Emails, Steven Haugen, economist, Division of Labor Force Statistics, U.S. Bureau of Labor Statistics, Sept. 25 and 26, 2013
Our Dallas Regional Office forwarded to us your recent inquiry regarding a statement made about the number of people who have given up looking for work. Our measures of those marginally attached to the labor force, and the related subset referred to as discouraged workers, often are used to gauge the number of people who have given up looking for work (as they represent persons who want a job, have looked for work in the past year, but are not currently looking). However, it is possible that the statement was more generally referring to the downward trend in the labor force participation rate—that is, the proportion of the population either working or actively looking for work.
It is true that the labor force participation rate fell steeply during the recent recession, and it has continued to decline during this recovery. The latest monthly figures suggest that the participation rate has continued to drift down over the past year.
There has been a great deal of research into the underlying causes behind this decline. While available survey data generally don’t enable us to precisely answer the question as to whether all of the decline in participation can be ascribed to persons who have abandoned their job search, much of the research has suggested that weak labor market conditions have played a role, as have longer-term demographic factors, such as retiring baby boomers.
I’m including a link to a recent paper from the Federal Reserve Bank of Boston that has looked into the matter:
This is just one example. A quick search will lead you to many other papers on the subject; I think most will point to a mix of cyclical factors (e.g., people leaving or not entering the labor force because of a weak job market) and demographic factors (e.g., an aging population) behind the recent decline in labor force participation.
I hope this is helpful.
Division of Labor Force Statistics
Bureau of Labor Statistics
3:57 pm, Sept. 26, 2013
Discouraged workers are a subset of “persons marginally attached to the labor force.” Neither of these data series are available on a seasonally adjusted basis.
Persons marginally attached to the labor force want a job, have evidenced some job attachment by virtue of job search in the prior year, are available for work during the survey reference week, but had not looked for work in the 4 weeks ending with the survey reference week. (Had they actively looked for work, they’d be classified as unemployed.) Persons marginally attached to the labor force are not currently looking for work for a wide range of reasons, some not job market related per se. However, discouraged workers, part of the marginally attached, have given a job market related reason for not currently looking for work.