EMPLOYMENT POLICIES INSTITUTE October 2001 he Employment Policies Institute (EPI) is a nonprofit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI research focuses on issues that affect entry-level employment. Among other issues, EPI research has quantified the impact of new labor costs on job creation, explored the connection between entry-level employment and welfare reform, and analyzed the demographic distribution of mandated benefits. EPI sponsors nonpartisan research that is conducted by
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Not surprisingly, average level of education and training increased over time, while the number in school decreased steadily. These statistics all show that human capital increased steadily over the sample period for the average male of that age. The core subject of the research, however, is an examination of the effects of a period of unemployment on future employment.
Lost Jobs Lead to Decreased Wages
Early unemployment delays gains in experience and training that usually lead to increased earnings.
Prior work experience has been found to have a large and positive effect on future earnings, which is disrupted by an unemployment spell.
A 13-week unemployment spell last year
The Long-Term Effects of Youth Unemployment
I
1979 3.32
1986 4.20
1993 2.83
Annual Weeks of Unemployment
During the Year - for Study Sample reduces wages this year by 3.4%, or about $900
(in 1993 dollars) for a full-time employee. A similar unemployment spell as long as four years ago reduces average hourly earnings by over 1%.
At full-time in 1993, this amounted to over $300.
A six-month unemployment spell experienced as long as four years ago reduces wages by 2.3%, equivalent to forgoing about one-quarter of a year of schooling.
Past Unemployment and Future
Unemployment
In addition to suffering from lower wages after experiencing an unemployment spell, many are subject to increased likelihood of future unemployment.
Not only do they have