Introduction

A changing labor market is driving questions about how young workers prepare for shifts in the skills demanded of workers, the location of work, and the relationships between employers and employees.¹⁴ As young adults enter the labor market, three significant changes are creating a work environment that is markedly different than the one their parents prepared to enter.

First, the Great Recession exacerbated existing trends of increased unemployment and declines in labor market participation rates among young adults. Since the recovery began in 2009, the unemployment rate has not recovered to pre-recession levels. Higher unemployment rates have affected young adults more than older workers. Between December 2005 and December 2015, unemployment among 18- to 19-year-olds increased 18 percentage points to 15.2 percent, and for 20- to 24-year-olds unemployment increased 1.0 percentage points to 9.4 percent. Yet unemployment for 35- to 44-year-olds increased 0.2 percentage points to 4.0 percent (table 1).¹⁵

Table 1. Labor force statistics from the Current Population Survey (August 2016)

Age	Unemployment rate (percent)	Unemployment rate change (Aug. 2006- Aug. 2016) (percentage points)	Labor force participation (percent)	Labor force participation change (Aug. 2006- Aug. 2016) (percentage points)
18 to 19 years	15.2	+1.8	58.2	-8.9
20 to 24 years	9.4	+1.0	74.4	-3.3
25 to 34 years	5.3	+0.2	82.9	-2.2
35 to 44 years	4.0	+0.2	83.8	-1.2
45 to 54 years	3.6	+0.2	81.4	-1.8
55 years and over	3.2	No change	37.6	-2.2

Source: Bureau of Labor Statistics.

Likewise, while labor market participation rates have decreased overall for those 55 years and older, young adults have experienced the greatest decline. Between December 2005 and December 2015, participation rates among 18- to 19-year-olds dropped 8.9 percentage points to 58.2 percent, and 20- to 24-year olds the rate dropped 3.3 percentage points to 74.4 percent, while the rate for 35- to 44-year-olds dropped 1.2 percentage points to 83.8 percent (table 1).¹⁶

Second, globalization, automation, and improved efficiencies in the workplace are changing how employment and training programs connect workers to jobs, particularly those that require special skills and provide for wage advancement. As employers seek new ways to make the employment relationship more flexible, they have increasingly relied on a variety of arrangements popularly known as alternative work arrangements. Because of this increased use of independent contractors, temporary, seasonal, and leased employees, young workers are increasingly acting as their own agents of employment, rather than as employees of a particular firm. As the relationship between employers and employees shifts, employers may be less likely to provide salaries and traditional benefits to workers.

Third, the United States has experienced "job polarization," a steady decline in well-paid, secure jobs, such as in manufacturing, and an increase in demand for cognitive knowledge, skills, and abilities. This change in the job market has meant a shift from jobs that require no more than a high school diploma to jobs that require at least some postsecondary education. As evidence of this shift, college-educated workers continue to fare significantly better than those without a postsecondary degree in the aftermath of the recession.¹⁷

As a result of economic changes, a large portion of young adults are now "disconnected"--that is, neither enrolled in education nor employed. In 2014, the "disconnection rate" for both young high school graduates and young college graduates was 1.3 times as high as before the recession began. This increase represents an enormous loss of opportunity for work experience or further education and will have a lasting negative impact on their lifetime earnings.¹⁸

Furthermore, since the Great Recession, college graduates continue to be employed at greater rates than high school graduates but at far lower rates than historical norms. Young college graduates typically have a strong labor market attachment, yet the employment-to-population ratio of young college graduates has significantly declined from the average of 89 percent during the 1990s and 87 percent during the 2000s to 85 percent in 2015.¹⁹

In light of these changes, the Board seeks to describe the perceptions and expectations of young Americans in the labor market. Specifically, the Board aims to identify workplace experience and expectations for 18- to 30-year-olds.

In December 2013, the Federal Reserve Board's Division of Consumer and Community Affairs conducted the inaugural Survey of Young Workers. The survey was an initial inquiry into the work experiences and expectations of young workers. In December 2015, the second survey, known as the 2015 Survey of Young Workers, was administered to the same population of young adults nationwide. Unless otherwise noted, the findings in this report represent the 2015 Survey of Young Workers.

The Survey of Young Workers aims to capture a snapshot of the educational attainment, employment experience, and labor market outlook of 18- to 30-year-olds across the United States. The survey also collects information on young adults that is not readily available from other sources or that is not available in combination with other variables of interest. The survey instrument was designed in consultation with Federal Reserve System staff and outside academics with relevant research backgrounds.

