STUMP » Articles » Labor force participation rates, part 2: Younger Years (under 25) - Bad news? » 30 June 2014, 02:45

Where Stu & MP spout off about everything.

Labor force participation rates, part 2: Younger Years (under 25) - Bad news?  


30 June 2014, 02:45

In yesterday’s post, we saw that there were some very long-term trends for labor force participation rates for both men and women that swamped any short-term fluctuations.

Men’s participation rates had been more or less steadily decreasing since 1976, and women’s steadily increased from 1976-2000ish, and then plateaued.

Of course, those were for what I called “prime working years”, from age 25 to 54. Let’s look at the left end, for those age 16 – 24. I will use the full 0-100 scale for fair comparison with other graphs. I’m adding the age 25-29 group for comparison as well.



Um, hmmm.

I think we are beginning to see where some of the huge movements in labor force participation rates are coming from: younger ages. And more from males than females.

Now, this is not necessarily a bad thing, depending on the reason for these decreases. But I doubt this is all due to more and more people going to college and therefore not working. After all, many people work while in college, if only during the summer. Again, I’m only looking at labor force participation rates here, not wages. So it can also be the case that as labor force participation rates pick up (at least for men) at ages 25-29, these people may be offered lower salaries given their desperation to get a job. There may be some evidence for that.

I have seen underemployment at entry level for those seeking actuarial careers… we are swamped in that age range in terms of number of resumes we get for entry-level openings. We are a very small corner of the economy, though, so I would not necessarily set store by that.

I have a feeling these slides in labor force participation rates are causing trouble for young adults, and more specifically, young men. I think the relatively large decrease for those age 20-24 is far more concerning than the slide for those under age 20.

In the next post, we will look at what’s happening with those 55 and older.

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