Compare and contrast Bill MacBride’s attribution of the decline in labor force participation rate to the changing ratio of those over age 55 to those 25 to 54:
This decline in the participation rate has been expected for years. Here are three projections (two from before the recession started). The key to these projections is that the decline in the participation rates was expected…
with Marcus Nunes’s analysis of employment rates and labor force participation rates of those 55 and over.
I see no way to reconcile continuing increases in the employment rate and labor force participation rate for seniors with an overall labor force participation rate that has declined due to a high proportion of seniors to total population. That something was projected to occur due to changing demographics and, in fact, occurred does not necessary mean that it happened for the reasons that the projections foresaw. Changing demographics only affects the labor force participation rate when all other things are equal. They aren’t.
Mike Shedlock takes a somewhat different tack in contradicting Mr. MacBride’s observations. In short, Mish notes Bill’s sleight-of-hand in failing to point out that the timeframe over which the decline in participation was projected to take place was much longer than the period over which it has actually taken place:
In September 2005 the participation rate was 66.1. In September of 2010, the participation rate was 64.6 which Szafran did not expect until 2015. The current participation rate is 63.6, a number Szafran expected in 2019 perhaps.