Wednesday, August 10, 2016

Declining Labor Force Participation is not Unique to Oregon

Oregon’s labor force participation rate – the percentage of the civilian noninstitutional population that is either employed or unemployed – peaked in 1998 at 69.0 percent and has since generally declined. The labor force participation rate (LFPR) fell to 61.0 percent in 2013, the lowest annual percentage since comparable records began in 1976. Oregon’s LFPR remained very close to the 2013 series low in both 2014 and 2015 at 61.1 percent.

The trend in Oregon’s LFPR resembles the overall trend for the United States, which peaked in the late 1990s and has since fallen to historically low levels.

One of the main reasons for falling participation since the late nineties is changing age demographics. People 16 to 24 years of age are delaying entry into the labor force to a greater extent than in the past due to increased participation in school-related activities, lowering labor force participation rates for this age group and by extension the overall LFPR.

People aged 65 years and over – an age group most likely to be out of the labor force due to retirement – make up a larger share of the civilian noninstitutional population today than they did in the late nineties, as the oldest members of the baby boom generation began to reach this age category in 2012. LFPRs for people age 65 years and over are much lower than those for the prime working age group – people age 25 to 54 years. Therefore, as the baby boom generation continues to age into the 65 years and over population group, overall LFPRs will experience downward pressure as a larger share of the population reach an age group with an LFPR that is historically lower than those for other age categories.

To learn why the labor force participation varies by county, read Local Area Unemployment Statistics Coordinator Tracy Morrissette's full article "Oregon Labor Force Participation Rates by County, 2015".

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