U.S. labor participation rate falls behind Europe

by Ryan Streeter on March 26, 2014. Follow Ryan on Twitter.

These charts from Gary Burtless via Patrick Brennan are extraordinary:

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There’s no real consensus on why our labor force participation rates are dropping like they are. Brennan sums it up this way:

With American labor-force-participation level dropping so dramatically, a lot of economists have been asking and debating how much of it can be attributed to demographics and how much to economic weakness: America is getting older, and the rate at which women work isn’t skyrocketing anymore. But prime-age labor-force participation removes the former of those concerns, and we’re still seeing a noticeable drop. The consensus estimates are that something like one-half to two-thirds of the labor-force drop are due to demographics (which still, of course, presents an economic and fiscal problem, even if it it’s inevitable).

Another, more depressing conclusion: The drop in labor-force-participation among prime-age men isn’t so much about continued economic weakness as it is about permanent shifts that have depressed wages (making work less appealing than non-work) and suppressed jobs growth.