Labor Force Participation Discussions

Labor force participation is a frequent topic of conversation on the radio these days so it seemed appropriate to actually share the graphs that I often show JT when the topic comes up. 

There are a few things to take away from this graph. First is the fact that for all the recent discussions about declining labor force participation, this is not a new thing. The overall rate peaked around 2000, and has been on the decline since. There are many factors that go into this, but it is not easily reversed. This graph divided out by male and female is also interesting.

Once again, from my perspective, the key takeaway is that all the recent discussion about labor force participation is actually late to the party. The male labor force participation rate has been pretty much on the decline since, well since the data series began in 1948. The labor force participation of women has been on the rise too as seen in the graph. I grabbed data from the ACS PUMS data for 2012-2016 for North Dakota for labor force participation by age. The thought here is to look at the labor force aspects by age in the state to see what happens across ages, and also compare it with wage and salary income, also across age. 

The graph conforms to what most people would expect I think. As age increases so does labor force participation, at least until you start to reach retirement ages. Average income goes up as well and peaks around the $40,000 mark and stays at that level with the higher participation rates. Participation rates in North Dakota stay high with a peak of around 80%. 

I presented these graphs at the North Dakota Demographics Conference as we talked about taxation and demographic factors. The demographic focus of that talk was on age, and obviously the income taxes can be higher when earnings are higher. Those incomes coincide with ages that many want to see staying in North Dakota already, though I have no real answers for that issue. 

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