From Disconnection to Opportunity: Youth Labor Force Engagement in North Carolina

Early adulthood represents a formative period in one’s life when educational and employment opportunities establish a foundation for future economic success. For some youth, however, detachment from these key experiences can have long-lasting consequences. These divergent pathways underscore the importance of analyzing youth connection trends and fostering engagement during this critical juncture in life.

Author: Jonathan Guarine

For disengaged youth, disconnection from both school and the workforce can be damaging to future outcomes. Economic downturns have historically worsened youth disconnection. However, using Current Population Survey (CPS) data, we find the post-pandemic recovery has differed from the past two recessions for younger individuals. In 2020, the share of disconnected youth reached 12.7% in North Carolina, primarily among older youth (20-24). By 2021, the statewide disconnection rate decreased to 12.4%. Unlike previous downturns, full-time school enrollment slowed down during the pandemic, but an extremely tight labor market has provided more youth employment opportunities. 

Although youth labor force participation has been on a downward trajectory since the early 2000s—both nationally and in North Carolina—youth who are neither enrolled in school nor participating in the labor force have garnered increased attention over the past decade. Referred to as “disconnected youth” (also known as “opportunity youth1), these individuals between the ages of 16 and 24 have difficulty acquiring the skills and experience needed to attain self-sufficiency. Historically, youth disconnection and other measures of work-school involvement have been responsive to business cycle fluctuations, making it valuable to examine changes during the COVID-19 pandemic compared to past recessions.

Based on CPS data, North Carolina’s youth disconnection rate—measured as the share of the 16-24 population out of the labor force and school— moderately rose over the past two decades. In 2000, the share of disconnected youth stood at 9.3% and by 2021, the rate reached 12.4% (see Figure 1). Since the turn of the century, the state’s disconnection rate has averaged 11.5%, or about one in every nine young people.

Economic downturns can disproportionately impact younger populations, worsening youth disconnection. Following the 2001 recession and the 2007-09 “Great Recession,” North Carolina’s disconnection rates peaked at 13.3% and 13.5%, respectively (see Figure 1). As COVID-19 upended the economy in 2020, youth disconnection rates rapidly rose to 12.7%, attesting to the dual challenge of disrupted schooling and deteriorating job prospects. Unlike the past two recessions, the statewide disconnection rate swiftly moved downward by 2021— not a surprise considering the relatively short duration of the pandemic-induced recession.

Figure 1

Youth Disconnection graph

Because teenagers and young adults exhibit significant variation in their life stages, it is worth investigating the differences between these two groups. For younger youth (ages 16-19), a higher share are only enrolled in school and, between 2000 and 2021, the share increased by 11.8 percentage points (see Figure 2). The share of young people who were simultaneously in school and the labor force decreased over the past two decades, alongside those who were only in the labor force. From 2000 to 2021, the share of disconnected youth grew slightly by 2.6 percentage points.

Figure 2

Youth 16-19 school enrollment

For older youth (20-24), who are approaching prime working age, the share of those only in the labor force contracted 12.4 percentage points between 2000 and 2021, while the share only in school increased by 9.6 percentage points (see Figure 3). Those who were both in school and the labor force declined by 0.3 percentage points. The share of disconnected youth grew by 3.1 percentage points during this period; however, the rise in full-time school enrollment has outpaced disconnection rates since the Great Recession. These findings extend past LEAD research indicating a larger increase in school-enrolled youth relative to disconnected youth.

Notably, as both Figures 2 and 3 detail, youth responses to the COVID-19 pandemic have appeared different from the past two recessions. Previously, recessions prompted declines in youth labor force involvement and increases in school enrollment2—as economic reasoning would suggest when weakening labor demand reduces the opportunity cost of staying out of the labor market to pursue an education. In contrast, from 2020 to 2021, the share of youth in school declined while the share in the labor force rose. Youth disconnection appears mixed, with the rate falling for the younger segment but increasing for the older group after 2020.

These movements speak to the uniqueness of the COVID-19 recession and the subsequently fast recovery. The uptick in labor force engagement might be suggestive of a tight labor market, which provides youth with more employment opportunities and higher wages when businesses struggle to hire workers. At the same time, COVID-related interruptions to in-person schooling have hindered enrollment across K-12 and postsecondary environments.

Figure 3

youth enrollment increase graphA few conclusions emerge from these trends. Youth experiences following the COVID-19 pandemic have differed from the past two recessions. Youth disconnection tends to worsen during recessionary periods and peak in subsequent years, but statewide disconnection rates have already come down in 2021. Nevertheless, statewide levels of youth disconnection are nontrivial and can pose a significant risk over time if left unaddressed.

Disconnection remains higher among the older segment (20-24) of the youth population compared to younger individuals (16-19). One plausible explanation might be these older youth do not face the same compulsory education requirements as their younger counterparts. Regardless of the exact reason, this finding suggests the time following high school may be an especially vulnerable time for some youth.

The gap between full-time enrolled and disconnected youth has grown throughout the past two decades. The surging school enrollment reflects the economic and social benefits youth derive from additional education. However, the aftermath of the COVID-19 recession has the potential to disrupt this long-term trend with full-time school enrollment showing signs of slowing down and even declining (see Figures 2 and 3).

Despite ongoing challenges for the education system, an extremely tight labor market may serve as a bulwark against rising youth disconnection and may even be strong enough to draw disengaged youth back into the workforce. Given the intense labor demand among industries that have historically employed younger workers (e.g., Leisure and Hospitality and Retail Trade), youth stand to benefit, at least in the immediate term

Indeed, a cursory glance at the data suggests that even though North Carolina youth faced a steeper decline in labor force participation between 2019 and 2020 relative to other age groups, the participation rate quickly rebounded and exceeded pre-pandemic levels by 2021 (see Figure 4). By contrast, participation rates for the prime-age (25-54 years old) and mature (55+) populations have been slower to recover and still hold below their 2019 levels.

Figure 4

youth labor force participation graph

Youth disconnection is a complex issue that stretches beyond just shifting macroeconomic conditions, involving other factors such as parental education, family income, and neighborhood effects. Although the post-COVID data are still early, it will be important to continue monitoring youth disconnection trends over time as more data become available.

For youth, active engagement in school and the labor force provides a critical foundation for positive workforce outcomes, and efforts to support disconnected youth remain an ongoing focus among organizations serving that population. Collaborative initiatives include the University of North Carolina’s Carolina Across 100 Initiative, myFutureNC’s Opportunity Youth Network, and the North Carolina Community College System’s ApprenticeshipNC program. Additionally, more information about North Carolina’s NCWorks NextGen Programs can be found here.

1Some studies define “disconnected youth” as those who are neither in school nor employed. To have a more comprehensive view, this article defines “disconnected youth” as those who are neither in school nor in the labor force.

2On Figures 2 and 3, observe the green lines (“Only in School”), which tend to rise during and after the first two recessions. Also note the purple lines (“Only in Labor Force”), which tend to fall during and after the first two recessions. In contrast, these lines move in opposite directions following the COVID-19 pandemic.

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