Participation Rate
Author: Makayla Fischer
Publication Date: April, 2024.
Bucking a national trend, a large and rising share of Utah teens participate in the labor force. During the summer months of June, July, and August 2023, 64% of Utah teens aged 16 to19 were employed or looking for work, compared to 45% for the US as a whole. While the teen labor force participation rate (LFPR) in Utah is lower than it was in the 1990s, the decline is much more significant outside of Utah.
The high teen LFPR in Utah may be a positive economic indicator for the state. Areas with a higher teen LFPR also have higher levels of upward economic mobility (Chetty et al. 2014). Indeed, Utah scores well in terms of upward mobility relative to other states, and the high number of Utah teens participating in the labor force may contribute to this. There are many reasons that teens may choose to work, including earning income, gaining work experience, or having an activity to fill time outside of school or during summer months. In addition to these short-term benefits, teen employment appears to also have substantial long-term benefits. Early labor market experience and living in an area where summer jobs are the social norm tend to predict future economic success; children who have experience with summer jobs or where their peers have such jobs are more likely to rise up the income ladder than others. While the mechanisms behind this relationship are unclear, the long-term decline in teen employment has raised concerns about whether this portends a decline in economic mobility.
Figure 1 shows the trend in the LFPR in the United States and Utah measured in the Census’ monthly Current Population Survey. In 1990, 63% of teens participated in the labor force nationwide and this number fell by 20 percentage points to just 43% in 2023. In comparison, the Utah teen LFPR was at 78% in 1990 and has decreased by 12 percentage points to 66%. Despite both Utah and the national average falling similarly over this timeframe, in 2023 Utah’s rate was 23 percentage points higher than the rest of the nation.
In the summer of 2023, Utah had the 8th highest teen LFPR (Figure 2). Even when controlling for other characteristics that may make Utah different from other states such as race, age, family income, parental education, and family size, Utah’s high ranking remains.
At a national level, the teen LFPR is related to family characteristics. Figures 3, 4, and 5 demonstrate that the teen summer LFPR is higher in wealthier families, in families with more educated parents, and in families with fewer children. Notably, LFPR data does not capture informal or household work, which may explain the lower LFPR for teens in households with more children. These teens may be acting as caregivers to siblings rather than participating in the labor force. However, this also means that Utah’s relatively larger family sizes aren’t the cause of its higher LFPR.
The broader implications of the national decline in teen LFPR are unclear. When asked in surveys why they are not in the labor force, a rising share of teens report that it’s because they are enrolled in school. In July 2023, for example, 47% percent of teens reported being enrolled and, among those respondents, only 34% had a job. If those teens are, in fact, pursuing additional educational opportunities, that might represent a valuable investment in their future economic prospects. It’s not clear, however, that they were literally enrolled in class that month (which seems improbable given rates of summer school enrollment reported by the Department of Education) or, instead, that their answer reflects a new social norm in which students don’t pursue summer jobs.
Interestingly, most of the decline in the teen LFPR arises because a rising share of teens report that they are full time students—even in the summer months, as shown in shown in Figure 6. The graph shows that the teen LFPR remains relatively high among students who report they are not enrolled or enrolled part time. However, the LFPR has declined from about 45% to 30% among teens who report they are full time students. But the share of teens who report they are full time students during the summer months has increased from about 20% to 55% between the early 1990s and today.
In reality, it seems few teens are enrolled in school during summer months. While data on summer enrollment outside of the Current Population Survey is scarce, data from the Department of Education and the American Time Use Survey suggest few teens are actually in school in July. Instead, the enrollment trends illustrated in Figure 6 are probably an artifact of changes in the attitudes or responses of teens. We suspect that these data instead suggest that a rising share of teens are spending their summers neither working nor actively engaged in educational learning—which may not bode well for their future employment prospects.
Given the positive relationship between the teen LFPR and upward economic mobility, reduced teen attachment to the labor force on a national level and in Utah is cause for concern. Although Utah has also experienced a large decline in the LFPR of teens, a larger share of Utah teens work during the summer than many other states, which may pay future dividends of improved economic outcomes.