The declining labor force participation rate for middle-aged males

Here is for ages 40-44, since 1976:


You sometimes hear there is no evidence of automation putting people out of work, but arguably the automation of manufacturing, plus IT-enabled foreign competition, are significant factors behind this trend.  This picture also casts doubt on the common view that there are hidden real wage increases, not picked up by standard data and wage deflators and the like.  You would expect higher real wages, if indeed they were in place, to be reflected in a more positive labor supply response, but we don’t see that.

That picture is from Bill McBride.


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