Age Structure and the UK Unemployment Rate

Abstract

The proportion of youths in the labor force has fallen dramatically in the past 15 years, following the collapse in the birth rate in the 1970s (the 'baby bust'). Youths always have higher unemployment rates than adults, so this change in the composition of the labor force may have contributed to a fall in the aggregate unemployment rate. Based on data from the Labor Force Survey, it appears that about 0.55 percentage points of the 5.65 percentage point fall in the UK unemployment rate between 1984 and 1998 can be accounted for by changes in the age structure of the labor force.