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Young men and the transition to stable employment

Monthly Labor Review - August 1, 1994

Although the vast majority of our young people leave high school to go directly to work, we typically offer them little or no assistance in this transition....The result is that typical high school graduates mill about in the labor market, moving from one dead-end job to another until the age of 23 or 24.

--Report by the Commission on the Skills of the American Workforce entitled America's Choice: High Skills or Low Wages, 1990, p. 46

One frequently heard criticism of the U.S. education system is that it fails to provide a smooth transition for the average student who proceeds to the labor market directly after graduating from high school. Such young people are often characterized as facing a "period of floundering"--from high school graduation through their mid-20's--during which they move into and out of the labor force, holding numerous jobs, none for very long, and being unemployed in between. Instead of settling into longer term jobs, these youth are portrayed as "milling about" or "churning," with no clear progression toward any career.(1)

This article explores whether the preceding characterization of the transition from school to work is accurate for the bulk of U.S. youth. We use data on young men from the National Longitudinal Survey of Youth to estimate the distribution of their ages at entrance into jobs lasting various lengths of time--specifically, 1, 2, and 3 years. We view the time taken to reach a job with a 1-, 2- or 3-year tenure as the period of "settling down." Although we do not examine the characteristics of these jobs (for example, the wages they pay or their "quality"), our approach offers a useful way to characterize the amount of "milling about" in the labor market by U.S. youth.

Consistent with much of the the previous literature on the subject, we find that young U.S. males hold a large number of jobs in their first few years in the labor market (even after excluding jobs held prior to leaving full-time schooling). Nevertheless, our dynamic perspective provides little support for the conventional wisdom that the typical male high school graduate does not settle into a long-term employment relationship until his mid-20's. For the youth cohort of the National Longitudinal Survey, the median male high school graduate secured a job that would last more than a year shortly after his 19th birthday, a job that would last more than 2 years shortly after his 20th birthday, and a job that would last longer than 3 years while he was 22.

There is, however, considerable heterogeneity among these young jobseekers: whereas the median male high school graduate secured his "3-year job" while he was 22, his classmate in the first quartile of high school graduates obtained that job while he was 19, and his classmate in the fourth quartile of high school graduates did not get such a job until after he turned 25. There is also heterogeneity across education groups: while the median male high school graduate secured his "3-year job" while he was 22, the median high school dropout, who first entered the labor force several years earlier, did not enter that job until he was 23, and, in contrast, the median college graduate, who entered the labor force 4 years later than the high school graduate did, entered his "3-year job" shortly after turning 23.

The article first briefly reviews some of the literature on the transition from school to work (that is, the process of "settling down"), then describes the data and methods we employ, and, finally, presents our empirical results. The article concludes with a summary of these results and a discussion of directions for future research.

Background

Non-college-bound young men leaving school are sometimes described as drifting from activity to activity until their mid-20's, when they finally settle into long-term commitments to fulltime jobs. During the period beginning with their leaving school and ending in their finding stable employment (jobs lasting several years), young people are perceived as spending a long period of unproductive time in school, in "dead-end" jobs, unemployed, or not even looking for work, with a "consequent loss of training and productivity."(2) According to one source:

The early years in the labor market for many graduating students are characterized not by an absence of jobs but rather by a "churning" process. High turnover and frequent job change are evident during this period when youth sample different jobs or simply move from one low-skill job to another. The phenomenon of churning represents a characteristic of the youth labor market that has important implications for program design.... What happens when the period of churning has concluded? Evidence suggests that a substantial fraction of this cohort has been unable to "settle down" into quality jobs. In the past, most youth in their late twenties--even if they did not attend college--could expect eventually to obtain stable employment; this is no longer true....[A]s many as 50 percent of high school youth had not found a steady job by the time they reached their late twenties.(3)

This characterization implies that the transition period is spent unproductively. Two other perspectives have been advanced. One characterizes the period as time spent in "productive job shopping":(4) in the individual-choice-oriented U.S. society, young people try out various jobs, until they find something amenable to their tastes.(5) The other perspective views the period as one of equalizing leisure:(6) the intermittent employment pattern of non-college-bound youth allows them to reproduce the leisure pattern of their college-bound peers, who spend 4 years in an environment with a long summer vacation, several other vacations during the year, and a relatively flexible weekly schedule.

Finally, some perceive the transition as proceeding smoothly.(7) Meyer and Wise conclude that

In general, summary statistics based on the National Longitudinal Study (High School Class of 1972) do not suggest severe employment problems for these high school graduates. On the contrary, they suggest a group of persons moving rather smoothly into the labor market.(8)

In contrast, some foreign countries have education systems that are often characterized as having a close relationship between schools and employers. Formal institutions, such as apprenticeships in Germany, and informal institutions, such as the "contracts" between Japanese schools and employers, help students in other countries gain the skills employers want and then help the students make smooth transitions from school to work.(9) Prewo writes:

Seventy percent of young Germans sign up for apprenticeships--and, if they perform well, guaranteed jobs. Contrast this with the aimless wandering from minimum-wage job to minimum-wage job of many American high-school graduates. At age 25, Americans who have not attended college often find themselves no higher up the job ladder than they were at age 18. Their German counterparts, by contrast, usually hold well-paying skilled jobs.(10)

The empirical facts and their correct interpretation are important as policymakers and educators design programs to improve the transition from school to work. Many analysts see this high level of turnover, or "churning," as the cause of workers' low levels of skill and low wages:(11) because young workers will not stay on the job long enough to allow employers to recoup training costs through increased productivity,(12) many employers will not hire them, and those who do hire them do so at low wages and do not provide much training.

Paul Osterman and Maria Iannozzi, who have a negative view of the transition period, make explicit the link from the empirical facts of "churning" or "milling about" to program design:

For the bulk of youth not bound for college, the problem that public policy must address is not the simple absence of jobs but rather the difficulties these youth face in settling down into quality jobs in the adult labor market--a problem that has been exacerbated by rising skill requirements. If we accept a period of churning as part of the process, many of the ideas regarding improved information systems between schools and employers seem less compelling.(13)

The empirical questions are "How long does the churning period last?" and "Is it an inevitable part of the process of entering the labor market?"

Data and methods

The data. The civilian sample of the Bureau of Labor Statistics sponsored National Longitudinal Survey of Youth began in 1979 with 12,686 young people aged 14 to 22 that year.(14) Blacks, Hispanics, and economically disadvantaged whites were oversampled. The sampled individuals have been reinterviewed annually through 1990; thus, the sample is now old enough (25 to 32 years in 1990) for us to examine nearly completed transitions from school to work.

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