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Sunday, November 03, 2013

What's Been Happening to Adult Male Labor Force Participation Rates?

In a symposium (the transcript is posted on his blog), Brad DeLong says this:

My friend and coauthor Larry Summers...was talking about the extraordinary decline in American labor force participation even among prime-aged males--that a surprisingly large chunk of our male population is now in the position where there is nothing that people can think of for them to do that is useful enough to cover the costs of making sure that they actually do it correctly, and don’t break the stuff and subtract value when they are supposed to be adding to it...​That is a problem that human societies have never faced before.

I thought it would be useful to look at the dimensions of this decline, and here it is (data from the BLS web site):

(Click to enlarge.)

Two things are fairly quickly apparent.  Overall, the labor force participation rate of adult males (age 25-54) has been declining since around 1960; this is also true for white males. 

Second, this decline has not been smooth or consistent.  For all adult males and for white males (for whom data are available from 1948 and 1954 respectively), the decline from 1960 to 1974 seems relatively smooth.  For black males (for whom data are available only beginning in 1972), there appears tp be a fairly abrupt drop in the 1974-75 recession.  And then the LFPRs seem to stabilize (at around 95% for white males and 88% for black males), until the recession of 1991.  Then there is another not-so-abrupt drop--to about 92.5% for white males and around 82.55% for black males--between 1991 and 1995.  Then the rates again stabilize and, for black males, rise to about 85%), until the recession of 2001.  Again LFPRs drop, to about 92% for white males and 81.5% for black males.  Again, stabilization for white males, and an increase for black males (to about 83.5%) by 2007.

And since then LFPRs for adult males have fairly consistently declined--to about 89% for white males and about 80% for black males.

Both for white males and for black males, roughly half the decline in LFPR has occurred since 2007--since the Great Recession began.  To me, this is troubling (as it is to Summers and DeLong).  I think it should be troubling for all of us.


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