Labor Force Participation Data

Source:  http://www.ritholtz.com/blog/2009/01/labor-force-participation-rate/

While looking at the unemployment numbers is useful, an additional employment metric that is very interesting over time is the labor force participation rate, since the fudging of “actively looking for work” is not involved.  This series trended up because of the increase of women in the workforce through 2001, but is now back down to levels seen in the late 1980s!  We’re 3.6% below the level seen in the dotcom boom, which translates to about 8.5 million less people employed.  Moreover, the velocity of labor force participation decline in the last six months is particularly striking and does not look like it is approaching bottom.

Labor Force Participation Rate

chart by Mike McCarthy

The numbers on the chart are straight from BLS.  The 8.5 million number is a personal calculation though.  I pulled the civilian noninstitutional population of 235 million from Table C at BLS.   Multiplying 235 million by (64.6 – 61.0) = 8.5 million less jobs than the equivalent 2000 participation rate.

See also:

http://www.bls.gov/opub/working/page3b.htm

                                                       

   Source:  The Economists View

http://economistsview.typepad.com/economistsview/2005/12/cyclical_and_lo.html

 

Chart 2 shows labor force participation rates by age group since 1948. Declining participation rates among youth is a long-term trend, ongoing since the late 1980s. The decline has seemingly intensified in and around recession years, in 1990 and again post-2000, for example. The opposite trend holds for mature workers. .... Prime-age workers (ages 25 to 54) ... have experienced a leveling off in rates. ...

 

Some of the drop in youth participation stems from a decline in the share of students who work. Chart 3 shows how the drop-off in participation among youth who are enrolled in school began earlier and is much steeper than among youth who are not enrolled in school. Compounding the effect of this sharp decline in participation rates among students is an increase in the share of 16- to 24-year-olds who are students. Between 1985 and 2004, the share of 16- to 24-year-olds enrolled in school jumped from 36 percent to 51 percent.

 

Long-run changes in the prime-age population’s participation behavior have been primarily driven by dramatic changes in female labor force participation since the 1950s. ... [a]s Chart 5 illustrates...

The recent downturn in women’s labor force participation rate has surprised many. ... More than anything else, ... research seems to point to “unexplained factors” driving down female labor force participation in recent years. In other words, this phenomenon is not well understood.

 

In fact, labor force participation rates have risen among individuals ages 25 to 64 who lack a high school diploma—from 58.3 percent in 1994 to 63.2 percent in 2004. All other education groups have experienced declines...