snapper,
look at chart 3 again. your point is that the civilian labor force participation rate is trending down. my rebuttal is that pure demographics indicates that it will trend down regardless.
of course the recession has sped up this downward trend. note, however, that the differential has remained relatively steady. what this indicates to me is that the recession forced an early exit out of the job market for aging baby boomers (and to a lesser degree, millenials going back to school vice taking a job). this explains how the unemployment rate has gone down, as well as the lowered civilian labor force participation rate.
in this case, what we'll see is a gradual convergence of the real LFPR and the demographically-adjusted LFPR over time. a relatively short period of time, too, as the economy recovers and this shows up as a lagging indicator function.
it is. but the retirement of the abnormally large baby boomer generation (hence the name...) will mean a reduced level of overall labor force participation over the long-run. that still means millions of new workers, though, because the overall population is still growing-- and thus the US remains the one-eyed king in the land of the blind, so to speak.
Not really helpful to your argument... It shows that actual 'labour participation' or in English the number of people actually working is dropping by more around 1.5% more than can be accounted for by their demographic model.
of course the recession has sped up this downward trend. note, however, that the differential has remained relatively steady. what this indicates to me is that the recession forced an early exit out of the job market for aging baby boomers (and to a lesser degree, millenials going back to school vice taking a job). this explains how the unemployment rate has gone down, as well as the lowered civilian labor force participation rate.
in this case, what we'll see is a gradual convergence of the real LFPR and the demographically-adjusted LFPR over time. a relatively short period of time, too, as the economy recovers and this shows up as a lagging indicator function.
But I thought the US population was rising?
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