The Relative Pay and Employment of Young People

Abstract

This chapter is a summary of research which is set out more fully in Wells (1983). It examines how the earnings of young people have moved relative to those of adults over the post-war period. The reasons for these movements are then considered, and it was found that the relative wages of young people do not appear to adjust rapidly in response to changes in the level of their demand or supply. Rather, it appears that most of the movements that occur can be attributed to ‘institutional’ or non-economic factors such as the effect of the lowering of the age of majority in 1969 on the reduction in the age at which adult rates of pay are paid. In such a situation movements in the young person-adult relativity cannot be regarded as an equilibrating force to balance supply and demand for young people and, thus, there exists the possibility of shortage or surplus in the labour market for young people.