Expert Commentary

Lost economic value of unemployed or underemployed youth

2012 study on the financial implications of an underutilized youth population.


Low-level jobs are often seen as a natural first step in a young person’s working life, but limited employment options can have negative long-term consequences for both the individual and society.

A 2012 report from the Corporation for National and Community Service and the White House Council for Community Solutions, “The Economic Value of Opportunity Youth,” identifies 6.7 million “opportunity youth” ages 16 to 24 not enrolled in school and chronically unemployed or underemployed. The researchers, based at Columbia University and CUNY-Queens College, used government data to estimate the fiscal and social burdens associated with this youth population.

Key study findings include:

  • Opportunity youth tend to work sporadically at low-paying jobs, annually earning $4,100 and paying $750 in taxes. By contrast, their peers earn $13,900 and pay $2,430 in taxes yearly.
  • Such young people are more likely to be without health insurance or chronically disabled. Medicaid covers an estimated 28% of these youth; the cost of their coverage is approximately $16 billion.
  • Annually, an opportunity youth receives at least $360 more in housing assistance, food stamps and Women, Infants and Children Program support than a peer. He or she also benefits disproportionately from federal programs such as jobs assistance and funding for homeless shelters.
  • Although they make up 17.3% of 16- to 24-year-olds, opportunity youth account for 63% of all crimes committed by this age group. Researchers estimate that such crime costs taxpayers $188 billion annually.
  • While opportunity youth “save” because they don’t have to pay school-related costs — and the government benefits because it doesn’t have to subsidize their studies — such short-term savings result in lower long-term earnings.
  • Blacks comprise only 15% of America’s youth population but make up 32% of opportunity youth; Hispanics constitute 18% of the youth population but make up 22% of opportunity youth.
  • The full lifetime economic burden of opportunity youth in 2011 totals $4.7 trillion. “These numbers show how much is being squandered by failing to adequately invest in future generations,” the researchers state.

“Clearly, the biggest loss in potential occurs in the future lifetimes of opportunity youth, not in the immediate years of youth,” the study concludes. “By not fully participating in the labor market or accumulating human capital, opportunity youth are severely jeopardizing their economic futures.” The researchers’ recommendations for addressing this issue include upgrading secondary education institutions and providing affordable and accessible training opportunities beyond high school.

Tags: youth, poverty, African-American, Hispanic, Latino, crime

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