|Although unemployment has fallen, the civilian labor force participation|
rate has not yet recovered. Chart of BLS data by the St. Louis Fed.
Last week the Joint Economic Committee of the Congress held a hearing on the subject.
Sen. Dan Coats (R-Ind.), chairman of the JEC, yesterday wrote in the Washington Times about possible explanations of the decline in labor force participation, based on the hearing:
- Baby boomers retiring? He notes that while Americans are living longer, which means more retirees, the participation rate for older workers has been rising. (One reason is that the age for pickup of Social Security has been rising along with longevity.)
- Younger people entering the workforce later? Yes, he says that more young people are delaying the start of the working careers by remaining full-time students.
- Unexpectedly slow recovery from the deep financial crisis of 2007-08, and the difficulty that laid-off workers have had in re-entering the workforce.
- Federal disability programs, described as a "shadow unemployment program", because they reduce incentives to look for work.
- A rising number of single-parent families, where the head of household has difficulty holding down a job at the same time as looking after children.
Other explanations are offered in my three prior posts. The latest data suggest a possible bottoming-out of the rate.