While a comprehensive explanation of labor force nonparticipation is outside the scope of this paper, we can gain some insight from self-reported reasons for being out of the labor force.2 In figure 3, we describe the reasons that prime-age men and women give for their nonparticipation. (The percentage in each category is out of the total prime-age nonparticipant population: for example, 36 percent of all prime-age nonparticipants are female caregivers.) More than 70 percent of labor force nonparticipants report that caregiving, disability, or early retirement kept them out of the labor force; 13 percent were not in those categories but had recent earnings, indicating that they had been employed at some point during the previous year. Not surprisingly, caregiving is the primary reported reason for nonparticipation—characterizing about 4 in 10 individuals overall and more than half of female nonparticipants.3
Excluding caregivers, male and female nonparticipants give similar answers as to why they are not in the labor force. Almost 30 percent of prime-age nonparticipants—roughly equally split between men and women—report being ill or disabled. With roughly 45 percent of prime-age male nonparticipants classified as disabled, health-related barriers to being in the labor force may represent a significant challenge. As noted in Krueger (2016), pain and pain medication may prevent a significant number of men from working.
The reasons for nonparticipation appear broadly stable when comparing 2016 with 2006 (see appendix figure 2). A slightly smaller percentage of nonparticipants are caregivers today (38% vs. 41% in 2006), and slightly more today are retired (5% vs. 4% in 2006) or students (8% vs. 5%), but notably, there was virtually no shift in the share of nonparticipants who are disabled (29% today vs. 28% in 2006).
Chosen excerpts by Job Market Monitor. Read the whole story at Who is Out of the Labor Force? | The Hamilton Project