In my last two blog posts, I discussed trends in labor force participation (here) and reasons why so many people are out of the labor force (here). As I noted in my most recent post, shifting demographic trends have changed the landscape of the labor force over the last decade and are likely to continue into the future – this is especially true of the oldest age cohorts. In particular, those cohorts have managed to simultaneously increase their rates of labor force participation while at the same time adding the largest number of people not in the labor force. The reason for this seeming incongruity is that population growth for this group is rapid. The population pyramid below, which is provided by the US Census Bureau, shows how the dynamics of the US population have changed through time. The pyramid, which allows you to scroll through years from 2000 to… View Full Post
A data series that economists follow closely is the labor force participation rate. The labor force participation rate, which is estimated by the Bureau of Labor Statistics (BLS), is the labor force aged at least 16 years (or all appropriately aged individuals classified as employed or unemployed) as a percent of the civilian noninstitutional population aged 16 or more. Prior to the Great Recession, the US participation rate peaked at 66.4%. In other words, 66.4% of all noninstitutionalized individuals were either employed or looking for work. However, post-recession, the rate has been on a downward trajectory and has now registers 62.7%. Analysts often argue that the declining participation rate is worrisome because it may signify weakness in the economy, and specifically in the job market. The argument goes: if the economy was in a better position, an increasing proportion of the population would be either working or looking for work…. View Full Post
Although the US economy ended 2015 on somewhat shaky footing, several measures of the labor force are still improving. In particular, the data show that while there has been no upward movement in employer layoffs for several years, voluntary quits have been increasing since 2009. In fact, in December 2015, voluntary quits totaled nearly 3.1 million, which just about equals levels prior to the Great Recession. Voluntary quits are seen as a measure of labor market optimism (as labor market opportunities increase, voluntary quits increase) and an increase in the series is encouraging. Layoff and quit data are produced by the Bureau of Labor Statistics’ Job Openings and Labor Turnover Summary (JOLTS) program; the most recent data can be found here.