Saturday, May 5, 2012

Labor Force Participation

Today’s Wall Street Journal brought Bureau of Labor Statistics data on labor force participation, showing it dropping (BLS press release link). The labor force is defined as those aged 16 and older; the participation rate is the percent who are actually working or seeking work. The Journal shows data from 1980 to 2012, which forms rather a bulge, with participating rates dropping below 1980 levels. I got curious and obtained a longer series from the BLS, thus going back to 1948:

The lowest numbers on this chart came in December of 1954, 58.1 percent, undoubtedly a consequence of the July 1953-May 1954 recession. The peak came in 2000 when labor force participation reached its maximum, 67.3 percent, January through April. Thus less than 10 percentage points mark the bottom and the top.

The bulge in the curve is in large part the consequence of women’s entry into the labor force. In 1948, female participation was 32.3 percent. By 2000 it had reached 59.9 and by 2010 it had declined to 58.6 percent. The pattern for men has been a gradual decline, from a rate of 85.1 percent in 1948 to 74.8 in 2000 and 71.8 percent in 2010.

The BLS’ own projections indicate an ultimate stabilization of this pattern around 60 percent in the out years, meaning by 2050 or thereabouts. Or maybe it will be a lot higher than that as the oil runs out…

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