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Why Is Prime-Age Labor Force Participation So High?

Author

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  • Deepika Baskar Prabhakar
  • Robert G. Valletta

Abstract

The labor force participation (LFP) rate for prime-age workers surged from early 2021 through early 2023, especially for women. This helped reduce the large shortfall of available workers relative to available jobs that emerged during the recovery from the pandemic. Analysis of state labor markets indicates that the cyclical response of prime-age LFP was much more pronounced during the two most recent business cycles than in prior ones. This state-level relationship weakened in 2023, however, suggesting that the cyclical gains in prime-age LFP are winding down.

Suggested Citation

  • Deepika Baskar Prabhakar & Robert G. Valletta, 2024. "Why Is Prime-Age Labor Force Participation So High?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2024(03), pages 1-6, January.
    • Handle: RePEc:fip:fedfel:97727
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    References listed on IDEAS

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    1. Christopher J. Erceg & Andrew T. Levin, 2014. "Labor Force Participation and Monetary Policy in the Wake of the Great Recession," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(S2), pages 3-49, October.
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    Cited by:

    1. Brandon E. Miskanic & Nicolas Petrosky-Nadeau & Cindy Zhao, 2024. "To Retire or Keep Working after a Pandemic?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2024(08), pages 1-5, March.
    2. Angela Guo & Pawel Krolikowski, 2024. "Disability, Immigration, and Postpandemic Labor Supply," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2024(05), pages 1-8, March.

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