High Teenage Unemployment:The Role of Atypical Labour Supply Behaviour*

The very high levels of teenage unemployment experienced in Australia since 1974 have largely been thought to be he to the diyerential impact of employment demand on the youth labour market. In this paper we show that during the recession teenage employment has been favoured relative to the employment trend of the past and that the large increases in teenage unemployment have largely arisen from the marked change in the labour force participation rate. The paper goes on to examine factors which seem to have been important in generating the changed supply response —changes in school participation rates, the increased importance of part‐time work, increases in unemployment benefits, the permissible income levels for unemployment benefit recipients, changes in wage levels and the important interactions between these various factors.