Where Have All the Workers Gone?: An Inquiry into the Decline of the U.S. Labor Force Participation Rate

Abstract

The U.S. labor force participation rate has declined since 2007, primarily because of population aging and ongoing trends that preceded the Great Recession. The labor force participation rate has evolved differently, and for different reasons, across demographic groups. A rise in school enrollment has largely offset declining labor force participation for young workers since the 1990s. Labor force participation has been declining for prime age men for decades, and about half of prime age men who are not in the labor force may have a serious health condition that is a barrier to working. Nearly half of prime age men who are not in the labor force take pain medication on any given day; and in nearly two-thirds of these cases, they take prescription pain medication. Labor force participation has fallen more in U.S. counties where relatively more opioid pain medication is prescribed, causing the problem of depressed labor force participation and the opioid crisis to become intertwined. The labor force participation rate has stopped rising for cohorts of women born after 1960. Prime age men who are out of the labor force report that they experience notably low levels of emotional well-being throughout their days, and that they derive relatively little meaning from their daily activities. Employed women and women not in the labor force, by contrast, report similar levels of subjective well-being; but women not in the labor force who cite a reason other than “home responsibilities” as their main reason report notably low levels of emotional well-being. During the past decade, retirements have increased by about the same amount as aggregate labor force participation has

Unhappiness and Pain in Modern America: A Review Essay, and Further Evidence, on Carol Graham’s Happiness for All?

“…This is probably not known to many economists --or perhaps scholars generally --but it has been described in recent work by Krueger (2017) and has received publicity through related research by scholars such as Case and Deaton (2015). There is also new work showing that recessions have historically increased the demand for pain medication (Carpenter et al 2017).…”

The US Opioid Epidemic and Prime‐Age Labor Force Participation

“…A recent survey finds that taking pain medication and, presumably, physical pain, is highly prevalent among prime‐age individuals not in the labor force (Krueger ). Prescription pain medication is taken regularly by 44 percent of the prime‐age men not in the labor force, compared with 20 percent of those employed, and Krueger estimates that 40 percent of those men not participating in the labor force report that the pain they experience prevents them from obtaining a job for which they would be qualified.…”

“…Beyond painkillers, several studies have concluded that the opioid epidemic, in particular, is related to declining prime‐age labor force participation, particularly for men (Mericle ). Krueger () explores the relationship between prescription opioids and participation rates for prime‐age men and women using 2015 county‐level opioid prescription rates and county‐level labor force data from 1999 to 2001 and 2014 to 2016. He finds that prescription opioid consumption can account for 20 percent of the decline in participation for men and 25 percent of the decline for women.…”

A second opinion: diagnosis and prescription of the American case

“… Family: class differences have widened in divorce and children living without two parents (Fischer and Hout ; Rackin and Gibson‐Davis ). Men’s labour force participation: Krueger (: Figure 5). Alcohol: problem drinking in the early 2000s: Grant et al ().…”