Opting out of the labor force and does the unemployment rate still matter?

Transcription

1 Opting out of the labor force and does the unemployment rate still matter? Michael W. Horrigan, Ph.D. Associate Commissioner Office of Employment and Unemployment Statistics March 24, 2018 NAWB Pre-conference Session: Labor Market Data Smart Strategies for Workforce Development 1 U.S. BUREAU OF LABOR STATISTICS bls.gov

2 Opting out of the labor force 2 U.S. BUREAU OF LABOR STATISTICS bls.gov

3 Current Population Survey (Household Survey) Nationally representative monthly survey of about 60,000 eligible households, including data for about 110,000 people Joint effort between BLS and Census Bureau Broadest measure of employment 3 U.S. BUREAU OF LABOR STATISTICS bls.gov

4 CPS Sample Design Universe: Civilian noninstitutional population age 16 and over Frame: list of addresses from 2010 Decennial Census of Population, updated for new housing Mode of collection: in person or phone interviews Voluntary survey, 87% response rate 4 U.S. BUREAU OF LABOR STATISTICS bls.gov

5 CPS Monthly Schedule Sun Mon Tue Wed Thu Fri Sat Survey reference week Survey conducted Release day 5 U.S. BUREAU OF LABOR STATISTICS bls.gov

6 CPS Data Collection rotation schedule 75% overlap month to month 50% overlap year to year Some items asked every month, others only in certain months Outgoing rotation groups 6 U.S. BUREAU OF LABOR STATISTICS bls.gov

7 CPS concepts Civilian noninstitutional population Civilian labor force Not in the labor force Employed Unemployed Do not want a job now Want a job now 7 U.S. BUREAU OF LABOR STATISTICS bls.gov

8 Labor Force Status of Population, 2017 annual averages Unemployed Want a job Employed Not in the labor force Do not want a job 8 U.S. BUREAU OF LABOR STATISTICS bls.gov

9 Population and Labor force, 1969 Men Women Labor force Not in labor force Baby boomers Millions Age Millions 9 U.S. BUREAU OF LABOR STATISTICS bls.gov

10 Population and Labor force, 1989 Men Labor force Women Not in labor force Baby boomers Millions Age Millions 10 U.S. BUREAU OF LABOR STATISTICS bls.gov

11 Population and Labor force, 2009 Men Women Labor force Not in labor force Baby boomers Millions Age Millions 11 U.S. BUREAU OF LABOR STATISTICS bls.gov

12 Population and Labor force, 2016 Baby boomers Men Women Population Labor force Millions Age Millions 12 U.S. BUREAU OF LABOR STATISTICS bls.gov

13 Labor force participation rate Seasonally adjusted, Percent February 2018 Level: Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 13 U.S. BUREAU OF LABOR STATISTICS bls.gov

14 Labor force participation rate Seasonally adjusted, Percent February 2018 Level: Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 14 U.S. BUREAU OF LABOR STATISTICS bls.gov

15 Labor Force Participation: Recent Developments and Future Prospects Stephanie Aaronson, Tomas Cajner, Bruce Fallick, Felix Galbis-Reig, Christopher Smith, and William Wascher Board of Governors of the Federal Reserve System and the Federal Reserve Bank of Cleveland September 2014 Presentation at the Fall 2014 Brookings Panel on Economic Activity 15 U.S. BUREAU OF LABOR STATISTICS bls.gov

16 Labor Force Participation: Recent Developments and Future Prospects The evidence we present in this paper suggests that much of the steep decline in the labor force participation rate since 2007 owes to ongoing structural influences rather than a pronounced cyclical weakness related to the weak state of the labor market. Most prominently, the on-going aging of the baby-boom generation into ages with traditionally lower attachment to the labor force can, by itself account for nearly half of the decline. 16 U.S. BUREAU OF LABOR STATISTICS bls.gov

17 Labor force participation rate of youth by age Seasonally adjusted, Percent to 24 years to 19 years Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 17 U.S. BUREAU OF LABOR STATISTICS bls.gov

18 School enrollment of youth by age October Percent School enrollment rate, years School enrollment rate, years Note: October Supplement. Source: Bureau of Labor Statistics, Current Population Survey. 18 U.S. BUREAU OF LABOR STATISTICS bls.gov

19 Labor force participation by school enrollment, ages 16 to 24 years October Percent Not enrolled in school Enrolled in school Note: October Supplement. Source: Bureau of Labor Statistics, Current Population Survey. 19 U.S. BUREAU OF LABOR STATISTICS bls.gov

