Tuesday, September 18, 2018

"Inactive, Disconnected, and Ailing: A Portrait of Prime-Age Men Out of the Labor Force"

by Bill McBride on 9/18/2018 01:03:00 PM

Some new research on our of the labor force prime age men: Inactive, Disconnected, and Ailing: A Portrait of Prime-Age Men Out of the Labor Force (ht Noah Smith)

This report is intended to enrich our understanding of who these prime-age "inactive" men are. It summarizes evidence from past research and fills out our picture of these men, providing some details about their past and present social and emotional lives. We introduce an under-utilized dataset little-known to economists and sociologists, the "National Epidemiological Survey on Alcohol and Related Conditions-III," or NESARC-III.

Consistent with other survey data, the NESARC-III indicates that in 2013, 11 percent of prime-age men were outside the labor force. Roughly 45 percent of them indicate that their current situation involves illness or disability. Roughly 15 percent of inactive men are in school, 5 to 10 percent are retired, and another 5 to 10 percent are homemakers or caregivers. About a quarter of prime-age inactive men do not fit any of these categories. Contrary to the common view that most of these men have "dropped out" of the labor force after becoming discouraged by the job market, few prime-age inactive men indicate this to be true, and only 12 percent of able-bodied prime-age inactive men indicate in household surveys that they want a job or are open to taking one.

We confirm research by other scholars that a large number of inactive men are unambiguously and seriously sick or disabled. We provide new information, showing that many inactive men have poor physical health, poor mental health, or both. Over one-third of them (and nearly three in five disabled inactive men) are in the bottom quarter, nationally, of both physical and mental health.

Inactive men have fewer skills than employed men and live in poorer homes, often relying on public safety nets to get by. Two-thirds of inactive men personally received government assistance in the preceding year. One-third of inactive men have been incarcerated (including nearly half of disabled inactive men). Along with other evidence presented here on mobility-impeding behavior, such high incarceration rates suggest employment challenges.
emphasis added
CR Note: This is a reason why considering both demographics AND long term trends is important when trying to forecast the Labor Force Participation Rate (LFPR) and to estimate the remaining slack in the labor market. See: Labor Slack and the Participation Rate (Spreadsheet included)