Monday, June 09, 2014

Update: 41-Year-Olds and the Labor Force Participation Rate

by Calculated Risk on 6/09/2014 11:00:00 AM

To make a few simple points on the Labor Force Participation Rate, yesterday I posted 41-Year-Olds and the Labor Force Participation Rate . In the previous post I only used men for each age group to simplify.

By request here is a look at the participation rate of women in the prime working age groups over time.

Labor Force Participation Rate, Women, Prime Age GroupsClick on graph for larger image.

The first graph shows the trends for each prime working age women 5-year age group.

Note: This is a rolling 12 month average to remove noise (data is NSA), and the scale doesn't start at zero to show the change.

For women, the participation rate increased significantly until the late 90s, and then started declining slowly.  This is a more complicated story than for men, and that is why I used prime working age men only yesterday to show the gradual downward decline in participation that has been happening for decades (and is not just recent economic weakness).

Labor Force Participation Rate, Women, Prime Age GroupsThe second graph shows the same data for women but with the full scale (0% to 100%).  The upward participation until the late 80s is very clear, and the decline since then has been gradual.

The third graph is a repeat of the full scale graph for prime working age men.  The participation rate has been trending down for decades.

Labor Force Participation Rate, Men, Prime Age Groups To repeat: The bottom line is that the participation rate was declining for prime working age workers before the recession, there are several reasons for this decline (not just recent "economic weakness") and many estimates of "missing workers" are probably way too high.