The Decline in the U.S. Labor Force Participation Rate: A Literature Review

Pérez‐Arce, Francisco; Prados, María José

doi:10.1111/joes.12402

Cited by 11 publications

(4 citation statements)

References 127 publications

(166 reference statements)

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“… 40 Currently, the rates of labor force participation and employment are insufficient, and much of the labor force remains unemployed. 41 In fact, the elderly population is also the main driving force of the growth in social welfare expenditure including public health and social security. 42 It is concerning that social welfare consumes scarce resources for unproductive social services, and thus, economic development is bound to be stifled in the long run.…”

Section: Discussionmentioning

confidence: 99%

Economic Implications of Health Care Burden for Elderly Population

Tang

et al. 2022

INQUIRY

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The implications of population aging for economic growth is not only the shrinking working-age population, but also the increasing health care burden of the elderly population. It is difficult to explain clearly the relationship between a country’s aging population and its economy without considering health effects. Based on the Solow economic growth model, the aims of this study are to estimate the economic effects of the health care burden for elderly population, and to access whether reducing effective labor input for economic production. The analysis employs a set of econometric approaches including fixed effects, generalized method of moments, instrumental variable, and mediation regression analyses using a multinational multi-database covering the years 2000-2019. The empirical evidence indicates that the health care burden was negatively correlated with economic growth during the study period, with every 1% increase in the health care burden leading to a 0.083% decrease in the GDP growth rate. The results of heterogeneity analysis and mediating analysis further confirmed that worsening health in the elderly population could be associated with the deceleration in economic development through the indirect pathway that lowering the employment rate of working-age population. This study provides new empirical evidence on the economic impact of population aging that the poor health of elderly population can be one critical factor of limiting economic growth, for the reason the labor inputs in household production are likely crowded out by family caregiving.

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Section: Discussionmentioning

confidence: 99%

Economic Implications of Health Care Burden for Elderly Population

Tang

et al. 2022

INQUIRY

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“…However, labor force participation has not evolved favorably in the United States in the recent past. After peaking around the year 2000 at about 67.3 percent (age 16 and older), the U.S. LFPR declined until about 2015 and has remained stable at about 63 percent since then (Perez-Arce & Prados, 2021 ). During the same period, the LFPR of most other economically advanced countries increased (OECD, 2021 ).…”

Section: Introductionmentioning

confidence: 99%

“…Aaronson et al ( 2014 ) and Krueger ( 2017 ) suggest that about half of the decline in the U.S. is due to long-running demographic changes. In their summary of the literature, Perez-Arce and Prados ( 2021 ) argue that this could even amount to two-thirds.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Health and Education on Labor Force Participation in Aging Societies: Projections for the United States and Germany from Dynamic Microsimulations

Böheim

Horvath

Leoni

et al. 2023

Popul Res Policy Rev

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We project the labor force in the United States to 2060 and contrast the outcomes with comparative projections for Germany. In both countries, the population will age, but the demographic dynamics are fundamentally different. According to our dynamic microsimulations, the labor force in the U.S. will increase by 17 percent between 2020 and 2060 (about 29 million workers) despite population aging. In contrast, the labor force in Germany will decline by 11 percent (about 4.5 million workers). Our baseline projections indicate that an expansion of education will increase the labor force by about 3 million persons in the United States and about half a million persons in Germany by 2060. In several what-if scenarios, we examine the effects of further expanding education and of removing health barriers on labor force participation. Higher educational attainment among those with currently low education has the largest impact on labor force participation, relative to the additional years of schooling. However, health improvements and the labor market integration of people with health limitations suggest a larger increase in labor force participation rates. Using Sweden as a benchmark, we show that reducing the health participation gap would increase the U.S. labor force by as much as 13 million people in 2060 (+6.8 percent compared to our baseline).

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“…), 2005periods, i.e. -2017 in Balliester Reis and Elsheikhi (2018in Perez-Arce and Prados (2021, while our review covers thirty-three years which allows us to capture a more complete picture of the effects for each of the technologies examined. Third, in contrast to Ugur and Mitra (2017) who synthesized the evidence on less developed countries, we focused our review on developed economies aiming to capture the impact of technological change at the frontier.…”

Section: Introductionmentioning

confidence: 99%

Technology and jobs: A systematic literature review

Hötte¹,

Somers²,

Theodorakopoulos³

2022

Preprint

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Does technological change destroy or create jobs? New technologies may replace human workers, but can simultaneously create jobs if workers are needed to use these technologies or if new economic activities emerge. Furthermore, technology-driven productivity growth may increase disposable income, stimulating a demand-induced expansion of employment. To synthesize the existing knowledge on this question, we systematically review the empirical literature on the past four decades of technological change and its impact on employment, distinguishing between five broad technology categories (ICT, Robots, Innovation, TFP-style, Other). Overall, we find across studies that the labor-displacing effect of technology appears to be more than offset by compensating mechanisms that create or reinstate labor. This holds for most types of technology, suggesting that previous anxieties over widespread technology-driven unemployment lack an empirical base, at least so far. Nevertheless, low-skill, production, and manufacturing workers have been adversely affected by technological change, and effective up-and reskilling strategies should remain at the forefront of policy making along with targeted social support systems.

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The Decline in the U.S. Labor Force Participation Rate: A Literature Review

Cited by 11 publications

References 127 publications

Economic Implications of Health Care Burden for Elderly Population

Economic Implications of Health Care Burden for Elderly Population

The Impact of Health and Education on Labor Force Participation in Aging Societies: Projections for the United States and Germany from Dynamic Microsimulations

Technology and jobs: A systematic literature review

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