RECONNECTING OPPORTUNITY YOUTH

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1 RECONNECTING OPPORTUNITY YOUTH Data Reference Guide March 2015 Patrick Sims

2 Opportunity Youth Opportunity youth are young adults aged years who are neither connected to school nor work. These young adults are described as opportunity youth because of the potential value they could add to their communities if they reconnect to education and employment opportunities. The Cowen Institute published its first data guide on opportunity youth in 2012 to provide policymakers, practitioners, and the general public with data on this unique population. This guide is a comprehensive examination of opportunity youth at the national, state, and metropolitan levels from a cost and demographic perspective. Nationally, an estimated 13.8 percent of year olds are disconnected from both school and work, which is down from 14.7 percent in % 1 United States Percentage of Year Olds Who Are Opportunity Youth, % Louisiana 18.2% 2 New Orleans Compared to the average year old, opportunity youth generally have less formal education, are less likely to have health insurance, less likely to have been recently employed, more likely to have children, and more likely to have a disability. African-Americans, Hispanics, and young men are 5% Asian-American 4% Other also more likely to become opportunity youth than Whites, Asian-Americans, and young women. However, nationally, there are more White 20.4% opportunity youth 56.1% than any other race or ethnicity. Latino White 14.6%! Young people tend to disconnect African-! after high school age. While 13.8 percent of all American year olds are disconnected, that rate increases to 17.9 percent when only year olds are considered (compared to 5.3 percent for year olds) Opportunity Youth by Race/Ethnicity in the U.S. 3% Asian- American 25% Hispanic 23% African- American 5% Other 45% White 2 The Cowen Institute Reconnecting Opportunity Youth: Data Reference Guide

3 Male Female 48.7% 47.5% Male Who are the nation s 5,526,942 opportunity youth? Female 51.3% Opportunity Youth 52.5% is the average is the average age age 28.5% 28.5% have dropped have dropped out of out high of high school 23.7% 23.7% have some have some college college education 14.6% 14.6% have a have disability a disability 33.4% 33.4% have worked have worked in the in past the past year year 30.0% XX% of women of women have have children children 60.9% 60.9% have health have health insurance All Year Olds is the is the average average age age 6.8% 6.8% have dropped dropped out of out high of school high school 44.3% 44.3% have some some college college education education 5.9% 5.9% have have a disabilitya disability 62.1% 62.1% have have worked worked in the in past the year past year XX% 11.3% of of women women have have children children 78.9% 78.9% have have health health insurance insurance Rate of Opportunity Youth by Race/Ethnicity in the U.S. 48.7% 47.5% Male Male Female Female 51.3% 52.5% White 11.3% African-American 21.6% Asian-American 7.9% Hispanic 16.3% Other 15.3% The rate of all year olds of that race/ethnicity that are opportunity youth. March

4 Opportunity Youth in U.S. States While youth disconnection is present across the country, there are regional differences in the extent of disconnection. On average, Southern states have the highest disconnection rates, followed by Western states. Northeast states have the third highest rates, while Midwest states have the lowest. The variation among states is also quite high. The opportunity youth rate in the state with the highest estimated rate (Louisiana) is about 2.5 times as high as the state with the lowest estimated rate (Nebraska) Rate of Opportunity Youth by Region The states with the highest estimated rates of youth disconnection are Louisiana, West Virginia, and Mississippi. Opportunity youth rates tend to be higher in states with poor education outcomes and high poverty rates. Indeed, 2013 state-level opportunity youth rates typically increase when both reading and mathematics eighth grade National Assessment of Educational Progress (NAEP) scores decrease. 3 Poverty rates are even more strongly associated with opportunity youth. 4 West 14.1% Midwest 11.8% South 15.5% Northeast 12.5% Louisiana has consistently struggled relative to other states with poverty and education, which likely contributes to its high rate of opportunity youth. Research from Opportunity Nation, a national initiative focused on the expansion of economic mobility, ranked Louisiana 46th in the country for opportunity based on economic, education, and community factors. 4 The Cowen Institute Reconnecting Opportunity Youth: Data Reference Guide

5 2013 Rate of Opportunity Youth by State Blue = Lower than U.S. Average 0% Grey = U.S. Average Red = Higher than U.S. Average 20% How to read the chart on the right: The blue boxes represent the margin of error. The point where the two boxes meet is the midpoint of this range, which is also the rate that is listed. CI Lower Bound CI Upper Bound Midpoint Louisiana 19.8% West Virginia 19.4% Mississippi 18.5% Nevada 18.5% District of Columbia 18.3% Alabama 17.9% Arizona 17.3% New Mexico 16.9% Tennessee 16.6% Arkansas 16.6% Georgia 16.5% Oklahoma 15.9% Delaware 15.4% Florida 15.3% South Carolina 15.2% Kentucky 15.2% Idaho 14.9% Texas 14.9% Oregon 14.8% North Carolina 14.7% Alaska 14.2% Washington 14.1% New York 13.8% California 13.8% Michigan 13.7% Indiana 13.4% Pennsylvania 13.3% Missouri 12.9% Montana 12.9% Illinois 12.9% Virginia 12.5% Rhode Island 12.4% Ohio 12.3% New Jersey 12.1% Maryland 11.8% Wyoming 11.8% Colorado 11.5% Hawaii 11.5% Utah 11.2% Connecticut 10.6% New Hampshire 10.1% Maine 9.8% Massachusetts 9.8% Wisconsin 9.8% Kansas 9.4% South Dakota 9.4% Vermont Minnesota 8.9% 8.9% Iowa 8.8% North Dakota 7.9% Nebraska 7.6% March

