Article

December 2013

Labor force projections to 2022: the labor force participation rate continues to fall

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Table 1. Civilian labor force, by age, gender, and ethnicity, 1992, 2002, 2012, and projected 2022 (numbers in thousands)
GroupLevelChangePercent changePercent distributionAnnual growth rate (percent)
19922002201220221992 –20022002 –20122012 –20221992 –20022002 –20122012 –202219922002201220221992 –20022002 –20122012 –2022
Total, 16 years and older128,105144,863154,975163,45016,75810,1128,47513.17.05.5100.0100.0100.0100.01.20.70.5
Age, years:                 

16 to 24

21,61722,36621,28518,462749−1,081−2,8233.5−4.8-13.316.915.413.711.3.3−.5−1.4

25 to 54

91,429101,720101,253103,19510,292−4671,94211.3−.51.971.470.265.363.11.1.0.2

55 and older

15,06020,77732,43741,7935,71711,6609,35638.056.128.811.814.320.925.63.34.62.6
Gender:                 

Men

69,96477,50082,32786,9137,5364,8274,58610.86.25.654.653.553.153.21.0.6.5

Women

58,14167,36472,64876,5379,2235,2843,88915.97.85.445.446.546.946.81.5.8.5
Race:                 

White

108,837120,150123,684126,92311,3133,5343,23910.42.92.685.082.979.877.71.0.3.3

Black

14,16216,56518,40020,2472,4031,8351,84717.011.110.011.111.411.912.41.61.11.0

Asian

5,1066,6048,18810,1351,4981,5841,94729.324.023.84.04.65.36.22.62.22.2

All other groups(1)

-1,5444,7036,1453,159(2)1,442204.6(2)30.71.13.03.811.8(2)2.7
Ethnicity:                 

Hispanic origin

11,33817,94324,39131,1796,6056,4486,78858.335.927.88.912.415.719.14.73.12.5

Other than Hispanic origin

116,767126,920130,584132,27110,1533,6641,6878.72.91.391.187.684.380.9.8.3.1

White non-Hispanic

98,724103,349101,89299,4314,625−1,457−2,4614.7-1.4−2.477.171.365.760.8.5−.1−.2
Age of baby boomers28 to 4638 to 5648 to 6658 to 76

Notes:

(1) The “all other groups" category includes (1) those classified as being of multiple racial origin and (2) the racial categories of (2a) American Indian and Alaska Native and (2b) Native Hawaiian and Other Pacific Islanders.

(2) Number shown is based on calculated, rather than estimated, 2002 figure.

Note: Dash indicates no data collected for category. Details may not sum to totals because of rounding.

Source: U.S. Bureau of Labor Statistics.

Since the CPS started keeping track of the labor force participation rate (i.e., the proportion of the civilian noninstitutional population that is in the labor force) in 1948, the rate has trended upward until the late 1990s, when it peaked, and has declined since then. After increasing in the 1970s, 1980s, and 1990s, the participation rate reached and maintained an all-time high of 67.1 percent over the 1997–2000 period. Then, counter to its behavior in previous economic downturns, in which it would soon return to its prerecession level, the labor force participation rate continued to decline following the 2001 recession, after which it held steady at about 66.0 percent from 2004 to 2008. Subsequently, during the 2007–2009 recession, the overall labor force participation rate fell by 0.6 percentage point, from 66.0 percent during 2007–2008 to 65.4 percent in 2009. Then, in 2010, the rate came in at 64.7 percent, a further decrease of 0.7 percentage point. By 2012, the participation rate had fallen another 1.0 percentage point, to 63.7 percent. Of note is the fact that the drop in the labor force participation rate was just 0.6 percentage point during the 2007–2009 economic downturn whereas, between 2009 and 2012, since the end of the recession, the rate declined by another 1.7 percentage points. A major factor responsible for this downward pressure on the overall labor force participation rate is the aging of the baby-boom generation. (See figure 1.)

