Who is moving out of the U.S. labor force?

Read the recent testimony of Robert E. Hall (pdf):

Most of the decline in participation occurred among teenagers and young adults. The fi nding that these e ffects tend to be larger in more prosperous families points strongly away from much of a role for rising influence of benefi t programs, because these programs, especially food stamps, are only available to families with incomes well below the median.
So what is going on here?  Could it be “culture”?  Hall cites, suggestively, time use surveys showing that sleep and personal consumption of video are up strongly.


Gaming and poker might become new parallel status hierarchies/careers. Some people even seem to be making money out of it, though it's apparently a more competitive environment than the corporate ladder ever was. Yet status in gaming is much easier and quicker to attain than money or, for that matter, status in a traditional corporate hierarchy. Moreover you never get bored/peer pressured into working since you easily find peers online.

Poker is too much of a Ponzi-scheme type activity, made worse by legal regime uncertainty. The boom of the mid-2000s... busted.

Did you mean "bubble"? Ponzi scheme involves taking money from people now and promising more to them later.

I think he is suggesting that for anyone to make money (to live off of), you have to continually add new users or have users add more money, to keep the scheme going. Otherwise the site operators slowly take it all away. This is pretty similar to a ponzi scheme or MLM scheme.

"I think he is suggesting that for anyone to make money (to live off of), you have to continually add new users or have users add more money, to keep the scheme going."

By that definition, Disney World is a Ponzi scheme.

Did you mean 'zero sum'?

You might be right about his meaning. But it's no more zero sum than soccer is zero sum or movies are zero sum.

The question would be whether it is disproportionately hitting boys. As it does seem to be.

In which case, the decline of marriage, the general discrimination against boys, the extremely hostile attitude to boys in education would be having the obvious inevitable effect.

Banning marital rape causes boys to watch YouTube and sleep more?

Eat these words, damn mouth!

Marriage is rape now? Geez, you're out there.

Why not? Everything else is rape.

How about a normal supply response to sluggish real wages?

"How about a normal supply response to sluggish real wages?"

I'm not sure what you mean by that. Real wages have been relatively stagnant, but why would that cause less people to want to work?

Since there's no career advancement, you can quit for a while, start over at starting wage and lose nothing. Since there's no wage reward for working hard, there's no job satisfaction. You don't need wages to live online. That's how I saw it anyway.

"Since there’s no career advancement,..."

I don't think the statistics back that up at all. There's been no real growth in wages at the same given level. There's still wage growth for individuals that pursue a career.

There's certainly no career advancement if you think there's no career advancement. The attitude that you might as well not try is an income killer.

Tune in, turn on, drop out, move to the Philippines, sleep all day, party all night, marry a girl half your age. Works for me. And you can live--if you so choose--on about $5000 a year here, though my burn rate is considerably higher.

You're not supposed to marry the help.

20 days ago he said he had a girlfriend. Was there a wedding? How come we didn't get invitations??

Don't rule out a wife and a girlfriend. Or a wife and girlfriends. Or in RL's case, it might even be wives and girlfriends. He's a Playa.

...You don't have to move to the Philippines to find a girl half your age.

Well no, but if you are 30 there are probably fewer legal considerations.

Sleep is good for young adults who come from more prosperous families. "Athletes [at Harvard-Westlake School] who slept on average <8 hours per night were 1.7 times (95% confidence interval, 1.0-3.0; P=0.04) more likely to have had an injury compared with athletes who slept for ≥8 hours."


Teenagers from prosperous families don't need to work, by definition. The only jobs open to them are service sector jobs, yet these kids will go on to be high-income professionals. Spending their summers doing further study and networking with their peers will be better preparation for their future than washing dishes alongside minimum wage immigrants.

I'm totally sure that "further study and networking with their peers" are the only things going on...

All else being equal, I would bet on the person washing dishes being more likely to succeed in the future.

If you look at the numbers on inter generational income mobility you'd see that you'd likely lose that bet.

I did say "all else being equal".

