Contributions to Change in Labor Force Participation, per the Atlanta Fed

The single largest factor contributing to the decline in the overall Labor Force Participation Rate has been the rising share of older Americans in the population. In 2007, about one in five Americans were over 60 years old. In 2015, almost one in four were over 60.

This, write Federal Reserve Bank of Atlanta economists John Robertson and Ellyn Terry, accounts for the biggest part of the decline in the Labor Force Participation Rate. However, there are behavioral factors, changing ones at that, that also contribute to the fall. Robertson and Terry write, that relative to 2007, there has been a:

  • flattening in the rate of retirement by older individuals,
  • flattening in the rate of educational program enrollment by younger individuals,
  • declining share of the population saying they want a job but not officially counted as unemployed,
  • smaller drag from nonparticipation because of health, and
  • larger drag for reasons other than health among prime-age individuals.
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