20 Labor force participation rates by sex, 55 to 64 years old Not seasonally adjusted, Percent Men, 55 to 64 years Women, 55 to 64 years Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 20 U.S. BUREAU OF LABOR STATISTICS bls.gov

21 Labor force participation rates by sex, 65 years and over Not seasonally adjusted, Percent Women, 65 years and over Men, 65 years and over Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 21 U.S. BUREAU OF LABOR STATISTICS bls.gov

22 Female labor force participation rates, 25 to 54 years old Seasonally adjusted, Percent Women, 25 to 54 years old Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 22 U.S. BUREAU OF LABOR STATISTICS bls.gov

23 Male labor force participation rates, 25 to 54 years old Seasonally adjusted, Percent Men, 25 to 54 years old Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 23 U.S. BUREAU OF LABOR STATISTICS bls.gov

24 Labor force participation rates of men 25 to 54 years old by race and Hispanic or Latino ethnicity Not seasonally adjusted, Nov Percent Hispanic men White men Black men Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 24 U.S. BUREAU OF LABOR STATISTICS bls.gov

25 Labor force participation rates for men 25 years and over Not seasonally adjusted, Percent Bachelor's degree and higher Some college or associate degree High school graduate, no college 50.0 Less than high school diploma Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 25 U.S. BUREAU OF LABOR STATISTICS bls.gov

26 Labor force participation rates of White men 25 to 54 years old by education, annual averages Less than high school diploma High school graduate, no college Some college or associate degree Bachelor's degree or higher Source: Bureau of Labor Statistics, Current Population Survey. 26 U.S. BUREAU OF LABOR STATISTICS bls.gov

27 Labor force participation rates of Black men 25 to 54 years old by education, annual averages Less than high school diploma Source: Bureau of Labor Statistics, Current Population Survey. High school graduate, no college Some college or associate degree Bachelor's degree or higher 27 U.S. BUREAU OF LABOR STATISTICS bls.gov

28 Labor force participation rates of Hispanic men 25 to 54 years old by education, annual averages Less than high school diploma High school graduate, no college Some college or associate degree Bachelor's degree or higher Source: Bureau of Labor Statistics, Current Population Survey. 28 U.S. BUREAU OF LABOR STATISTICS bls.gov

29 Longitudinal data perspective The National Longitudinal Surveys program has been following two cohorts of youth since early ages one starting in 1979 and the other in The cohort that began in 1979 (NLSY79) was ages on December 31, 1978 and the cohort that began in 1997 (NLSY97) was ages on December 31, These cohorts are interviewed every year or every two years and a complete event history of their labor force participation (employed, unemployed, out of the labor force) is recorded for every week of their lives. 29 U.S. BUREAU OF LABOR STATISTICS bls.gov

30 Longitudinal data perspective These very unique data sets allow us to examine the labor force participation of these two cohorts at the same exact ages in this case, the maximum sample overlap is for ages The following slides will examine the proportion of each cohort that is employed, unemployed and out of the labor force for each single week between and including the ages The NLSY79 cohort were ages between 1983 and 1996 The NLSY97 cohort were ages between 2006 and U.S. BUREAU OF LABOR STATISTICS bls.gov

31 Proportion of the men employed each week, ages 25-30, for the NLSY79 and the NLSY97 cohorts Percent 100.0% NLSY79 NLSY % 90.0% 85.0% 80.0% 75.0% 70.0% Note: NLSY79 cohort were ages in NLSY97 cohort were ages in U.S. BUREAU OF LABOR STATISTICS bls.gov

32 Proportion of the men unemployed each week, ages 25-30, for the NLSY79 and the NLSY97 cohorts Percent 10.0% 9.0% NLSY79 NLSY97 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Note: NLSY79 cohort were ages in NLSY97 cohort were ages in U.S. BUREAU OF LABOR STATISTICS bls.gov

33 Proportion of the men out of the labor force each week, ages 25-30, for the NLSY79 and the NLSY97 cohorts Percent 20.0% 18.0% NLSY79 NLSY % 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Note: NLSY79 cohort were ages in NLSY97 cohort were ages in U.S. BUREAU OF LABOR STATISTICS bls.gov

34 Does the unemployment rate matter? 34 U.S. BUREAU OF LABOR STATISTICS bls.gov

35 Does the unemployment rate matter? Nick Wells, CNBC, February 3, 2017 The national unemployment rate rose slightly to 4.8 percent in January, the Labor Department announced Friday. But relying on that one headline number as an indicator of the economy overall ignores important information just below the surface. Economists look past the official unemployment rate that 4.8 percent figure, also known as the U-3 to other metrics that give their own view of jobs in the country. 35 U.S. BUREAU OF LABOR STATISTICS bls.gov

