Academic journal article Monthly Labor Review

Down and Down We Go: The Falling U.S. Labor Force Participation Rate

Academic journal article Monthly Labor Review

Down and Down We Go: The Falling U.S. Labor Force Participation Rate

Article excerpt

The authors track a rising participation rate from about 60 percent in the 1950s and 1960s to a peak of 67 percent at the turn of the 21st century, after which it has been falling consistently, to a low of about 63 percent today. They cite secular (as opposed to cyclical) forces as the main reason for the decline--primarily, the start of retirement for the baby-boom generation. This cohort has exerted a profound influence on the U.S. economy as it has passed through the age distribution. Born during the years 1946 to 1964, baby boomers have "consistently represented the largest fraction of the population," and their influence is still being felt as they retire, depressing the labor force participation rate.

But other forces are at work as well, chief among them a decline in the participation of prime-age workers, especially men. Specifically, the labor force participation of men 25 to 54 years old has fallen steadily, from 98 percent in 1954 to 88 percent today. Although part of this decline is due to men's participation less and less as they age, the key factor is generational: "More recent generations of men are participating less than their predecessors did," say the authors. Especially affected, they note, are men with a high school education or less and black men. But why are these later generations of men participating less? …

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