"If you look at the numbers on inter generational income mobility you’d see that you’d likely lose that bet. "

Those numbers wouldn't tell you anything about the difference in future success between an upper class teenager who washed dishes vs "networking with their peers".

Yup. My 18 year old, college-bound daughter has been working part-time at a local restaurant for the past several months.

The experience helps with some basic blocking and tackling: showing up on time, having a good attitude, responsibility, the value of money, brushing up on Spanish with the help.

She met a co-worker, another (non-college bound) 18 year old who got kicked out of her house and has been living in her car or with friends for the past several months.

The idea that "further study and networking with their peers" is remotely comparable to the education she has received in how the world works and how the other half lives is laughable.

Coming from a relatively sheltered childhood, I always felt I learned more working overnight at a factory than I did at university.

There was much more "diversity" there than on campus. Blue collar workers of all persuasions are much more open and not afraid of confrontation than fellow students were. They also accepted or actively encouraged their own short comings and failures. I learned the value of irrational confidence very quickly. The blue collar environment is simply more "real" and "authentic", something a typical hipster strives for but not often achieves. It would do many of them wonders to experience a blue collar job for a couple years, but I suspect the failure rate would be high.

I worked a crappy job around that age. It didn't teach me anything I didn't already know. I would gladly have that time back for the money plus interest. I guess there are some people that need to learn that working for $8-10/hr is to be avoided at all cost. Doesn't school teach you to show up on time?

It is much easier to skip a day of university and get away with it than to skip a day of work and not hear about it.

But not high school!


But a teacher can't bawl you out or fire you.

As a parent, I find it useful to expose my kids to adults who will tell them things that would only elicit eye-rolling coming from me.

And...what would you have done with all that extra time anyway? My recollection of teenage years is wasting a lot of time, and I always had a job anyway.

I had numerous crappy jobs as a teenager. The worst were the ones my father arranged. (Hopefully, I'll have the wisdom to do the same.)

The one over riding lesson I learned is that you are not entitled to a good job and that there are plenty of other people who would gladly do it with a cheerful attitude. That there are people who work 12 hours loading hay for $50 (would be roughly $100 today) or have to jump in a loaded septic tank in January to clear a "clog" or move potted plants from one vast gravel pad to another vast gravel pad (with slightly more spacing to grow) on 100+ degree days, all summer long. (The last one did net be the best tan of my life.)

"Doesn’t school teach you to show up on time?"

College certainly doesn't.

I suggest Tyler watch "Girls".

No one should ever watch Girls.

I think he should watch it, Clockwork Orange style.

Isn't this where hipsters come from?

Seriously, the development of a leisure class among the well-off is considered to be something worth the question 'So what is going on here?'

"Why now?" is an interesting question. It isn't clear why there should be a big shift in the last 15 years or so.

Declining birth rate among the well off?

Just as a guess, based on German experience. A surprising significant percent of German children now enjoy the concentrated resources of their parents and their grandparents to do nothing at all.

I agree with the declining birthrate as a cause of increased leisure tendency in younger, plus the additional better health for older people. My son's maternal grandparents had exactly one grandson for about 10 years, they were retired during this time but still as full of energy as when they had three children to look after. My son barely knows how to wash a plate.

Glad to know that I'm not the only one with that problem. I've got 2 kids, only grandchildren on both sides. My parents are pretty good, but my mother-in-law will infantilize them to their doom if allowed. And to be honest, there are very few 16 year-olds who have the fortitude to fight for the right to do the dishes (and my sons are not among them).

The trouble is that helping her grandchildren makes my MIL feel useful, so I feel I'm damaging my kids if I let her help as much as she likes, and feel bad for her if I sideline her.

Still, can't complain about the support and my children love her, even as she yells at them for wearing shorts in 2C weather.

