Publication Date
11-2024
Abstract
The labor force participation rate has been declining in the United States since the late 1990s. Decomposing the aggregate labor force participation rate by age reveals that this decline is being driven by reduced participation among relatively young individuals, those aged 16 to 24. In fact, participation among older individuals, age 55 and above, has been increasing. In this paper, we develop a model in which individual decisions regarding schooling and retirement, in view of empirically observed changes in mortality, can simultaneously explain these three labor force participation trends. Furthermore, a counterfactual scenario that accounts for the observed demographic trends but does not account for agents' endogenous schooling and retirement response is found to contradict the observed trends.
Included in
Labor Economics Commons, Macroeconomics Commons, Sociology Commons