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Journal Article
Will labor force participation bounce back?
The most recent U.S. recession and recovery have been accompanied by a sharp decline in the labor force participation rate. The largest declines have occurred in states with the largest job losses. This suggests that some of the recent drop in the national labor force participation rate could be cyclical. Past recoveries show evidence of a similar cyclical relationship between changes in employment and participation, which could portend a moderation or reversal of the participation decline as the current recovery continues.
Journal Article
Measuring Labor Market Similarities in Nearby Regions
Labor market conditions are similar in regions that are near each other. This is called positive spatial correlation. Analyzing county-level data from 1990 to 2024 shows that commuting flows may contribute to strong spatial correlation in employment growth. Spatial correlation appears to have strengthened since the 1990s, at the same time as more workers were commuting across county lines. As these connections grow through commuting flows, both favorable and challenging conditions in local economies may become more likely to spread farther than in the past.
Working Paper
Pulled Out or Pushed Out? Declining Male Labor Force Participation
The fraction of men working in the United States has declined consistently since the 1950s. This has contributed to slower labor force growth and resulted in considerable gaps between labor force participation in the U.S. and its industrialized peers. In this paper we examine the drivers of this trend, focusing specifically on prime-age men (aged 25–54). We compare non-participation rates across four generations – the Silent Generation, Baby Boomers, Generation X, and Millennials – and decompose generational gaps into “push” and “pull” factors that are intended to be ...
Journal Article
Comparing Measures of Housing Inflation
Measuring the price of shelter for homeowners is difficult, even when housing markets are stable. A new measure of shelter price inflation uses mortgage, tax, and insurance payments, rather than the implied rental value of homes used in the consumer price index (CPI). The payments method suggests year-over-year shelter price inflation rose 4.3% nationally in July, compared with the CPI’s 5.8% estimate. Conditions in rental markets likely explain this difference. Comparing the varying results nationally and across regions highlights the challenge of accurately measuring the shelter inflation ...
Working Paper
Cyclical and market determinants of involuntary part-time employment
We examine the determinants of involuntary part-time employment, focusing on variation associated with the business cycle and variation attributable to more persistent structural features of the labor market. Our theoretical framework distinguishes between workers? decision to seek part-time work and employer demand for part-time work hours, emphasizing demand and supply determinants of involuntary part-time work such as workplace technology, labor costs, and workforce demographics. We conduct regression analyses using state-level panel and individual data for the years 2003-2014. The results ...
Journal Article
The Recent Slowdown in Labor Supply and Demand
The pace of job growth cooled through mid-2025, while the unemployment rate rose relatively little. This seeming puzzle is explained by an even stepdown of labor supply and demand, meaning slowing labor force growth coincided with a slowdown in job growth. The recent decline in job growth is broad based across industries, suggesting a widespread softening of labor demand. For the labor force, recent declines are driven by changes in immigration flows and declining labor force participation. Together, these factors may signal some underlying fragility in the labor market.
Working Paper
Explaining Stagnation in the College Wage Premium
After growing substantially during the 1980s through the early 2000s, the college wage premium more recently has been largely unchanged, or stagnant. We extend the canonical production-function model of skill premiums to assess supply and demand contributions to the slowdown in college wage premium, using annual CPS ASEC data from the early 1960s through 2023. To account for the rising importance of women in the college educated workforce, we estimate a hybrid model that incorporates components that are disaggregated by age and gender. We also allow for non-linearities and changes over time ...
Journal Article
How Do Periods of Inflation, Recession Affect Real Earnings?
Households can lose spending power if they suffer job losses during recessions or when the cost of living rises at times of high inflation. One way to assess the historical roles these two factors have played in eroding economy-wide earnings is by breaking down the cumulative growth in inflation-adjusted household earnings into three components: nominal earnings growth, inflation, and employment growth. Analyzing the results suggests that periods of high inflation may undermine economy-wide real earnings growth more than mild recessions.
Journal Article
What’s behind the increase in part-time work?
Part-time work spiked during the recent recession and has stayed stubbornly high, raising concerns that elevated part-time employment represents a ?new normal? in the labor market. However, recent movements and current levels of part-time work are largely within historical norms, despite increases for selected demographic groups, such as prime-age workers with a high-school degree or less. In that respect, the continued high incidence of part-time work likely reflects a slow labor market recovery and does not portend permanent changes in the proportion of part-time jobs.
Journal Article
U.S. economic mobility: the dream and the data
Economic mobility is a core principle of the American narrative and the basis for the American Dream. However, research suggests that the United States may not be as mobile as Americans believe. The United States has high absolute mobility in the sense that children readily become richer than their parents. But the nation appears to fall short on relative mobility, which is the ability of children to change their rank in the income distribution relative to their parents. ; This Economic Letter is based on a presentation given by Mary Daly in April 2012.