The 2015 Survey of Young Workers focuses on a range of topics, including

• outlook for future job opportunities;
• expectations for full-time and long-term work arrangements;
• educational attainment;
• educational objectives;
• profile of current employment; and
• financial self-sufficiency.

About the Survey

The 2015 Survey of Young Workers was designed by Board staff and administered by GfK, an online consumer research company, on behalf of the Federal Reserve. In most cases, original questions are asked of respondents, although occasionally questions mirror those from other surveys in order to provide direct comparisons and understand how certain variables interact with others. In the 2015 survey, many of the questions from the 2013 survey are repeated to enable longitudinal tracking, while new questions are introduced as well.

The survey was conducted using a sample of adults between the ages 18 to 30 from the KnowledgePanel®, a proprietary, probability-based web panel of more than 50,000 individuals from randomly sampled households; the sample was designed to be representative of the U.S. population. As shown in table 1, e-mails were sent to 1,139 respondents from the 2013 Survey of Young Workers who remained part of the KnowledgePanel® and between the ages of 18 and 30. A total of 815 respondents from the 2013 Survey of Young Workers responded to the 2015 survey, representing 72 percent of those contacted. In addition, e-mails were sent to 2,996 "fresh" individuals, yielding 1,120 complete surveys, a 37 percent respondent rate.²⁰

In total, 4,135 potential respondents were contacted for the 2015 Survey of Young Workers, resulting in 2,035 completed surveys. The total response rate for the 2015 survey was 49 percent. The median time to complete the survey was approximately 15 minutes (table 2).

Table 2. Key survey response statistics

Sample type	Number sampled	Qualified completes	Completion rate (percent)
2013 re-interviews	1,139	815	72
Fresh cases	2,996	1,120	37
Overall	4,135	2,035	49

Recognizing that the sample demographics may differ from that of the overall U.S. population, survey results are weighted based on the demographic characteristics of the respondents to match characteristics from the 2015 March Current Population Survey (CPS). Further details on the survey methodology are included in appendix A.

As is the case with all surveys, some caution in interpreting the survey results is prudent. Although the survey was designed to be nationally representative, some degree of selection bias beyond that which can be corrected through weighting is possible nonetheless (see appendix A). Further, the results are all self-reported, and respondents' knowledge and memory may not always be completely accurate when answering survey questions.

The following sections of this report summarize key findings from the Survey of Young Workers. Unless otherwise noted, the numbers cited in this report are derived from the survey and are weighted to yield estimates for the U.S. adult population between ages 18 and 30 years old. Each section also concludes with findings from research related to the subject matter. Only a subset of questions in the survey are discussed in the report; however, the complete survey questionnaire is summarized in appendix B. The responses to all the survey questions are presented in appendix C in the order that the questions were asked of respondents.

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Profile of Respondents

Age

The 2015 Survey of Young Workers represents a nationwide sample of 18- to 30-year-olds. The distribution is slightly younger than the 2013 sample due to a small increase in 22- to 26-year-olds and a small decrease in 27- to 30-year-olds (table 3).

Table 3. Age of respondents
Percent, except as noted

Age	2013	2015
18-21 years old	28	28
22-26 years old	38	41
27-30 years old	33	31
Number of responses	2,097	2,035

Note: Here and in subsequent figures and tables, percentages may not sum to 100 because of rounding and question nonresponse.

Note: In this table and in subsequent figures and tables, the number of responses reported is not weighted.

Race/Ethnicity

In the survey, 56 percent of the respondents are white (non-Hispanic), 21 percent are Hispanic, 14 percent are black (non-Hispanic), 7 percent are another race (non-Hispanic), and 2 percent represent two or more races (non-Hispanic).

Geography

Eighty-seven percent of the survey respondents represent metropolitan areas, and 13 percent represent non-metropolitan areas.

Education

The survey sample is weighted to reflect the educational attainment of 18- to 30-year-olds nationwide. As such, 9 percent of the respondents have less than a high school education, 24 percent have a high school diploma or equivalent GED, 29 percent have some college education (but no degree or certificate to date), 4 percent have a certificate or technical degree, 10 percent have an associate's degree, 25 percent have bachelor's degree or higher (table 4).