36 Unemployment Includes people who: Did NOT work during the reference week AND were available for work AND actively searched for work during the prior 4 weeks Also includes people on temporary layoff who may or may not have searched for work 36 U.S. BUREAU OF LABOR STATISTICS bls.gov

37 Unemployment rate Seasonally adjusted, Percent February 2018 Level: Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 37 U.S. BUREAU OF LABOR STATISTICS bls.gov

38 Duration of unemployment Seasonally adjusted, In thousands 7,000 6,000 5, weeks and over 4,000 3,000 Less than 5 weeks 2,000 1,000 5 to 14 weeks 15 to 26 weeks Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 38 U.S. BUREAU OF LABOR STATISTICS bls.gov

39 Long-term unemployed as a percent of total unemployed Seasonally adjusted, Percent Percent unemployed 27 weeks and over February 2018 Level: Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 39 U.S. BUREAU OF LABOR STATISTICS bls.gov

40 Not in the Labor Force: neither working nor looking for work Want a job Marginally attached Discouraged worker Other marginally attached Other s who want a job Do not want a job 40 U.S. BUREAU OF LABOR STATISTICS bls.gov

41 Marginally Attached to the Labor Force Want and are available for work AND worked or looked for work in past 12 months BUT are not currently looking for work Discouraged workers subset of the marginally attached who believe: No jobs are available for them They don t qualify for the available jobs 41 U.S. BUREAU OF LABOR STATISTICS bls.gov

42 People not in the labor force by desire and availability for work (2017 annual averages) Thousands Percent Total not in the labor force 94, People who do not want a job now 89, People who currently want a job 5, Marginally attached (searched for work within past 12 months and available to work now) Reasons not currently looking: Discouragement over job prospects 1, Reasons other than discouragement 1, U.S. BUREAU OF LABOR STATISTICS bls.gov

43 Persons not in the labor force who want a job Seasonally adjusted, In thousands 8,000 7,000 6,000 5,000 4,000 February 2018 Level: 5.1 million 3,000 2,000 1, Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 43 U.S. BUREAU OF LABOR STATISTICS bls.gov

44 Persons not in the labor force, selected indicators Not seasonally adjusted, In thousands 3,000 2,500 Marginally attached 2,000 1,500 1, Discouraged workers Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 44 U.S. BUREAU OF LABOR STATISTICS bls.gov

45 Part-time Workers Worked 1-34 hours Usual hours and actual hours at work Reasons: Economic reasons (involuntary) Slack work Couldn t find full time Seasonal decline in demand Noneconomic reasons (voluntary) Child care problems Own health or disability Other family or personal obligations Others 45 U.S. BUREAU OF LABOR STATISTICS bls.gov

46 Employed part time for economic reasons Seasonally adjusted, In thousands 10,000 9,000 8,000 7,000 6,000 Part time for economic reasons, total 5,000 4,000 Slack work 3,000 2,000 1,000 Could only find parttime work Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 46 U.S. BUREAU OF LABOR STATISTICS bls.gov

47 Labor Underutilization Underemployment Generally people whose labor and/or skills are underutilized in their jobs Not officially defined concept in CPS Part time for economic reasons CPS concept Overqualified workers Not a CPS concept Range of alternative measures of labor underutilization 47 U.S. BUREAU OF LABOR STATISTICS bls.gov

48 Alternative measures of labor underutilization U-1 Unemployed 15 weeks or longer: labor force U-2 Job losers & completed temp jobs: labor force U-3 Unemployed: labor force (official unemployment rate) U-4 Unemployed + discouraged workers: labor force + discouraged workers U-5 Unemployed + discouraged workers + other marginally attached: labor force + all marginally attached U-6 Unemployed + all marginally attached + employed part time for economic reasons: labor force + all marginally attached 48 U.S. BUREAU OF LABOR STATISTICS bls.gov

49 Alternative measures of labor underutilization Seasonally adjusted, Percent U U U-5 U-6 U-4 U-4 U U-3 Unemployment rate U-1 U U-2 U-1 Note: Shaded area represents recession as determined by the National Bureau of Economic Research (NBER). Source: Bureau of Labor Statistics, Current Population Survey. 49 U.S. BUREAU OF LABOR STATISTICS bls.gov

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54 Over-the-year Total Covered Employment Change for the United States: September U.S. BUREAU OF LABOR STATISTICS bls.gov

55 Over-the-year Total Covered Employment Change for Pennsylvania: September U.S. BUREAU OF LABOR STATISTICS bls.gov