How did young people fare in the 1990s economic downturn?

As new entrants to the labour market, young people generally fare less well in economic downturns. They experience much sharper rises in unemployment rates and, relative to more experienced older workers, slightly longer periods of recovery. With this increased risk of being unemployed and of potentially lower earnings, young people face decisions about whether to seek employment or to undertake additional education and training. To provide insights into how young people may fare in the current economic downturn, this study examines the experience of young people between 16-26 years of age in a previous downturn. Specifically, the study seeks to tease out the effects of the major economic downturn of 1990-91 on young people's employment and their participation in education. The dataset used for the analysis in this paper consists of eight waves of the Australian Youth Survey (AYS) 1989-96 - the predecessor to the Longitudinal Surveys of Australian Youth (LSAY) - which covers the previous economic cycle and therefore includes the downturn of 1990-91. It is rare in Australia to have this span of longitudinal data for examining long-term trends and the effects of cyclical events such as recessions.