Table 4. What is the highest level of formal education you have completed?
Percent, except as noted

Education level	2013	2015
Less than high school	10	9
High school diploma or equivalent GED	29	24
Some college, no degree or certification (including currently enrolled)	30	29
Certificate or technical degree	*	4
Associate degree	9	10
Bachelor's degree	17	18
Master's degree	4	5
Professional or doctorate degree	1	1
Number of responses	2,097	2,035

Note: "Certificate or technical degree" not asked in 2013.

In the survey, "business/management" is the most popular field of study for all respondents with postsecondary experience (15 percent) as well as respondents with a bachelor's degree or higher (20 percent). "Health" was the second most popular field of study for respondents with at postsecondary experience (14 percent) while "engineering" was second most popular field for those with a bachelor's degree or higher (14 percent) (table 5).

Table 5. Which one of the following broad categories best describes your most recent educational program?
Percent, except as noted

Education program	2015 respondents with postsecondary experience	2015 respondents with bachelor's degree or higher
Business/management	15	20
Health	14	10
Engineering	9	14
Social/behavioral sciences	9	10
Computer/information sciences	7	6
Education	6	9
Humanities	5	7
Physical sciences/math	5	5
Vocational/technical training	5	<1
Life sciences	4	5
Law	4	4
Other	11	9
Number of responses	1,527	751

Students

Among the respondents, there was a decrease in the proportion of students currently enrolled in an education or training program from 2013 (32 percent) to 2015 (28 percent). Throughout this report, all of these respondents are referred to as "students" regardless of their employment status.

Employment

Respondents showed an increase in current paid employment from 60 percent in 2013 to 69 percent 2015.

Employees

Among respondents, many young adults are both students and paid employees. Furthermore, student life and work life are no longer separate or sequential for many young adults. So, although the report considers all respondents currently enrolled in school as students for the purposes of analysis, the report attempts to identify those who have "launched" their work life as "employees." As a result, throughout this report, Employee is used to describe respondents who are currently working as paid employees and are not currently enrolled in school full time (table 6).

Table 6. Currently working as a paid employee
Percent, except as noted

Response	2013	2015
Currently enrolled in an education or training program, full time	22	17
Not currently enrolled in an education or training program OR enrolled, part time ("employee")	78	83
Number of responses	1,386	1,468

Unemployment

The survey also showed a decrease in respondents who are not working as a paid employee but report they are currently seeking a paid job ("unemployed") from 2013 (19 percent) to 2015 (14 percent) (table 7). The most frequently cited reasons that 2015 respondents are not working and not looking for work are that they are students (45 percent), they don't need to work (45 percent), and they are homemakers/taking care of family (32 percent). Furthermore, 16 percent of these respondents are self-employed.

Table 7. Are you currently looking for a paid job?
Percent, except as noted

Response	2013	2015
Yes	19	14
No	21	17
Currently working as a paid employee (not asked)	60	69
Number of responses	2,097	2,035

Note: Asked of respondents not currently working as a paid employee.

Earning and Learning

The majority of respondents (51 percent) are working as paid employees and not enrolled school. Younger respondents, 18- to 24-year-olds, are less likely to be working with no enrollment (39 percent) and older respondents, 25- to 30-year-olds, are more likely to be working with no enrollment (64 percent) (tables 8-10).

Eighteen percent of the respondents are students and paid employees. Younger respondents are more likely to be "earning and learning" (26 percent), and older employees are much less likely to be "earning and learning" (9 percent). Sixteen percent of younger respondents are attending school with no paid employment, while only 3 percent of older respondents are attending school and not working (tables 8-10).

Table 8. Are you currently working as a paid employee?
Percent

Response	Paid employee	Not paid employee	Total
Enrolled in an education or training program	18	10	28
Not enrolled in an education or training program	51	21	72
Total	69	31	100

Note: Number of responses is 2,035.

Table 9. Are you currently working as a paid employee? (ages 18- to 24-years-old)
Percent

Response	Paid employee	Not paid employee	Total
Enrolled in an education or training program	26	16	42
Not enrolled in an education or training program	38	19	58
Total	64	36	100

Note: Number of responses is 776.

Twenty-one percent of the respondents are neither attending school nor working as a paid employee. Nineteen percent of younger respondents and 23 percent of older respondents are neither working nor in school (tables 8-10).

Table 10. Are you currently working as a paid employee? (ages 25- to 30-years-old)
Percent

Response	Paid employee	Not paid employee	Total
Enrolled in an education or training program	9	3	12
Not enrolled in an education or training program	64	23	88
Total	74	26	100

Note: Number of responses is 1,259.

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References

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