Question

Please watch the following video on the decline of men (and women) labor force participation rates (https://www.youtube.com/watch?v=tCOfP3e9Co8) and be respond to the following questions.

1. Who are these men, and how are they spending their time?
2. What are some of the supply and demand factors for the declining participation rates?
3. Has the decline in participation rates occurred in other OECD (i.e. wealthy economies) countries?
4. What can we do about it? That is, bringing these men/women back into the labor markets.
5. Why should the next President (and us) care about this decline in participation rate?

Answer 1

1) The fraction of men between 25 and 54, prime age men who are mostly too old to be in school and mostly too young to be retired by the conventional standards are not working or looking for work. Most of them are neither spending any time on child care nor chores , but they are spending a lot of time watching the television.

2)Supply factors: Two reasons why the bunch of men are not working

• They are married to women who are working and earning the living
• There are more people on disability insurance today than before but the increase in disability insurance has been much smaller than the increase in no. of men not working. A lot of the diability insurance probably is caused by the men not working

Demand factors :

• The amount that employers want to hire men for some reason has gone down and that is consistent with the evidence of an aggregate and in state.
• Fewer people want to hire people with less education without a high school degree. So reduction in demand for unskilled labour is one of the demand factors.

3) No. Some OECD countries has done much better work than USA to increase the particiaption rate. For ex: In Germany labour force participation rate is increasing

4) Education ,has a greater impact on having a job. So expanding education, in a way by expanding access to college having labour market instituions that do a better job of helping people find work, also a increased percentage of GDP need to used on active labour market policy helping people search for jobs. A more flexible workplace with subsidized childcare having paid leave,sick leave etc, need to be in the job.

5)Increasing participation rate increase the speed of income growth. Low participation rate leads to lower growth rate, as workforce is growing very slowly, as an increase in participation in workforce would bring fiscal sustainability. So, these are the challeges, the next US president have to deal with.