I'm actually finding this really hard to read. In the quoted passage, First off, "teenagers and young adults means basically anyone under 35. While the drops are steeper among teenagers, it's hard to tell how much of the overall drop they actually account for. Second, "more prosperous families" seems to mean anyone above median. Another chart - not broken out by age - suggests that most of the drop is in the 50-75 percentile levels. So speculating about a leisure class seems off base. Why isn't this just an average-is-over type effect, maybe combined with rises in college attendance?

Teenagers and young adults can't get the jobs they formerly did because adults have no other choice and are taking them, and employers prefer the adults.

Agreed. Competition for jobs in restaurants and big box stores is steep - employers prefer the adults who need the job to the teenagers who want the job for spending money.

We also enforce child labor laws more thoroughly now, which really limits how many hours and how late kids under 18 can work. We've had those laws on the books for a long time, but they were often ignored. I remember working till midnight (though on a weekend) when I was 16, which is definitely illegal for an employer to require or allow. Lawyered-up corporation like McDonalds or Walmart don't want to risk trouble so they prefer adults.

I think that this gibes with my perceptions. Go to a place like the wealthy Chicago or New York suburbs and eat at McDonalds. Who is serving you? Jose or Juanita, most likely, and Jose is not a teenager by any stretch.

Now go to Tennessee or a downmarket rust belt market. It's still white teenagers.

Open borders has ruined teenage employment for an entire class of people. And our overlords think that is just dandy.

Maybe. It has made life an awful lot better for Jose and Juanita though, and the extended family back home, and the village in which that family resides. Don't they count?

Who is Washington D.C. supposed to represent?

The owner of the New York Times. Obviously.

Any able-bodied person who wants a job and is willing to work can get entry-level service employment. The idea that white teenagers can't get a job at McDonald's because there is so much competition is ludicrous. All of these places are revolving doors that are constantly hiring.

"Any able-bodied person who wants a job and is willing to work can get entry-level service employment."

That's true in the region in which I live. However, teenagers (white or otherwise) have always been fairly crappy employees. So perhaps greater labor competition is displacing the marginal teenagers with older workers to some degree. It's almost certainly not the only factor, but it may still be a significant factor.

I live in Austin, and this hasn't been my experience. Most of the folks taking orders at chain fast-food restaurants are native English speakers and I haven't noticed an over-representation of Hispanics. Also most of them don't seem to be teenagers. Minorities (including blacks) do seem to be over-represented.

Now, kitchen cooks are another matter. That set of folks is almost entirely Spanish-speaking.

My teenaged kids in suburban Chicago have had no trouble getting service-sector jobs over the past couple years.

My observation is that 30 years ago, any teenager above the 10th percentile in initiative and basic competence could get a low-level service job. I generally landed each low level job with about 3 applications handed in person

Watching my sons, it feels it's now about the 40th percentile in initiative, which leaves out a *huge* chunk of young people. (Now you have to fill about 50 job applications - most on the internet, so it's much easier, but only about 1 in 20 respond at all because they're getting a ton of applications).

So, yes, anyone *can* get a McJob, but a lot fewer *will* get a McJob, much to their detriment.

(Also, now that so many fewer students have jobs, not having a summer job is far more socially acceptable and there are more of your unemployed peers to spend time with. No money, mind you, so much of it's on-line.)

My take on this is that the kids don't want jobs and the families have enough money that they just hand it out. When I was a teenager almost everyone had an after-school job, even the jocks did when their sport was not in season. Nowadays if your family isn't needy you don't work as a teen.

'Open borders has ruined teenage employment for an entire class of people'

I'm curious - when did the 'overlords' ever have their children work as McDonald's? And what makes you think that that white middle class teenagers ever worked at McDonald's in DC or NYC?

It seemed to me that in the 1970's and 80's affluent people's children above 16 years old were expected to have a summer job. My father certainly insisted on it.

All my siblings and I had jobs throughout high school and college. It was expected, because employers would want work experience.

These days, we're getting what McArdle calls The Mandarin Class. People who go from private school to prep school to Harvard/Yale (courtesy of their admission essay about volunteering in Africa) and then some grad school and then an unpaid internship someplace highly valued. Oh, and then a job making policy decisions about employment.

