Youth Unemployment Steadily Declined in 2021, but the Overall Trends Mask Important Demographic and Geographic Differences

As a new generation of young people prepare to enter the labor market—perhaps for the first time—they will do so under rapidly changing conditions, and with important distinctions based on demographic and geographic differences. These are among the key findings from a new report released today by Mathematica, with support from the Schultz Family Foundation, looking at youth unemployment during the second year of the COVID-19 pandemic.

During 2021, as businesses reopened and the American Rescue Plan distributed millions of dollars of relief funds, youth unemployment steadily declined from 11.3 percent in January to 8.2 percent in December. Although the national trend was positive and youth unemployment decreased in every state over the course of the year, young people continued to struggle to find and keep jobs due to COVID-related closures and the pandemic’s wide-ranging impacts on the labor market. For key demographic groups and in geographic areas, these struggles have been even more profound.

• Youth unemployment rates in Colorado, Hawaii, Maryland, and Massachusetts remained well above their pre-pandemic levels.
• Maryland and Mississippi experienced the highest youth unemployment rates (13.4 percent) in 2021, while Utah (4.8 percent), North Dakota (5.4 percent), South Dakota (5.4 percent), and Oklahoma (5.7 percent) had the lowest.
• Black youth (14.8 percent) continued to have the highest unemployment rates in 2021, followed by Hispanic youth (11.0 percent), Asian youth (9.7 percent), and White youth (8.5 percent).
• At the onset of the pandemic, the unemployment rate among Asian youth rose more than 2.5 times faster than other groups. In 2021, their unemployment rates were also slower to improve.
• Baltimore had the highest rate of youth unemployment (14.6 percent) among the 50 metropolitan areas included in this study.

“While 2021 brought mostly good news for young people looking to enter the labor market, it’s important to remember that these improvements come on the heels of an unprecedented spike in youth unemployment during 2020 as COVID-19 related closures affected retail and hospitality jobs that typically employ many young people,” said Mathematica’s Hande Inanc. “Policymakers and others dedicated to tackling youth unemployment shouldn’t forget that underrepresented groups and others who already face greater challenges to finding a job are also continuing to feel the pressure of an unequal recovery.”

This latest report is part of a series prepared over the past two years to provide more and better data about youth unemployment and the impacts of the COVID-19 pandemic on young people in the workforce. To further bring these numbers to life, Mathematica created a powerful data dashboard to put these numbers in context and highlight the impacts and inequities during the recovery. Having the ability to see, digest, and interpret the data can guide resources to enable equitable economic recovery.

“Employment provides youth essential opportunities to learn new job skills and expand their networks. Prolonged periods of unemployment can lead to long-lasting adverse outcomes, including lower earnings and increased risk of unemployment later in life. While it is encouraging that the youth unemployment rate is declining nationally, it is important to remember that the impact of the pandemic and the subsequent recovery has been felt unequally across race, gender, and geography,” added Tyra A. Mariani, president of the Schultz Family Foundation, which helped underwrite Mathematica’s research as a part of the Foundation’s focus on improving economic mobility for young adults.