6 Opportunity Youth in U.S. Cities There is significant variation among the 50 largest metropolitan statistical areas (MSAs) in the country. 5 In the MSA with the highest estimated rate of opportunity youth (Memphis), more than one in five young people are disconnected. In contrast, fewer than one in ten young people are disconnected in the MSA with the lowest estimated rate (Boston). The New Orleans metro area has the third highest estimated disconnection rate. Among the 50 largest MSAs, there is little relationship between population size and opportunity youth. Cities of all sizes experience youth disconnection. This is also not a phenomenon that exists only in cities and their surrounding areas. There is no statistically significant difference between the national opportunity youth rate in MSAs and in areas not located in MSAs. Lowest 9 of year olds are disconnected in BOSTON Average 14 of year olds are disconnected in the USA New Orleans 18 of year olds are disconnected in NEW ORLEANS Highest 22 of year olds are disconnected in MEMPHIS 6 The Cowen Institute Reconnecting Opportunity Youth: Data Reference Guide

7 2013 Rate of Opportunity Youth in the 50 Largest Metropolitan Statistical Areas Blue = Lower than U.S. Average 0% Grey = U.S. Average CI Lower Bound CI Upper Bound Midpoint CI Lower Bound CI Upper Bound Midpoint Louisiana 19.8% Memphis West Virginia 19.4% Mississippi 18.5% Nevada 18.5% District of Columbia 18.3% Alabama 17.9% Arizona New Mexico Tennessee Arkansas Georgia Oklahoma Delaware Florida South Carolina Kentucky Idaho Texas Oregon North Carolina Alaska Washington New York California Michigan Indiana Pennsylvania Missouri Montana Illinois Virginia Rhode Island Ohio New Jersey Maryland Wyoming Colorado Hawaii Utah Connecticut New Hampshire Maine Massachusetts Wisconsin Kansas South Dakota Vermont Minnesota 16.6% 16.5% 15.9% 15.4% 15.3% 15.2% 15.2% 14.9% 14.9% 14.8% 14.7% 14.2% 14.1% 13.8% 13.8% 13.7% 13.4% 13.3% 12.9% 12.9% 12.9% 12.5% 12.4% 12.3% 12.1% 11.8% 11.8% 11.5% 11.5% 11.2% 10.6% 10.1% 9.8% 9.8% 9.8% 9.4% 9.4% 8.9% 8.9% Iowa 8.8% North Dakota 7.9% Nebraska 7.6% Red = 17.3% Higher than 16.9% U.S. 16.6% Average How to read the chart on the right: The blue boxes represent the margin of error. The point where the two boxes meet is the midpoint of this range, which is also the rate that is listed. 20% Las Vegas New Orleans Riverside Phoenix Jacksonville Birmingham Portland Indianapolis Richmond Miami Atlanta Tampa Sacramento Detroit Oklahoma City San Antonio Charlotte Philadelphia Houston Louisville St. Louis Cleveland Orlando Dallas New York Virginia Beach Cincinnati Nashville Los Angeles Chicago Denver Washington Providence Seattle Kansas City Salt Lake City San Diego Buffalo Austin Baltimore Hartford Columbus San Jose Milwaukee San Francisco Raleigh Pittsburgh Minneapolis 9.1% Boston 8.6% 21.6% 19.6% 18.2% 17.5% 17.3% 16.9% 16.8% 16.1% 15.8% 15.4% 15.1% 14.9% 14.8% 14.8% 14.8% 14.6% 14.4% 14.4% 14.3% 14.2% 14.0% 13.9% 13.6% 13.6% 13.6% 13.5% 13.2% 12.8% 12.8% 12.7% 12.5% 12.5% 12.4% 12.4% 12.4% 12.3% 12.2% 12.1% 12.0% 11.5% 11.3% 11.1% 11.0% 10.7% 10.7% 10.4% 10.3% 10.2% March

