CBO: Share Of Working Americans Will Continue To Decline Over Next 30 Years
The share of Americans participating in the labor force will continue to drop over the coming decades, according to Congressional Budget Office estimates released Friday.
The CBO projects that over the next 30 years the labor force participation rate — or the percentage of noninstitutionalized civilians either working or looking for work — will decline 3.7 percentage points, from 62.8 percent in 2017 to 59.2 percent in 2047.
According to CBO, the participation rate will decline faster for men than for women.
The primary cause of the decline, CBO says, will be the ongoing retirement of baby-boomers. CBO reached this conclusion by controlling for age — maintaining the same age and sex composition of the population from 2017 through the next 30 years. When controlled for age, CBO said, the decline largely evaporated.
“Therefore, aging essentially accounts for the decline of 3.7 percentage points over the next 30 years,” CBO explained in a blog post previewing the agency’s full economic forecast, slated for release later this month.
According to CBO, in conjunction with the aging population there are three additional factors adding to the decline in participation: including a lower participation rate among the generations replacing baby-boomers, more people receiving disability benefits, and the declining marriage rate.
“First, the members of subsequent generations, who are replacing baby boomers in the labor force, tend to participate in the labor force at lower rates,” CBO explained. “Second, the share of people receiving disability insurance benefits is generally projected to continue increasing, and people who receive such benefits are less likely to participate in the labor force. Third, the marriage rate is projected to continue declining, especially among men, and unmarried men tend to participate in the labor force at lower rates than married men.”
The forces helping to keep the participation rate stable, CBO noted, include a more educated workforce, more diversity, and increased longevity.
“Like the Census Bureau, CBO expects Hispanics to make up an increasing share of the population, which would increase the overall labor force participation rate, and expects non-Hispanic whites to make up a diminishing share, which would decrease the participation rate—resulting, on net, in an increase,” CBO said in its post.