Question

Complete a Essay answer for the below application discussion!

APPLICATION 2– Unemployment and Inflation

DECLINING LABOR FORCE PARTICIPATION

APPLYING THE CONCEPTS #1: What factors account for the decline in the labor force participation rate in the last decade?

Answer 1

Factors that led to decline in labour force participation rate in last decade.

There are several factors responsible for the decline , two important ones are listed below

First is the Aging Population. A large percentage of working population is declining as they are moving out of the labour force. this is the aging population ie the dependent population. The labour force retiring is more than those entering the labor force and hence it is seen that the labour force participation rate is reducing.

Second is the recession and economic growth . In the last decade , owing to the 2008 recession and economic crisis , many were rendered unemployed. Due to the prolonged period of unemployment, there would have been discouraged workers who would have completely foregone the idea of returning to the labor force which would have resulted in the decline. The other factor is economic growth. Economic growth since the last few years has been sluggish which meant that the job opportunities were not increasing as they should have.

(you can comment for doubts )