Declining Labor Force Attachment and Downward Trends in Unemployment and Participation

By:

Federal Reserve Board

Format:

Paperback / softback

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Description

The US labor market witnessed two apparently unrelated secular movements in the last 30 years: a decline in unemployment between the early 1980s and the early 2000s, and a decline in participation since the early 2000s. Using CPS micro data and a stock flow accounting framework, we show that a substantial, and hitherto unnoticed, factor behind both trends is a decline in the share of nonparticipants who are at the margin of participation. A lower share of marginal nonparticipants implies a lower unemployment rate, because marginal nonparticipants enter the labor force mostly through unemployment, while other nonparticipants enter the labor force mostly through employment.

Release date NZ

November 14th, 2014

Author

Federal Reserve Board

Audience

General (US: Trade)

Pages

Dimensions

216x279x1

ISBN-13

9781503223684

Product ID

37727511

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