Tag Archives: labor force participation rate

Changes in Workforce Participation Composition Perplexing

There are many indicators of economic health, but perhaps none as perplexing to economists in recent years as the “labor force participation rate.” This rate measures the percentage of the available population which is either working or looking for work. The general purpose of the statistic is to answer the question, “of the people who could work, what percentage of them are in the workforce?” The definition of “available” has many conditions – one can’t be in prison nor the military, nor be on disability and must be above the age of 16.

For reasons not yet clear, the labor force participation rate has been experiencing a significant decline in recent years. The U.S. Bureau of Labor Statistics (BLS) estimates the overall participation rate has decreased from 66 percent in 2004 to only 62.9 percent in 2014; a change that amounts to nearly eight million people who opted out of work.

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