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Interpreting the recent decline in labor force participation

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  • Willem Van Zandweghe

Abstract

At the turn of the 21st century, labor force participation in the United States reversed its decades-long increase and started trending lower. In the four years since the start of the recent recession, the labor force participation rate experienced a far bigger drop than in any previous four-year period. ; To disentangle the roles of long-term trend factors?such as demographic shifts?and the recession in the recent drop in participation, Van Zandweghe examines a variety of evidence, including data on demographic shifts, labor market flows, gender differences, and the effects of long-term unemployment. ; The evidence indicates that long-term trend factors account for about half of the recent decline in labor force participation, with the recession accounting for the other half.

Suggested Citation

  • Willem Van Zandweghe, 2012. "Interpreting the recent decline in labor force participation," Economic Review, Federal Reserve Bank of Kansas City, vol. 97(Q I), pages 5-34.
    • Handle: RePEc:fip:fedker:y:2012:i:qi:p:5-34:n:v.97no.1
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