The nation's low unemployment rate continues to wow economists and policy wonks. In March, 65 percent of metropolitan areas recorded rates below the U.S. average of 4.4 percent. But has everyone benefited from the '90s expansion? Economics professors Richard Freeman of Harvard University and William Rodgers III of the College of William and Mary have been studying the labor market outcomes for non-college-educated young men during the 1990s. Their question: Has the good economy trickled down to these youths, or passed them by? The target group for their study was 16-to-24-year-old men, either high school dropouts or graduates who were not currently in school.
Freeman and Rodgers focused their research-published in April in a working paper for the National Bureau of Economic Research-on three types of metropolitan areas: those with "continuous full employment" (unemployment rates below 4 percent throughout 1992 to 1998); those with "steady high unemployment" (rates greater than 7 percent throughout); and those with "rapid reductions in joblessness" (more than a 5 percent decline in the unemployment rate from 1992 to 1998). Almost half of the 15 areas with rapid drops in unemployment were in Massachusetts.
The news is good. Across the three types of metro areas examined, young men posted increases in employment from 1992 to 1998. In places where the jobless rate stayed below 4 percent, employment among young men jumped to 89 percent from 74 percent. African American youths did even better in those areas-their employment rate reached 91 percent in 1998, a 39 percent increase from 1992. In fact, Freeman and Rodgers found that by 1998, the employment rate of young, less-educated men exceeded that of their older male counterparts in places where the jobless rate was under 4 percent. Wages tell a similar story. Earnings of adult men barely increased in areas where the unemployment rate stayed low, but the earnings of youths dramatically improved.
Freeman and Rodgers also found that young men made less "real gains" in metro areas that started the boom with higher jobless rates, perhaps because they were recovering ground lost during the late-'80s recession. "The health of the local economy at the end of the recession played a distinct role in individual successes," Rodgers says. "If you lived in a city with a really bad recession, the gains seemed to be lower."