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January 26, 2007

The falling labor force

The percentage of people of working ages who either have jobs or are looking for jobs has been falling steadily for 40 years. N.C. State University economist Mike Walden explains what's happening.

"A couple things," says Dr. Walden, a professor in the College of Agriculture and Life Sciences. "One, the percentage of women who are of working ages has been going up, as I think is well-known, over this 40-year period. But the percentage of men who are of working age who are working has gone down. And many economists think that one is simply canceling the other -- that there has been some shift in household responsibilities. If a wife goes to work, the husband may cut back a little bit in order to take care of children, et cetera.

"So that's not really a big surprise," he says. "That's really, again, a shift between the genders. But I think where the real surprise is and where the real change has been is among teen-age workers -- big drop in labor force participation among teen-age workers.

"Several reasons here: Teenagers or young people are staying in school longer. More of them are going to college. Many of them are in a better financial position once they are in school, in college, so they have less need to work. And many of the types of jobs that teen-agers or college kids used to take are now being supplied by other workers, particularly immigrants.

"So for all of these reasons," Walden concludes, "I think the real story here is the decline of labor-force participation by teen-age workers."

Posted by deeshore at January 26, 2007 08:00 AM