Cyclical and noncyclical unemployment differences among demographic groups.

Abstract

The objective of this study was to determine if 1) the full employment-unemployment rate, or natural unemployment rate, changed between 1954-79 differentially for various subgroups in the US population; 2) minimum wage laws and unemployment compensation impacted differentially on subgroups in the population; and 3) there were structural shifts in the determinants of unemployment and labor force participation rates among subgroups. The 6 subgroups investigated were white and nonwhite teenagers, white and nonwhite females, and white and nonwhite males. Trends and cycles in unemployment were analyzed using regression techniques and basic time series models, and structural changes in the unemployment rate were analyzed by using a technique developed by Brown, Durbin, and Evans to test for change in estimated regression coefficients. Results indicated that the natural unemployment rate in the US increased from 4.70% to 5.14% between 1959-79. This increase was due in part to the unemployment rate increases observed among different subgroups in the population, and expecially among teenagers. In 1979 the unemployment rates among teenagers were 13.6% for whites and 28.72% for nonwhites. Respective rates in 1979 for white and nonwhite adult females were 4.20% and 9.98%, and for white and nonwhite adult males they were 2.78% and 6.36%. Other findings were 1) increases in minimum wage had a positive impact on the nonwhite teenagers' jobless rates, no effect on the white teenager jobless rate, and a negative impact on the adult unemployment rate; 2) increased unemployment compensation was positively associated with higher jobless rates for adult males and nonwhite teenagers; 3) the jobless rate was not significantly related to changes between 1954-79 in the proportion of different age, sex, and race groups in the population; and 4) structural shifts in the determinants of unemployment were observed for secondary workers only. Tables provided the results of the regression analysis, estimates of unemployment rates, by race, sex, and age for 1959, 1969, and 1979, and labor force composition and employment rates by race, sex, and age for 1954 and 1981.