from the Dallas Fed
— this post authored by Alexander W. Richter, Daniel Chapman and Emil Mihaylov
The U.S. labor force participation rate has declined over the past several decades, particularly since the Great Recession. The rate is defined as the number of people either employed or unemployed as a proportion of the total noninstitutionalized working-age population (typically those 15 or 16 years of age and older).
While the unemployment rate takes into account the conditions of those in the labor force – either employed or actively looking for work – the participation rate captures those in and out of the labor force. Looking at both indicators is important because a decline in the unemployment rate, instead of reflecting better economic conditions, could reflect a decline in the participation rate if longterm unemployed workers drop out of the labor force.
An examination of the participation rate by gender, age and educational attainment in the U.S. and in the developed world, as reflected in Organization for Economic Cooperation and Development (OECD) and Eurostat data, reveals several trends. Notably, for nearly all categories, the participation rate has declined more in the U.S. than in other OECD countries over the past 20 years. While no single reason likely explains these differences, potential Declining U.S. Labor Force Participation Rates Stand Out by Alexander W. Richter, Daniel Chapman and Emil Mihaylov factors include less-generous maternity and child-care policies, higher incarceration rates, poorer health outcomes and less spending on on-the-job retraining and job-search assistance programs.
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Source
https://www.dallasfed.org/~/media/documents/ research/eclett/2018/el1806.pdf
