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Federal Reserve Bank of Kansas City
Economic Review
Interpreting the recent decline in labor force participation
Willem Van Zandweghe

At the turn of the 21st century, labor force participation in the United States reversed its decades-long increase and started trending lower. In the four years since the start of the recent recession, the labor force participation rate experienced a far bigger drop than in any previous four-year period. ; To disentangle the roles of long-term trend factors—such as demographic shifts—and the recession in the recent drop in participation, Van Zandweghe examines a variety of evidence, including data on demographic shifts, labor market flows, gender differences, and the effects of long-term unemployment. ; The evidence indicates that long-term trend factors account for about half of the recent decline in labor force participation, with the recession accounting for the other half.

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Willem Van Zandweghe, "Interpreting the recent decline in labor force participation" , Federal Reserve Bank of Kansas City, Economic Review, issue Q I, pages 5-34, 2012.
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