STUMP » Articles » Stat Crunching: Labor Force Participation Rate Trends, Prime Working Years » 29 June 2014, 13:43

Where Stu & MP spout off about everything.

Stat Crunching: Labor Force Participation Rate Trends, Prime Working Years  

by

29 June 2014, 13:43

Answering some questions about a recent NYT article from JustOneMinute. It involves the drop in the labor force participation rates for men and women since 2007.

1. Where Is The Baseline? How has male and female participation been affected by past recessions? And should the Times, or anyone, wonder why female participation was drifting down before the last recession?

2. You’re Not Getting Older, You’re Getting Better: how is it that women 55 and older are able to stay in the workforce? Their participation has gone up, which makes sense if people want to cling to their job and rebuild their 201(k). But how did they dodge the problems of aging parents and public sector layoffs that hit women a few years younger?

And here are the graphs from the NYT article that JOM is asking questions about:

The Labor Force Participation Rate stats are some of my favorite stats to look at (other than mortality stats), because they have some really fun long-term trends. And you will see that recessions don’t make as large an impact as one might think.

I’m going to give the long view first, and I’m going to break it out by age grouping and sex, because you will see those items have huge effects on the trend and level.

My data source is: The Bureau of Labor Statistics. My spreadsheets are here on Google Drive. Feel free to make your own copy for your own purposes. Also feel free to check that my data matches the original sources.

I am using annual data (the monthly fluctuations don’t matter very much), and the reason my data start in 1976 is that I want to use these 5-year age groupings, and they don’t start til 1976 (and for the older ages, those data series start some years later). I have looked at larger age groupings going back to 1948, and I can tell you the huge secular trends you’re seeing starting in 1976 goes all the way back to 1948.

The simplest answer is that there are long, secular trends that have nothing to do with recessions.

Women, in general, were increasing their labor force participation… until 1999/2000. At which point, it started coming down again. Here’s the women’s graph for “prime working years” (25 – 54):

Men’s labor force participation has just been sliding down down down for decades:

OH NOES!!!!!

Except…. take a look at the scales on these graphs. They are a bit misleading, in terms of the magnitude of these changes. This is also a problem with the NYT graphs — the scales for women’s labor force participation rates have been narrowed so that a relatively small change looks huge.

How about we put these graphs such that the scale runs from 0 to 100, and then we can compare apples to apples, eh?

Female labor participation rates, with full scale:

Male labor force participation rates, with full scale:

So the story of women in the work force, in terms of just labor force participation rates (not hours worked, not wages, etc) is that there was climbing up for decades, and then around 2000, it plateaued. About 25% of women in prime working ages are not in the labor force.

As for men, yes, there’s a noticeable decrease over the same time period, but it’s only 5-6 percentage point differences at these ages. For prime working years, only about 10% of men are not in the work force in 2013. Contrast that against the plateaued 25% of women of prime working ages.

In future posts, we’ll look at older and younger ages. There may be something more drastic going on there (and by “may be” I mean “definitely”).

I will also look at the gap between the sexes in labor force participation, but this is not going to be hugely interesting. You can already see the main dynamic here: narrowing because of women increasingly working outside the home… and then plateauing as equilibrium seems to have been reached.


Related Posts
Labor force participation rates, part 3: Older folks (55 and up)
Labor force participation rates, part 2: Younger Years (under 25) - Bad news?
Labor force participation rates, part 5: the Gender Gap