CBO Report on Labor Force Participation
June 1, 2012 2 Comments
Whenever a jobs report comes out, one side or the other makes a comment about labor force participation to thwart the message of the other side. …Yeah, but labor force participation went up, or yeah but labor force participation went down. CBO (of course) has a useful March 2011 report on expected trends in the Labor Force participation through 2021. One key issue is how much the movement of the baby boomers will reduce labor force participation over time, and how much of the observed (and future) variation in labor force participation will be due to other factors, like the strength of the economy. This is the money graph from the report (p. 12):
Labor force participation is declining due to demographic changes and that will continue, but it is lower than would be expected due to workers who have exited the labor market for other reasons, some of whom have presumably given up hope of finding a job.