Labor Market Advancement for Young Men: How It Differs by Educational Attainment and Race/Ethnicity During the Initial Transition to Work

Abstract

Using data from the 1990 U.S. Census and the 2006–2007 American Community Survey (ACS) and a synthetic cohort method, this article examines the labor market performance of young men during their initial transition to work and how it differs by educational attainment and race. The article looks at young men between the ages of 16 to 26 in 1990 who were no longer enrolled in school and men between the ages of 32–33 and 42–43 in the 2006–2007 period. Strong patterns in the results confirm conventional wisdom that economic and labor market outcomes are superior with increased levels of educational attainment. However, outcomes were more dramatic for those with college degrees than others (relative to those who dropped out of high school), confirming the disproportionate value of obtaining a college degree. Graduating from high school, going to community college, or receiving an associate's degree also improved outcomes. The data revealed that not acquiring a high school degree, especially for domestic-born racial minorities, generates very poor labor market outcomes during the initial transition to work. Racial inequality in labor market and economic outcomes widened as educational attainment levels increased. These results strongly suggest that efforts to boost academic achievement and educational attainment of racial/ethnic minority men, although they may improve labor market and economic performance, will probably not narrow racial inequalities in outcomes. Programs and policies should target factors that limit the potential gains in the labor market from educational attainment for these men.

Notes

¹For the selected sample of men from the 2006–2007 ACS, the equivalent distribution across educational attainment categories were 16, 36, 20, 8, and 21, respectively. A chi-square test indicated that these distributions are only marginally statistically dependent (at the 20th percentile level), indicating some support for the strong assumption that no men reenrolled in school over the study period. Of course, these data noted that a few men did reenroll in school over this period, indicating some contamination of the results and analysis. However, the reenrollment rates were not large; thus, these results can be interpreted as upper-bound differences in outcomes across educational attainment categories over the study period. Of course, contamination could also occur through other channels such as through participation in non-degree-based employment and training programs over the study period. However, with the data used here, there is no way to control or eliminate all potential sources of contamination.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

²The wage and income data are adjusted for inflation using the Consumer Price Index (CPI) and given in 2006–2007 dollars.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

For each outcome and educational attainment group, cells are calculated by (Outcome2007 – Outcome1990).

³The absolute differences in these outcomes are shown rather than the percentage changes (which are provided in a separate table in Appendix A) because differences in the levels of the indicators across both time periods, as well as across the educational attainment levels, contribute to wide variation in the percentage changes in these outcome variables and thus make interpretation difficult. Absolute changes are easier to interpret because they provide a direct comparison of the magnitudes of difference across time periods.

⁴The gains in percentage terms are provided in Appendix Table A.1; results in these terms were broadly consistently with those shown here in absolute terms.

⁵Though not shown here, these results are confirmed using regression analysis. For each educational attainment group, I regressed the change in income from 1990 to 2006–2007 as a function of the change in wage rates and in hours worked over the study period. The results indicate that, compared to other educational groups, the change in hours worked explained more of the change in income for those with more limited educational, particularly those without a high school degree. The results also demonstrated that, compared to these other groups, the change in wage rates explained more of the change in income for those with more educational attainment, in particular for those with a college degree.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

For each outcome and educational attainment group, cells are calculated by ([OutcomeX2007 – OutcomeHSDO2007] – [OutcomeX1990 – OutcomeHSDO1990]), where x = educational attainment categories except HSDO (high school dropout).

⁶Immigrants' ethnic backgrounds are grouped by their country of origin as determined by responses from the Census.

Note. HS = High School; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

For each outcome, racial/ethnic and educational attainment group, cells are calculated by: ([OutcomeWhite₂₀₀₇ – OutcomeWhite₁₉₉₀] – [OutcomeX₂₀₀₇ – OutcomeX₁₉₉₀]), where outcome = each indicator, and X = the other racial/ethnic groups.

Notes. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science; B = Black; L = Latino; A = Asian; W = White; Li = Latino immigrant; Ai = Asian immigrant; Ei = European immigrant; Sm Coll = some college; HSD = high school degree; HSDO = high school dropout.

For each outcome and educational attainment group, cells are calculated by: ([OutcomeX2007w – OutcomeHSDO2007w) – [OutcomeX1990w – OutcomeHSDO1990w]) – ([OutcomeX2007j – OutcomeHSDO2007j] – [OutcomeX1990j – OutcomeHSDO1990j]) where X = educational attainment categories except HSDO, w = Whites, and j = other racial/ethnic groups.

⁷Stoll (1999) showed that average distance from search areas, as well as not having access to cars is negatively related to the number of areas searched and to the distance searched by workers. Thus, distance from search areas and lack of access to cars imposes high search costs (in both time and money) on workers and limits the extent of geographic job search.

⁸See Simms and Allen (1996) for a discussion of whether job-poor areas that are strategically located, such as poor minority areas near downtown neighborhoods, represent competitive advantages and opportunities for economic development.

⁹Whites received callbacks in 10.06% of cases compared to a callback rate of 6.70% for Blacks. Callback rates were slightly higher for women than men, but overall levels of discrimination differed little by gender.

¹⁰Several studies have analyzed the labor market consequences of involvement in the criminal justice system by testing for direct effects on future employment and earnings of being arrested (Grogger, 1995) or of serving time (Freeman, 1992). These studies tend to show that arrests and imprisonment are both associated with lower employment and earnings, evidence consistent with an effect of incarceration on the general employability of former inmates.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

For each outcome and educational attainment group, cells are calculated by: ([Outcome2007 – Outcome1990]/Outcome1990) × 100.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

For each outcome and educational attainment group, cells are calculated by: ([(OutcomeX2007 – OutcomeHSDO2007)/(OuctomeHSDO2007)] – [(OutcomeX1990 – OutcomeHSDO1990)/(OutcomeHSDO1990)]) × 100, where X = educational attainment categories except HSDO (high school dropout).

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science; B = Black; L = Latino; A = Asian; W = White; Li = Latino immigrant; Ai = Asian immigrant; Ei = European immigrant.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science.

Note. HS = high school; AA = Associate of Arts; BA = Bachelor of Arts; BS = Bachelor of Science; B = Black; L = Latino; A = Asian; W = White; I = immigrant; Li = Latino immigrant; Ai = Asian immigrant; Ei = European immigrant; Sm Coll = Some college; HSD = high school degree; HSDO = high school dropout.