… in my recent criticism of Jared Bernstein’s explanation of why he uses the cropped labor-force participation rate of 25-54 year olds (rather than that of all persons 16 years of age and older). I thank Bill Conerly for identifying my error – an error that I’m chagrined to have made, but that I cannot deny and am, therefore, happy to acknowledge. I share below Bill’s e-mail correcting my error.
I almost always agree with you, and not with Jared Bernstein, but …
Labor force participation varies by age and sex. Here’s men in 2019:
Imagine that for every age and sex, labor force participation was steady over time. Suppose the baby boom generation was causing a greater proportion of the population to be in older age brackets. The 16+ participation rate would trend downward because of the greater weight given to us older folks.
Bernstein’s look at ages 25-54 is a simple attempt to account for that. There is not a lot of age-related variation in that age range, but there is some.
I have spent a lot of time on demographics of the labor force, and I (like many others) calculate an age-adjusted labor force participation rate; this is what the rate would be if the underlying population was not changing.
I have not looked at the monthly data, and this chart of annual data only goes through 2022. Maybe it has fully recovered.
High labor force participation is what you would expect in the early years of excessive stimulus, before people figure out that inflation makes nominal wage offers look better than they really are.
Other than this quibble, I enjoy Café Hayek; read it daily.