Tuesday, January 10, 2012

Demographics of Labor Force Participation

We’re hearing a lot lately about the weak job market — not just the high unemployment, but also about the declining rate of labor force participation. This was featured in a piece in Monday’s issue of The Wall Street Journal entitled “No Easy Balm for Joblessness Wounds”.

But, note how little business cycle behavior there is in this chart. The recessions before the last one: 2000-1, 1990-1, 1981-2, 1980, 1973-5 are mere hiccups on this chart.

Instead, what this looks like to me is the prime working years of the baby boomers. The oldest ones turned 18 in 1964, right where the upward trend starts. The youngest ones were 35 at the peak: just about the age where even slackers have settled into jobs, and one wouldn’t expect participation to increase further. But, that’s also where the oldest boomers started retiring in serious numbers.

P.S. Originally, I had a chart constructed from the tools available at the Bureau of Labor Statistics posted here. But, it wasn't loading properly, so I substituted the above chart from the article I cited.

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