Over the past few decades the US labor market is undergoing some noticeable trends. One such trend is a consistent decrease in the percentage of the US population employed following a recession (highlighted in grey in the top graphic). This makes since as economic recessions cause unemployment, but a puzzling trends is following – After each of the past two recession the fraction of US population employed (the labor participation rate) has not returned to the previous pre-recession level. In 2001, labor participation was around 64.5%, but only returned to 63.5% by 2007 before the great recession hit. The 2007 recession’s impact has been even more drastic pushing labor participation down further to just 58.5%.
The US labor force composition is also changing quite drastically over the past 60 years. In 1950, the labor participation for men was 87% and for women 32%. That is, 87% of working age men where employed and just 32% of working age women. By 2010, labor participation for men fell to 70% and women’s participation rose to just under 60%. We are becoming a more gender neutral labor force.