As Low-Skilled Jobs Disappear, Men Drop Out of the Workforce
White House study looks at the causes of falling participation rates among men
By Jeffrey Sparshott
Why aren’t men in the prime of their lives working more?
Working-age males have been sitting on the sidelines in greater numbers for decades, a trend that accelerated during the latest recession and has broad implications for individual well-being as well as the overall economy.
A new White House study highlights the sharpest decline among men with lower levels of educational attainment and concludes much of the cause is a loss of economic opportunity for those would-be workers.
“No single factor can fully explain this decline, but analysis suggests that a reduction in the demand for less skilled labor has been a key cause of declining participation rates as well as lower wages for less skilled workers,” the Council of Economic Advisers said in the report.
Labor-force participation among men between the ages 25 to 54 topped out at 97.9% in 1954.
For about five decades, it has been heading steadily lower, punctuated by steeper falls during recessions. That’s a troubling phenomenon for individuals who should be at their peak, improving prospects for themselves and their families and contributing to the economy.
Participation appears to have stabilized but it’s still below levels at the end of the recession despite years of steady job creation, falling unemployment rates and signs of a tighter labor market.
The root causes have puzzled economists and pushed politicians to assign blame to everything from government programs such as disability insurance and international trade to immigration and simple demographics.
The White House study zeros in on the sharp divergence in participation rates by educational attainment and ethnicity. In the mid-1960s, participation figures nearly matched for those with a college degree and those with a high school degree or less. Last year, the rate for college-educated men was 94%, while the rate for men with at most a high-school diploma was 83%.
The rate also has declined most steeply for black men.
Some working men may opt to retire early, go to school or take care of their families. But that’s likely only a small slice of the group. Less than a quarter of prime-age men who aren’t in the workforce have a working spouse.
The White House also dismisses government benefits as a major cause. Social Security Disability Insurance “can explain at most 0.5 percentage point of the decline over this period,” and more than one-third of the men not in the labor force lived in poverty, the CEA study said.
“In contrast, reductions in the demand for labor, especially for lower-skilled men, appear to be an important component of the decline in prime-age male labor force participation,” the report said.
Possible causes include the disappearance of factory jobs, men’s falling educational attainment relative to women and a big rise in incarceration rates. A criminal record limits opportunities once an individual exits the criminal justice system. To be sure, the U.S. correctional population has been slowly declining in recent years–it’s fallen by an annual average of 1% since 2007, according to the Bureau of Justice Statistics.
White House economists also note relatively low male participation rates compared with other developed economies. A lack of government support helping match or train the unemployed for jobs may be to blame.
“Absent policy changes, this long-standing decline could continue, as more Baby Boomers move into retirement, and as younger cohorts enter the labor force at lower rates,” the CEA said.