Why Is Prime-Age Labor Force Participation So High?

Baskar Prabhakar, Deepika; Valletta, Robert G.

Journal Article

Why Is Prime-Age Labor Force Participation So High?

Abstract: The labor force participation (LFP) rate for prime-age workers surged from early 2021 through early 2023, especially for women. This helped reduce the large shortfall of available workers relative to available jobs that emerged during the recovery from the pandemic. Analysis of state labor markets indicates that the cyclical response of prime-age LFP was much more pronounced during the two most recent business cycles than in prior ones. This state-level relationship weakened in 2023, however, suggesting that the cyclical gains in prime-age LFP are winding down.

Keywords: labor force participation; pandemic; covid19; prime-age workers;