There’s been a lot of discussion over the last few years about Americans not working as much as they used to, and how this is related to the Great Recession.
It’s true: we’re not working as much as we used to.
But it’s false that this has much to do with the Great Recession.
The bottom panel shows the big picture: labor force participation peaked 9 years (and 1 whole business cycle) before the Great Recession?
Why is that? The reason is demographics. The baby boom ran from 1946-64. If people are going to have an unstable job history … they’re usually done by the time they’re 35. This means that America had a large swell of the population entering its most dependable working years between 1981 and 1999. Labor force participation rose through this period and peaked towards its end. It’s been declining since because of the baby bust.
So … we should expect labor force participation to continue to decline … probably for at least another decade.
Read the whole thing, entitled “When Looking at Job Numbers, Add In a Changing America” in the December 12 issue of The New York Times.
* This is related to last month’s post about whether disability claims are rising faster than they should be (they’re not).