Data and code for "Explaining the Decline in the U.S. Employment-to-Population Ratio: A Review of the Evidence"

Principal Investigator(s): View help for Principal Investigator(s) Katharine Abraham, University of Maryland-College Park; Melissa Kearney, University of Maryland-College Park

Version: View help for Version V1

Name	File Type	Size	Last Modified
Data			05/14/2020 09:05:PM
Output			06/28/2020 05:01:PM
Programs			05/14/2020 09:02:PM

Project Description

Summary: This paper first documents trends in employment rates and then reviews what is known about the various factors that have been proposed to explain the decline in the overall employment-to-population ratio between 1999 and 2018. Population aging has had a large effect on the overall employment rate over this period, but within-age-group declines in employment among young and prime age adults also have played a central role. Among the factors whose effects the evidence allows us to quantify, labor demand factors, in particular increased import competition from China and the penetration of robots into the labor market, are the most important drivers of observed within-group declines in employment. Labor supply factors, most notably increased participation in disability insurance programs, have played a less important but not inconsequential role. Increases in the real value of state minimum wages and in the share of individuals with prison records also have contributed modestly to the decline in the aggregate employment rate. In addition to the factors whose effects we roughly quantify, we identify a set of potentially important factors about which the evidence does not yet allow us to draw clear conclusions. These include the challenges associated with arranging child care, improvements in leisure technology, changing social norms, increased use of opioids, the growth in occupational licensing, and declining labor market fluidity. Our evidence-driven ranking of factors should be useful for guiding future discussions about the sources of decline in the aggregate employment-to-population ratio and consequently the likely efficacy of alternative policy approaches to increasing employment rates.

Scope of Project

Subject Terms: Employment rate; Labor force participation rate; Employment to population ratio

JEL Classification:
J01 Labor Economics: General
J21 Labor Force and Employment, Size, and Structure

Data Type(s): aggregate data; program source code; survey data

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Published Versions

V1 [2020-09-02]

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