Academic journal article Monthly Labor Review

Age-Adjusted Labor Force Participation Rates, 1960-2045.

Academic journal article Monthly Labor Review

Age-Adjusted Labor Force Participation Rates, 1960-2045.

Article excerpt

A proposed new age-adjusted labor force participation rate eliminates the effect of changes in the age distribution; according to the new criterion, increases in women's labor force participation from 1960-2000 would have been even greater if shifts in the age distribution had not occurred

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Current labor force participation rates in the United States, particularly for women, are very different from what they were in 1960. Among the usual reasons given for the disparity are cultural, economic, and social changes in educational attainment, the person's age at marriage, childbearing, divorce, retirement, Social Security and pension benefits, and gender role expectations. Had none of these things changed, however, alterations in labor force participation rates would still have been observed, because participation in the labor force varies by age and the age distribution of the population changed significantly during the period in question, due to changes in fertility, migration, and mortality. (1) As exceptionally large cohorts of the population move into age categories that have above-average labor force participation rates, the labor force participation rate for the entire population moves up. Similarly, when those large cohorts move into age categories with below-average participation rates, the overall participation rate goes down. The same thing happens in reverse as exceptionally small cohorts move into age categories with above- or below-average participation in the labor force.

The effect of cultural, economic, and social changes on labor force participation could be better assessed if a way of measuring changes in participation were developed that eliminated the effect of demographic shifts in the age structure. One method for eliminating the confounding effect of a changing age distribution on changes in labor force participation is to focus, not on changes in the participation rate of the entire population, but on changes in the participation rate of specific age groups. This approach would examine, for example, how the participation rate of 20-to-24-year-olds changed over time, then how the rate for 25-to-29-year-olds changed, and so on through the age distribution. A difficulty with such a method is that it yields not one summary measure of participation for a society at any single point in time, but rather a group of participation rates--as numerous as the number of age groups into which the population is divided.

Demographers encounter similar problems, because basic demographic processes, such as fertility, migration, and mortality, also vary strongly by age. While abandoning neither crude indicators of these demographic rates (for example, the crude death rate), which ignore the confounding factor of age, nor age-specific rates (such as age-specific death rates), which provide no summary figure for the entire population, demographers long ago adopted age-adjusted rates (for instance, the age-adjusted death rate) as a means of summarizing a demographic process for an entire population. (2) Put simply, adjustment produces an overall population rate by applying age-specific rates for a given society at a given point in time against a "standard" age distribution. In this way, the rate at which a particular demographic process occurs in two different populations can be compared as if both populations had the same age distribution.

Adopting this approach, the analysis presented in this article calculates age-adjusted labor force participation rates for the total, the male, and the female populations of the United States for each year from 1960 through 2000, as well as hypothetical rates at 5-year intervals from 2005 through 2045. The "standard" age distribution used in these calculations is the age distribution in 1960. Using the adjusted rates shows how overall participation rates would have changed during those years if the baby-boom cohorts were not "marching through" the U. …

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