The Millennials' Transition from School to Work

We present the first study of the high school-to-work transition for American Millennial males and females. Using data from the PSID Transition to Adulthood from 2005-2011, we estimate two versions of the Burdett and Mortensen (1998) model, one with an exogenous productivity distribution and one that endogenizes productivity. We compare our Millennial results to those of Generation X for males and find a substantial decline in search efficiencies for white males with convergence to black males. We also find convergence in search patterns for Millennial males and females leaving less room for search to explain the gender wage gap. Finally, we show the labor market deteriorated substantially for both males and females who graduated from high school during the Great Recession.