Young Adults are Disconnected from Work and School Due to Long-Term Labor Force Trends

Disconnected youths (often referred to as “opportunity youth”) are young people who are neither in school nor working, missing opportunities to both earn and learn. They are also more likely to suffer from challenges in adulthood such as lower lifetime earnings, a greater chance of unemployment, and poorer health. Disconnection therefore affects labor force productivity in the long run. This means helping these youths return to work or school provides short- and long-term benefits for them and their potential employers alike. This first article of a two-part series from the Federal Reserve Bank of Dallas shows findings that the sharp rise in disconnected young adults during the COVID-19 pandemic is the exacerbation of a problem that has gradually worsened in the past two decades. While attention was paid to decreases in school enrollment during the pandemic, identifying long-term solutions to both employment and enrollment are important to reduce disconnection among young adults.