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Tuesday, May 13, 2014

Background on Labor Force Participation

Nicholas Eberstadt writes at AEI:
Although a higher fraction of Americans 20 and older are working today than at the start of the War on Poverty (61.2 percent in January 2014 versus 57.2 percent in January 1964), and though labor force participation rates are likewise higher today than 50 years ago, these overall figures mask two distinct tendencies.

On one hand, adult women are much more likely to be working or looking for work today than two generations ago. Labor force participation rates for women 20 and older are fully 20 percentage points higher today than in early 1964 (58.6 percent in January 2014 versus 38.5 percent in January 1964). A lifestyle that includes at least some paid employment has become the norm for American women over the past two generations.
On the other hand, men have been a diminishing presence within the workforce​-​and not only thanks to the rising share of women who seek to work. The proportion of men 20 and older who are employed has dramatically and almost steadily dropped since the start of the War on Poverty, falling from 80.6 percent in January 1964 to 67.6 percent 50 years later. No less remarkable: The proportion of adult men in the labor force​-​either working or looking for work​-​has likewise plunged over those same years, from 84.2 percent then to 71.9 percent today. Put another way: Our country has seen a surge of men making a complete exit from the workforce over the past 50 years. Whereas fewer than 16 percent of men 20 or older neither had work nor were looking for it in early 1964, the corresponding share today is more than 28 percent.
In purely arithmetic terms, the main reason American men today are not working is not unemployment. Rather, it is because they have opted out of the labor market altogether. For every adult man who is between jobs and looking for new work, more than five are neither working nor looking for employment.