^This would be funny if it wasn't true.

"Oh, and then a job making policy decisions about employment."

Oh come now, that's a gross exaggeration. Most of those young "adults" seem to be writing for Vox or Salon or some other website this decade.

If you read Hall's paper, you will find that labor force participation hit the 20-34 group pretty hard. This is a current effect, and the effect on this age group DURING the Great Recession continues today because members of that group did not get their first job that would give them the experience to go up the job ladder in the future.

Unemployment at an early stage of a career is not a temporal effect. Rather than laying off teachers, government employees, etc. and being niggardly later on stimulus, we should have done more for this group, even helping them with education costs. But we didn't do as much as we could.

It wasn't that a 20-34 year old didn't get a job at McDonalds, but they didn't get a job in the career they had trained for.

"But we didn’t do as much as we could."

Ok, that's a fair statement. So, what did you personally not do that you should have?

AAUP has cleaned up on the 20-34 year old demographic. Sold overpriced degrees in unemployable disciplines.

Seems like BS to go with my Cowen-recommended beans.

'Frijol negro,' por favor. (Or whatever sounds right in Cuban Spanish - after all, the U.S. is likely to soon experience a wave of Cuban immigration, right?)

Could it be that the minor-age children of prosperous families are pursuing activities (other than low-wage jobs) that they believe will look better on their applications to elite universities?

My understanding is that the labor force participation rate for men 25-54 has been falling since the 1960's. E.g., http://johnhcochrane.blogspot.com/2014/01/larry-summers-martin-feldstein-speech.html#more. Hall reaches his conclusions by focusing on the last two recessions (which notably occurred after welfare reform). Looking at the period since 1960 could yield different results.

If you get a chance you should watch Welcome to the N.H.K.

But, I should warn you, I've heard that it's pretty easy to catch hikikomori from anime.

+1 for the use of hikikomori

This study actually explains a lot of the happenings on here:


hide your money in the back yard, go on food stamps, sleep, pay video games and stream the latest movies from shady sites, and most of all stay away from the college scam and the scamming professors.

You can live relatively luxuriously for little if you use tricks like these. Live with roommates, work a cash job, steal your entertainment, smoke pot instead of drink beer, crock pot cooking for most of your meals, take advantage of some government programs if available or tweak some numbers if you're borderline, etc.

The sign of wealth is where you're able to do this. If in Brooklyn, you're going to need a trust fund. In flyover country you can get away with this lifestyle with much less money.

Uh also, 25 to 54 participation is way way way down.

Are these also affluent teens?

Preparation for specialized or high-status jobs that haven't materialized?

Someone who goes to an expensive school or otherwise overinvests in job training might be reluctant to realize losses by taking a lesser job.

It seems to me that the most plausible explanation for the stark decline in workforce participation among prosperous teenagers from 1997-2013 is the change in criteria (or perceived criteria) for admission to selective colleges. When I was a (prosperous) teenager -- slightly before the study period -- my similarly situated friends and I all worked for a bit of spending money without much regard to optimizing that time for college admission. I can say, anecdotally but with some confidence, that today's teenagers and their parents are not nearly so blithe. It would be interesting to know whether there was a corresponding increase in "community service" among this population over the time period in question.

My sibs and I all put our work experience on our college applications. In that day and age, it was probably good. I wonder if these days we would be considered part of a "well-rounded" class because we didn't do an internship for the Senate or something.

Even if you didn't do an internship, you should have a long list of extra curricular activities combined with good grades that effectively precludes any kind of normal low end job.

Regression to the Bean!

It's cultural change brought about by technology. The changes brought about by the internet over the last 20 years drove up the marginal value of an hour of leisure relative to consumption. This doesn't show up on GDP, because GDP doesn't measure the time you spend watching video and playing apps on the phone (basically, for the same amount of $ spent on an appliance, you're earning so much more utility on leisure). It's also an affect that is concentrated more on youth, because they're just more tech savvy (and can take advantage of the leisure productivity gains better than your grandma can), It shows up in labor force participation especially for the wealthy because when your options are between doing hard work running the lines at Chipotle for minimum or lounging around playing Call of Duty with your basic subsistence needs met by your parents (in the case of the wealthy) or the government (in the case of the really poor), you'd rather spend time /not/ working.