By multiplying the projected labor force participation rates of each group by the Census Bureau’s most recent population projections, the labor supply for each category and for the economy as a whole is projected. The main role of BLS in projecting the labor force is to estimate future participation rates. In what follows, past population trends, in addition to population projections of all the different gender, age, race, and ethnic categories, are examined first. Next, past trends in the labor force participation rates and projected rates for the 2012–2022 period are discussed. Then the projected level and growth rate of the labor force over the next decade is analyzed, and finally, various aspects of the aging labor force are studied.

Civilian noninstitutional population

Changes in the demographic composition of the population and different growth trends in the population reflect births, deaths, and migration to and from the United States. Every 2 years, the Census Bureau carries out projections of the resident population of the United States. The Census Bureau’s population projections are based on alternative assumptions regarding future fertility, life expectancy, and net international migration. The population projections in this article are the middle-series projections of the resident population that were released on December 2012 and are the first set of projections based on the 2010 census. The middle series provides projections of the population for the years 2012 to 2060.4 Because the people who will be joining the labor force by 2022 are already born, the projection of fertility is not that important for the 2012–2022 labor force projections. Even so, according to the latest Census Bureau projections based on data from the Centers for Disease Control and Prevention, the U.S. total fertility rate (roughly, the average number of births per woman over the woman’s lifetime)5 was 1.931 births per 1,000 women in 2010, a 4-percent decline from the 2009 rate, and the number of births has declined for nearly all race and Hispanic groups.6 The mortality rate also is projected to have very gradual changes from one year to the other, and these insignificant changes can be disregarded for the 2012–2022 timeframe as well. The Census Bureau projects falling mortality rates and increasing life expectancies for the U.S. population; in addition, it expects the mortality rates of second-generation immigrants to converge to that of the general population in the future. In general, changes in mortality rates and fertility rates tend to be very gradual.7 The main component of population changeand the greatest uncertainty in population projections—has been, and will continue to be, immigration, which has a paramount impact on the size, composition, and growth rate of both the population and the labor force. In the Census Bureau’s latest projections of the resident population of the United States, immigration has decreased because of the impact of the latest recession and because the fertility rate of the immigrant population has also decreased and converged to that of the general population.8

Notes

4 The Census Bureau produces projections of the resident U.S. population by age, gender, race, and Hispanic origin. The 2012 National Projections are based on the 2010 Census and provide projections of the population for the period from July 1, 2012, to July 1, 2060. The projections were produced with the use of a cohort-component method and are based on assumptions about future births, future deaths, and net international migration. The 2012 National Projections include a main series and three alternative series. These four series provide results for different assumptions of net international migration. The main series, referred to as the middle series, was released in December 2012. (See Population projections: 2012.)

5 For a more precise definition of total fertility rate, see Sally C. Clarke and Stephanie J. Ventura, “Birth and fertility rates for states: United States, 1990,” in Vital and Health Statistics, series 21: Data on natality, marriage, and divorce, no. 52 (U.S. Department of Health and Human Services, December 1994), http://www.cdc.gov/nchs/data/series/sr_21/sr21_052.pdf.

6 See Joyce A. Martin, Brady E. Hamilton, Stephanie J. Ventura, Michelle J. K. Osterman, Elizabeth C. Wilson, and T. J. Mathews, “Births: final data for 2010,” National Vital Statistics Reports, August 28, 2012, http://www.cdc.gov/nchs/data/nvsr/nvsr61/nvsr61_01.pdf.

7 See Arialdi M. Miniño and Sherry L. Murphy, Death in the United States, 2010, NCHS Data Brief no. 99 (Centers for Disease Control and Prevention, National Center for Health Statistics, July 2012).

8 “The Hispanic Population: 2010,” Census Briefs (U.S. Census Bureau, May 2011), http://www.census.gov/prod/cen2010/briefs/c2010br-04.pdf.

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About the Author

Mitra Toossi
toossi.mitra@bls.gov

Mitra Toossi is an economist in the Division of Industry Employment Projections, Office of Occupational Statistics and Employment Projections, Bureau of Labor Statistics.