Note: This commentary has been updated with the latest numbers from last week’s Employment Report.
The Labor Force Participation Rate (LFPR) is a simple computation: You take the Civilian Labor Force (people age 16 and over employed or seeking employment) and divide it by the Civilian Noninstitutional Population (those 16 and over not in the military and or committed to an institution). The result is the participation rate expressed as a percent.
The first chart below splits up the LFPR since 1948 in two ways: by age and by gender. For the former, have the 25-64 age cohorts to represent what we traditionally think of as the “productive” (pre-retirement age) workforce. The BLS has data for ages 16 and over, but the historical trend toward college attendance has been quite dramatic over this timeframe. So let’s use age 25 as the lower boundary to reduce the college-years skew.
Note the squiggly lines for the productive years and jumbled dots for the older cohorts. These result from the use of non-seasonally adjusted data. The BLS does have seasonally adjusted data for many cohorts, but not the older ones, so the chart uses the non-adjusted numbers for consistency.
The next chart eliminates the squiggles with a simple but effective seasonal adjustment suitable for long timeframes, a 12-month moving average. There are some callouts to quantify the data in 1948 and the present.
It doesn’t take Ph.D. in sociology to recognize some significant changes in the chart above. The growth of women in the workplace, the solid red line, was a major trend. The financial advantage of two income households was boosted by Title VII of the Civil Rights Act of 1964, which prohibits discrimination by race, color, religion, sex, or national origin. The Age Discrimination in Employment Act of 1967 helped to stabilize the decline in the 65 and over participation rate, at least until the 11-month recession that started in December 1969.