This is so obvious I'm just surprised no one states it as such.

"It’s cultural change brought about by technology."

You certainly could be right. But it's unlikely that this is the only factor and it's not clear that it's even the dominant factor.

There are several interesting aspect to Hall's note. Looking at the graph it looks like for the top 2 or 3 brackets there has been a downward trend in participation rates, which accellerated in the post 2008 period. This downward trend, post 2008 holds for all but the bottom 10% - and even here there may be a slight down trend showing.

Only the bottom 10% show an increasing participation rate over the entire graph.

The table also shows the teanager particpation declining as income increase in a monotonic fashion.

So there seem to be a few questions to answer in the data.

"So what is going on here? Could it be “culture”? Hall cites, suggestively, time use surveys showing that sleep and personal consumption of video are up strongly."

I don't think I'dlook for causality in a cultural explanation of particiaption rates and what people are doing with their time. Seems like the use of time (sleep and videos) would be the result of unemployment/participation rate declines and not a cause of it.

In 1985 a young guy had to find a job to buy a car to have any hopes of getting laid. Now he can open up the Tinder app on his iPhone and find a willing partner without having to go through the trouble of finding a job first.

For the subset of the population that cares more about getting laid than building a career, the marginal value of low wage work has declined dramatically.

For the less ambitious, free high quality pornography is far more available than ever before. No need to leave the house.

We joke but there are undoubtedly several million men making that calculation and deciding that working a crappy job just isn't worth it anymore.

In Japan they call them "Herbivore Men". What makes us think that Americans are so different? http://en.wikipedia.org/wiki/Herbivore_men

Not leaving the house here. Your logic explains my life.

Yes, internships and college prep and probably even maintaing an attractive blog are all seen as better uses of a young person's time these days:


Forget videos, what's happened to the consumption of beans?

What happens to the data if we treat internships as normal work?

Maybe they see how meaningless and unpleasant their overworking parent's lives are and are looking for an alternative which isn't suicide.

Labor economists have been studying the drop in teen participation for at least a decade -- the teen participation rate peaked in the late 1970s.

They have reached the conclusion that given the sharply increased returns to education is that teens are increasingly using their scarce time in activities that will look good on a college education. A part time minimum wage job does not make much of an impression on a college application.

One study looked at teen participation by parents income and found a strong inverse relationship between family income and teen participation and concluded that it reflected teens use of their time to improve their college applications.


It is a shame that Hall did not refer to the existing literature.

I've been waiting for someone to mention student loans. Our generation has a crippling amount of student debt. About 14% of students graduating in 2011 defaulted on their loans. Those people have little incentive to work; their lives are already a mess. And while it's true that defaults were higher in the 1990s, the amount we're talking about per individual now is much higher, often high enough to seem insurmountable. When we were born, it was entirely possible to "work your way through college", but college tuition costs have risen far faster than incomes. You no longer "need a job to buy a car to get laid" because a) there is likely no job you can get that can pay you enough to buy one and b) the instant you get a job, your wages go directly to your debt and c) if you're one of the millions in default, your credit and subsequent prospects are already ruined. And an increasing number of fields with actual career potential expect several months of unpaid work, if not more. This was why I abandoned my own original career plans, luckily before I actually graduated; I couldn't afford a year of "earning my foot in the door". And I was lucky. For a lot of my peers, there's been no car, no dates, no saving for a home. They tread water, live at home, and pay their loans down as fast as they can. There's nothing wrong with their work ethic, but a work ethic is supposed to get you somewhere eventually. For a lot of people there's nothing on the horizon to indicate that will be the case. That's not how education is supposed to work.

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