Employment growth and labor force participation: how many jobs are enough?

Public concerns about the “jobless” recovery following the 2001 recession have centered on whether enough jobs will be created for those who want to work. A more pressing question, however, may be how many jobs are needed to sustain desired growth in overall economic output. ; This article provides an analysis of just how many jobs are needed to keep unemployment in check and considers whether the current rate of job creation is enough to fuel optimal gross domestic product growth. The author examines the decline in the labor force participation rate that has occurred since the late 1990s. Part of the decline in the rate is likely a response to fewer job opportunities as a result of the recession. She also notes, however, that the decline suggests other, noncyclical factors may be at play and are likely to be compounded by baby boomers entering retirement age. The author discusses the pros and cons of some options for increasing the flow of workers into the labor force, including raising the retirement age, increasing immigration, and offshore outsourcing. ; While the current rate of job creation should be able to sustain the expected labor force growth for the near term, she concludes, it is not clear that this rate can sustain a desirable rate of economic growth in the long run. Any of the options policymakers have for affecting this trend of slower labor force growth will take time to implement and adjust to, suggesting that serious discussions of these options’ respective merits should begin now.Employment ; Economic development

Growing part-time employment among workers with disabilities: marginalization or opportunity?

Even though part-time jobs offer lower pay, fewer benefits, and less stability, voluntary part-time employment among disabled workers has increased over the past twenty years even as part-time work has declined among nondisabled workers. Does this trend signal that part-time work has become more attractive to disabled workers, or does it mean that disabled workers are being pushed to the fringe in the workforce? ; This article attempts to answer these questions by looking at the part-time employment experience of disabled workers since 1984. Using data from the Current Population Survey, the author first examines how the incidence and nature of part-time jobs among workers with disabilities have changed over time compared with the experiences of nondisabled workers. Second, she analyzes U.S. Labor Department job descriptions for a broad range of occupations to see how the qualitative nature of jobs has changed over time. ; Her analysis indicates that disabled workers are not being marginalized and are finding part-time employment more attractive. One explanation for the latter finding is that employers are increasingly accommodating the needs of disabled workers, offering them part-time jobs that would be available only on a full-time basis to nondisabled workers. Since the data show that the quality of part-time jobs held by disabled workers has not become relatively more attractive, a second, more likely explanation is that policy changes such as extended Medicaid and more generous Social Security Disability Insurance benefits have made part-time employment more financially attractive to disabled workers.

What’s up with the decline in female labor force participation?

This paper determines that the weaker positive pull of education into the labor market and weaker labor market conditions are the observed factors that contributed the most to the decline in the labor force participation rate (LFPR) between 2000 and 2004 among women ages 25–54. As is typical, however, unobserved factors contributed more than any single or combination of observed factors. Furthermore, if the unemployment rate rebounded to its level in 2000, the LFPR would still be 1.4 percentage points lower than it was in 2000.

Decomposing changes in the aggregate labor force participation rate

This paper presents a simple methodology for decomposing changes in the aggregate labor force participation rate (LFPR) over time into demographic group changes in labor force participation behavior and in population share. The purpose is to identify the relative importance of behavioral changes and population changes as driving forces behind changes in the aggregate LFPR.Labor supply

Employment growth and labor force participation: how many jobs are enough?

This paper demonstrates that, because of declining labor force participation rates, the usual estimates of job creation needed to keep unemployment in check are too high. It is estimated that only 98,000 jobs (rather than the usual goal of 150,000 jobs) need to be created per month to absorb the growing labor force. As the population ages, the labor force will grow even more slowly, and the number of jobs that need to be created will decline. This paper explores the potential implication of this decline in labor force growth on total output along with potential sources of replacement labor to fuel desired growth in the gross domestic product (GDP).

Changes in behavioral and characteristic determination of female labor force participation, 1975-2005

For policymakers, identifying the factors contributing to changes in labor force participation over time is important for setting appropriate policy regarding the nation’s productivity. Although the factors contributing to such changes over the past six decades have been well documented, more recent trends in women’s labor force participation beg further scrutiny. ; This article dissects the changes in the labor force participation rate over the past thirty years among women aged twenty-five to fifty-four. Using Current Population Survey data from the Bureau of Labor Statistics, the author focuses especially on the unprecedented 2.7 percentage point decline in women’s participation rate between 2000 and 2005. While changes in the observed behavior of educated women and in characteristics such as the number of young children have contributed to the decline, the results suggest that the largest contributors have been unobserved changes. From a policy perspective, the presence of unobservables is not very satisfying or informative. Nonetheless, the large role of unobservables in determining labor force participation rates suggests that a rebound to participation rates seen in 2000 is not obviously forthcoming or likely to be easily predictable. The next step in studying these trends, the author believes, is further investigation of how labor force participation decisions are made in a family context and how these decisions have changed over time. ; From a policy perspective, the presence of unobservables is not very satisfying or informative. Nonetheless, the large role of unobservables in determining labor force participation rates suggests that a rebound to participation rates seen in 2000 is not obviously forthcoming or likely to be easily predictable. The next step in studying these trends, the author believes, is further investigation of how labor force participation decisions are made in a family context and how these decisions have changed over time.Women - Employment

Changes in the aggregate labor force participation rate

This paper presents a simple methodology for decomposing changes in the aggregate labor force participation rate (LFPR) into demographic group changes in both participation behavior and population shares. Changes in population shares dominated behavioral changes in the historical evolution of the aggregate LFPR

Urban Welfare-to-Work Transitions in the 1990s: Patterns in Six Urban Areas

This report focuses on patterns of welfare use and employment for welfare leavers for central counties in each of six metropolitan areas

Assessing the Welfare Impact of the 2001 Tax Reform on Dual-earner Families

The welfare impact of the 2001 income tax reform is assessed across dual-earner families with different characteristics. A household labor supply model is estimated to account for variable behavioral responses by family type. It was found that while higher education families received a larger share of the welfare gain generated from lower marginal tax rates, it was the lower education families that provided the bulk of the additional labor supply motivated by the tax reform. Differing welfare gains across families with different numbers of children were also found, highlighting the importance of allowing responses to vary across family characteristics when assessing the welfare impact of a policy change. Working Paper 07-3

Decomposing the education wage gap: everything but the kitchen sink

The authors use a multitude of data sources to provide a comprehensive, multidimensional decomposition of wages across both time and educational status. Their results confirm the importance of investments in and use of technology, which has been the focus of most of the previous literature. The authors also show that demand and supply factors played very different roles in the growing wage gaps of the 1980s and 1990s.Education - Economic aspects ; Wages ; Education