Demographic Trends Are Major Factors in Today’s Weak Labor Force Growth
Abstract: The size of the US labor force declined by 2.3 million people between December 2019 and December 2021, sparking widespread debate about the underlying factors constraining labor supply. Broadly speaking, changes in the overall size of the labor force come from changes in labor force participation rates (LFPRs), changes in the demographic makeup of the population, and changes in the size of the population. Research has documented the role of changes in LFPRs, especially the jump in the number of retired people (Briggs, 2021; Faria e Castro, 2021; and Kaplan et al., 2021) and the drop in the LFPR of mothers of young children (Aaronson and Alba, 2021, and Pitts, 2021). However, demographic trends have also constrained the size of the labor force.
Keywords: Labor Force; population; demographics;
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Provider: Federal Reserve Bank of Cleveland
Source: Federal Reserve Bank of Cleveland
Publication Date: 2022-04-21