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Worforce Participation

Paper Session

Saturday, Jan. 4, 2025 10:15 AM - 12:15 PM (PST)

San Francisco Marriott Marquis, Golden Gate A
Hosted By: National Association of Forensic Economics
  • Chair: Christina Tapia, Northwest Economics

Have Older Workers’ Labor Force Participation Rates Plateaued?

Kevin Cahill
,
ECOnorthwest

Abstract

For the first time in more than three decades, older workers’ labor force participation rates are no longer increasing. Even more remarkable is that this trend contrasts with changes among younger workers, who have experienced increases in labor force participation in the wake of the Covid-19 pandemic. A narrative that has existed for more than two decades—that older workers have been the exception to reductions in labor force participation generally—may be coming to an end. This paper explores the evidence surrounding older workers’ labor force participation rates over the past decade, and what to expect going forward.

Pulled Out or Pushed Out? Why So Many Men No Longer Work

Evgeniya Duzhak
,
Federal Reserve Bank of San Francisco

Abstract

The fraction of men working in the United States has declined consistently since the 1950s. This has contributed to slower labor force growth and resulted in considerable gaps between labor force participation in the U.S. and its industrialized peers. In this paper we examine the drivers of this trend, focusing specifically on prime-age men (aged 25–54). We compare non-participation rates across four generations – the Silent Generation, Baby Boomers, Generation X, and Millennials – and decompose generational gaps into “push” and “pull” factors. We define pull factors as those that draw men out of the labor force such as schooling or caretaking. Push factors are those that limit labor market opportunities, such as skills mismatch or disability. Our findings suggest that both pull and push factors are important with the most notable being skills mismatch, caretaking responsibilities, and prolonged continuing education.

What is the Earning Capacity of Those Who Don't Work?

Scott Gilbert
,
Southern Illinois University

Abstract

For working-age adults, those who work have a demonstrated earning capacity, and those
work don't work nevertheless have some unobserved earning capacity, in which case
the distribution of observed earning capacity of workers may be similar to or instead different from that
of non-workers. With individual variation in wage and employment that reflects
underlying variation in labor productivity and financial endowment, as well as consumption-leisure preferences,
in a simple model of labor market equilibrium the gap between worker and non-worker earning
capacity hinges on the extent to which productivity variation dominates that of endowment variation. Aligning the economic model to survey data on U.S. households, the average earning capacity of non-workers
is about 85 percent of those who work, an estimate that aligns reasonably well to
data on people who re-enter the workforce after raising young children.

Discussant(s)
Hossein Borhani
,
Charles River Associates
Leila Bengali
,
Federal Reserve Bank of San Francisco
Nora Ostrofe
,
JS Held
JEL Classifications
  • K0 - General
  • K0 - General