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Baby Boomers and Participation in US – The aging effect accounts for more than 40 percent of the decline

The United States is in the process of a dramatic demographic change – the rapid aging of the popula- tion – and that change has implications for the labor force participation and unemployment figures that we see every month. Since older people have lower labor force participation than the young, as more of the population moves into older age groups the national labor force participation rate will fall. On the positive side, older workers who do participate have lower un- employment rates than younger workers, so the same aging of the population will lower the unemployment rate – all else equal.

Alicia H. Munnell in The Impact Of Aging Baby Boomers On Labor Force Participation (Center for Retirement Research) explores the implications of the aging of the baby boom generation for labor force participation over a 40-year span and since the onset of the Great Recession in 2007. 

Key points:

  • Older people have lower labor force participation rates than younger adults, so aging baby boomers are pushing down overall participation.

Capture d’écran 2014-03-20 à 08.37.00

  • This aging effect accounts for more than 40 percent of the decline since the onset of the Great Recession.
  • An aging population also lowers unemployment slightly because older individuals who remain in the labor force are more likely to have a job.
  • The aging trend will continue for the rest of the decade and will show up in monthly labor force statistics.

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Chosen excerpts by Job Market Monitor. Read the whole story at The Impact of Aging Baby Boomers on Labor Force Participation | Center for Retirement Research.

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