Labor Force Dropouts on the Rise

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labor force dropouts
Four Businesspeople Walking in Office Corridor

Brookings has published a round-up of research on the rise in labor force dropouts: Men and women of prime working age who are no longer employed or officially looking for work.

The decline offsets, in part, the good news about the overall unemployment rate, which the BLS puts at 4.8 percent. Overall labor force participation is 62.9 percent, down from the peak of 67.3 in the 1990s.

In fact, when the peak occurred, prime-age men had already started to become labor force dropouts.   Rising participation by women obscured that decline for a while, but in recent decades, women have become labor force dropouts as well.

In fact, a graph on the Brookings report shows that back in the late 1940s, participation by men 24-54 was near 100 percent, while fewer than 40 percent of women worked outside the home. The stats have converged, with more than 70 percent of prime-aged women and fewer than 90 percent of prime-aged men now in the workforce.

“Prime-age male participation has fallen most dramatically for black men, those with a high school degree or less, nonparents, and veterans,” according to Brookings.

But why?

One bleak factor: “self-reported disability and pain is significantly higher among men out of the labor force: one-third of prime-age men not in the labor force have a disability, compared to 2.6 percent of prime-age employed men. Half of those not in the labor force take pain medications daily,” according to Brookings. In addition, “midlife mortality rates due to addiction, depression, and suicide are rising–but only for white, prime-age adults.”

It’s hard to know whether these factors are the cause labor force dropouts or the affect of scarce jobs for people with low skills.

The debate about the causes of labor force dropouts means, of course, that solutions are also up for debate. One possibility is re-thinking the rules about disability insurance, allowing more people to work as their level of ability allows. Helping prime-aged women with family leave and childcare is another recommendation. Investment in training is unanimously supported.

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