Why labor force participation has stayed about the same for years, apart from the pandemic
Why labor force participation has stayed about the same for years, apart from the pandemic
The labor force participation rate — how much of the working age population has a job or is looking for one — held at 62.7% percent last month, according to the latest jobs report released Friday. It’s been at that level for several months and, aside from the pandemic, has stayed at around 63% for years now.
Aging baby boomers play a big role here, according to Aaron Sojourner, an economist at the Upjohn Institute.
“We have a big group of people who have been working, have been working, have been working, and are now hitting the age where they’re retiring,” he said.
That’s pushing down on the labor force participation rate. Holding it up is a strong job market for people aged 25 to 54, considered the “prime” part of the workforce. Nearly 84% of that age group was in the labor force in September.
“You have to go back 23 years to find prime-age labor force participation rates that high,” Sojourner said.
For many, however, to stay in a job requires access to child care. And a final round of federal pandemic aid for child care just expired, noted Jasmine Tucker, vice president for research at the National Women’s Law Center.
That could cause some providers to shut down. “If supply goes down, but demand is only going up, right, there’s obviously a mismatch there,” she said. “And what are parents going to do?”
Some may decide they have quit their job to take care of their kids.
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