Scott Sumner looks at employment trends for different age groups to discern whether child-care issues, fear of COVID, or overly generous unemployment insurance is keeping potential workers on the sidelines:
I am especially struck by the fact that employment for 20-24 year olds seems to have declined more sharply than for 25-54 year olds. They experience less health risk than 25-54 year olds, and they probably have less need for childcare. On the other hand, 20-24 year olds tend to be lower wage workers, the group most likely to earn more on unemployment insurance than on their former jobs.
While I suspect that all three factors are depressing labor supply, the strongest evidence seems to be for the effect of the supplemental UI program.