8 What Are the Costs to Society? Failing to reconnect opportunity youth leads to significant taxpayer and social costs as well as lower long-term economic growth. These high costs make intervention cost-effective. Direct costs to taxpayers from opportunity youth include increased government spending on crime, health care, and welfare. Helping young people reconnect to school and work can result in significant taxpayer savings. Each opportunity youth costs taxpayers roughly $13,900 each year and an average total cost of $64,940 between the ages of 16 and 24 while disconnected. 6 Fiscal Costs to Taxpayers per Opportunity Youth $250,000 $200,000 $150,000 Annual Lifetime $170,704 $235,680 $77 billion United States Annual Fiscal Cost to Taxpayers $1.7 billion Louisiana $360 million New Orleans The costs accumulate each year that an opportunity youth remains disconnected with an estimated lifetime cost of $235,680 for young people who never reconnect. Given that the New Orleans metro area had an estimated 26,000 opportunity youth in 2013, the annual cost to taxpayers is approximately $360 million. If the percentage of opportunity youth in the New Orleans metro area were cut by just five percentage points, taxpayers would save an estimated $100 million each year and the savings would be multiplied over time as these youth remain connected to work. By means of comparison, the entire proposed New Orleans 2015 general fund city budget was $537 million. 7 $100,000 $50,000 $0 $13,900 $64,940 Each percentage point reduction of opportunity youth in New Orleans would save taxpayers $20 million annually. 8 The Cowen Institute Reconnecting Opportunity Youth: Data Reference Guide

9 Opportunity Youth in New Orleans Opportunity youth in the New Orleans metro area generally have backgrounds that resemble opportunity youth nationally. Both groups tend to be under-educated and from low-income households. While the disconnection rate among each race and ethnicity is similar, the percentage of opportunity youth in the New Orleans area by race and ethnicity is quite different. The majority of opportunity youth locally are African-American, while White and Latino youth make up a smaller percentage locally than they do nationally. The dropout rate among all year olds is also higher in New Orleans, which has led to a disproportionately high number of low-skilled workers. Research has shown that in Louisiana, middle skills jobs (i.e. those for workers with some college training or an associate degree) are more plentiful than the supply of middle-skill workers and projections indicate that this demand should remain steady through Opportunity youth in New Orleans are more likely to : Be male Be high school dropouts Have a GED Not enroll in college Have a disability Be uninsured Have children When compared to all year olds in the area. Going forward, to maximize the potential of our city s youth, it will be critical to retain students through high school, to increase the rate at which young people receive some training beyond secondary school, and to reconnect young people who have disconnected from work and school. Doing so will increase the likelihood that more young people will be well positioned for living-wage jobs locally and nationally. March

10 Learn More Visit to learn more about opportunity youth and the Cowen Institute s work. Visit the websites listed below for more information. Organizations American Youth Policy Forum: Aspen Opportunity Youth Incentive Fund Network: Jobs for the Future: National Youth Employment Coalition: Opportunity Nation: Reports Civic Enterprises: A Bridge to Reconnection: A Review of Federal Funding Streams Reconnecting America s Opportunity Youth Civic Enterprises: The Economic Value of Opportunity Youth The Data Center: New Orleans Kids, Working Parents, and Poverty McKinsey Center for Government: Education to Employment: Designing a System That Works Measure of America: One in Seven: Ranking Youth Disconnection in the 25 Largest Metro Areas National Youth Employment Coalition: Building Capacity for Reconnecting Opportunity Youth 10 The Cowen Institute Reconnecting Opportunity Youth: Data Reference Guide

11 Endnotes 1 Unless otherwise specified, all opportunity youth estimates are from the Cowen Institute s analysis of 2013 American Community Survey PUMS data. 2 New Orleans Metro Area consists of the following parishes: Orleans, Jefferson, Plaquemines, St. Charles, St. James, St. John, St. Tammany, and St. Bernard. 3 Correlation is stronger than Correlation is stronger than 0.8 using poverty estimates from data. 5 Metropolitan Statistical Areas are determined by the Office of Management and Budget and are adjacent areas of high social and economic integration. 6 Cost estimates are from Clive Belfield, Henry Levin, Rachel Rosen, The Economic Value of Opportunity Youth, January City of New Orleans, 2015 Annual Operating Budget, Achieve, Inc., The Future of the U.S. Workforce, (2012):2-17. Methodology This analysis used 2013 American Community Survey (ACS) Public Use Microdata Sample (PUMS) data to identify the rates of opportunity youth. Opportunity youth are identified as year olds who are neither working nor in school. The same data were also used to estimate the demographics. Each Metropolitan Statistical Area (MSA), which are delineated by the Office of Management and Budget (OMB), was identified by the corresponding Public Use Microdata Areas (PUMAs). The Census Bureau classifies Hispanic origin as an ethnicity and not a race, which means that individuals of Hispanic descent are classified as White, African-American, or another race. In this analysis, rates of disconnection by race are identified exclusive of young people who identify themselves as Hispanic and all people of Hispanic origin are grouped together. This means, for example, that White is actually White, non-hispanic and African-American is actually African-American, non-hispanic. March

12 RECONNECTING OPPORTUNITY YOUTH 2015 Data Reference Guide For more information about opportunity youth in the New Orleans area and ways the community can be involved to address the issue, visit the Cowen Institute s website at:

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