Following April’s jobs report, there has been much discussion about America’s declining labour force participation rate. Brad DeLong, for instance, writes:
Given the current state of the employment-to-population ratio, we would predict that the current labor-force participation rate would be 1.5% points below its natural rate. That gives us a predicted labor-force participation rate today of 64.3%-64.7%. Instead, our labor-force participation rate is 63.6%.
That is a gap of 0.7%-1.1% points of the adult population: people who really ought to be in the labor force right now, but who are not.
Evan Soltas breaks down the numbers of the decline according to various factors, including gender. And as many people, for instance Mark J. Perry, have noted, the decline in the labour force participation rate is partly due to the fact that men are leaving the labour market.
Mike Konczal quotes Ben Bernanke saying that we are “no longer getting increased participation from women /…/ society ages and also, for other reasons, male participation has been declining over time.”
Catherine Rampell reaches the same conclusion:
The main reason the labor force has been declining in the last couple of decades, then, is that men have been dropping out in droves.
Rampell has posted two interesting graphs, where the first shows the labour force participation rate among adults aged 25-54, and the second shows the long-term trend of men aged 25-54 leaving the labour market.
The following figures take off where her second graph ends, focusing on the differences for men in various age groups:
This chart shows foremost two things: 1) the labour force participation rate varies widely between the age groups, and 2) the only age group for which we find a large decline is men aged 15-24.
If we draw another graph using 1990 as an index year, the second point becomes clearer:
So for two age groups, the labour force participation rates among men have actually increased over time, for two other groups they have – in relative terms – decreased a little, and for the youngest men it has declined severely compared with 1990. Here it is also interesting to note the clear positive relationship between age and change in labour force participation rate.
But what about the youth? Pete Seeger’s old lyrics do indeed come in handy here: “Where have all the young men gone?”
(Feel free to use all figures in this post as you wish.)