Labor Force Participation: Recent Developments and Future Prospects

By S. Aaronson, Tomaz Cajner, Bruce C. Fallick, Felix Galbis-Reig, Christopher Smith, William L. Wascher. 2014

180 citations recorded by the source corpus.

Since 2007, the labor force participation rate has fallen from about 66 percent to about 63 percent. The sources of this decline have been widely debated among academics and policymakers, with some arguing that the participation rate is depressed due to weak labor demand while others argue that the decline was inevitable due to structural forces such as the aging of the population. In this paper, we use a variety of approaches to assess reasons for the decline in participation. Although these approaches yield somewhat different estimates of the extent to which the recent decline in participation reflects cyclical weakness rather than structural factors, our overall assessment is that much of the decline is structural in nature. As a result, while we believe some of the participation rate’s current low level is indicative of labor market slack, we do not expect the rate to substantially increase from current levels as labor market conditions continue to improve.

Subfields: Demography, Economics and Econometrics, General Health Professions

View Paper: https://www.semanticscholar.org/paper/e7b6f7233db34eec4f0cd72b4f9bd9e02f7b8cdc

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Demography

1. Olivier J. Blanchard
2. George J Borjas

In Economics and Econometrics

1. Leonardo Melosi
2. Alejandro Justiniano
3. Jonas D. M. Fisher
4. Jeffrey R. Campbell
5. Olivier J. Blanchard
6. George J Borjas
7. V. Ramey
8. Juan F. Rubio-Ramirez

In General Health Professions

1. Olivier J. Blanchard
2. Alejandro Justiniano
3. George J Borjas
4. Chris Tilly
5. Gordon H. Hanson
6. Christian Dustmann
7. Lawrence M. Kahn
8. B. Bratsberg

Citations in the corpus

• Forward Guidance and Macroeconomic Outcomes since the Financial Crisis (2016, background): “To do so we take advantage of work done at the Federal Reserve Board to address evolving demographic effects as well as other secular changes in the labor market described in Aaronson, Cajner, Fallick, Galbis-Reig, Smith, and Wascher (2014), Fleischman and Roberts (2011), and Roberts (2014).”
• The Labor Supply of Undocumented Immigrants (2017, background): “It is well known that there has been a steep and long-term decline in the labor supply of men over the past few decades, and that this decline perhaps accelerated after the onset of the Great Recession in 2008 (Aaronson et al., 2006; Aaronson et al., 2014; Farber, 2011).”
• Should We Reject the Natural Rate Hypothesis (2018, background): “Suppose first that both the independence hypothesis and the accelerationist hypothesis strictly hold, so b in equation (1) and x in equation (2) are equal to zero.”