Employment Growth,Population Growth, and the Recent Recession/Recovery

Lately, there has been a lot of discussion about whether the current rate of job creation is greater than usual or less than usual.  And the discussion has been framed in terms io the number of jobs that have been added.  This is almost certainly going to provide a biased look at job creation; what is likely to be a better indicator is the percentage increase in employment.  In doing this, it will also be important to look at the change in the number of people in the relevant age group, for which I will use the civilian non-institutional population age 16 and over. [1]


The annual growth in people with jobs is shown in Figure 1; the population (age 16 and over) is shown in Figure 2.  If employment is growing more rapidly than population, the employment-population ratio (EPR) is rising.  If employment grows more slowly than population, the EPR falls.  The latter will occur in recessions; the former is more likely to occur during recoveries.

Figure 3 is the (annualized) change in employment minus the (annualized) change in population.

Figure 3 may well be the most important of these charts.  A positive number here tells us that employment is growing faster than population, or, in an economist’s jargon, the employment-population ratio is rising.  When employment is rising more slowly than population, the economy might be experiencing a recession (more likely) or the economy might be experiencing a population boom that is not being matched by employment growth (less likely).  All of the instances of negative numbers in Figure 3 are recessions.

What we want to do here is look at the far right side of Chart 3.  It clearly shows the seriousness of the recession that began around the beginning of 2008 and the recovery that took hold in mid-to-late 2010.  What it does not show is any noticeable acceleration of employment growth (relative to population growth) after 2016.  (Figure 4 zooms in on the 2000-2020 period.)  What does appear to be the case is that employment growth has fluctuated between 0.5 percentage points and 1.0 percentage points faster than the growth in population.  Relative to other recoveries from recessions, this recovery has been both fairly prolonged—going on 10 years—and fairly weak.  The recovery from the 1974-75 recession saw employment growing between 1.5 and 2 percentage points faster than population.  The recoveries from the early 1980 recession and the early 1990s recession both saw employment growing as much as 1.5 percentage points faster than population.

So the most recent (2007-2009) recession was relatively severe and has had a relatively less robust recession, compared with recessions past.  It has, on the other hand, lasted a relatively long time. 


[1] I’ll be measuring, to be precise, the (not seasonally-adjusted) number of people with jobs, according to the Current Population Survey, and calculating the percentage change from the period 12 months earlier.  So, for example, the percentage increase in the number of people with jobs in January 2020 is 1.31% greater than the number of people with jobs in January 2019.  I will also be using the BLS data on population.  With the population data, there three anomalies, one centering on the 1950 Census population (which shows a period in which the US population allegedly fell) and the other two on the 1990 and 2000 Censuses (showing an unusually large increases in population).