The share of prime-age men in the labor force has declined from its peak of 98 percent in 1954 to 88 percent today, reports the Council of Economic Advisers. This precipitous decline was largely masked as women entered the workforce in record numbers up until the 1990s, when their participation rate began to stagnate and eventually decline as well.
Prime-age male participation has fallen most dramatically for black men, those with a high school degree or less, nonparents, and veterans.
Explanations for the decline tend to focus on supply-side factors (workers are ill-fit for the jobs available) or demand-side factors (employers aren’t hiring). The CEA leans more on the demand side, suggesting that trade and technology have reduced demand for less-skilled labor, principally in the manufacturing sector.
But not all experts agree with this assessment. In Men Without Work, Nick Eberstadt provides a meticulously-documented account of a “flight from work.” Eberstadt concludes that the problem largely lies in the supply of skilled, able, and willing workers, and points to the rise in reliance on disability insurance. Alan Krueger shows that 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. Anne Case and Angus Deaton show that midlife mortality rates due to addiction, depression, and suicide are rising—but only for white, prime-age adults. Their research does not imply that the skyrocketing mortality rates are caused by declining labor force participation, but these trends are worrisome nonetheless.
There are likely many more factors dragging down America’s prime-age labor force participation rate—increasing numbers of individuals lack the skills necessary to perform today’s jobs. Rising incarceration rates have left growing numbers of Americans with criminal records. Many men might be unwilling to work in the rapidly growing, but traditionally female-dominated professions.
Chosen excerpts by Job Market Monitor. Read the whole story at What we know—and don’t know—about the declining labor force participation rate | Brookings Institution