Question

What factors cause increases and decreases in labor force participant rates for particular socio-economic groups?  

Answer 1

Labor force participation rate refers to the percentage of people who have jobs or are looking for jobs. This percentage changes with demographic characteristics like sex, age,education , marital status ,no of children at home .Economic and fiscal conditions also affect labor force participation.

Men participate more in labor force than women and participation varies by the year of birth.Likewise people with more education are likely to participate more than people with less education.As for eg statistics show that in 2017 participation of men with college degree was more than without college degree.Racial and ethnic group also affect labor force participation.People with disabilities generally affect labor force participation rate.Married men are more likely to participate in labor force for their family then unmarried men and married women are less likely to join in labor force for doing household work..Married women with young children are less likely to work as they have to look after their children at home than unmarried women with young children because they have to earn for their family.Some of the demographic factors are affected by federal policies as it is seen that education policy has had affect on the education and immigration policy has had affect on the composition of labor force.

Econic causes also affect labor force.Labor force participation rate falls during recession because people find difficulty in getting jobs and again increases during the recovery period.

Some fiscal policies like earned income tax credit which subsidizes the income of people with low income increase labor force participation while Social Security Disability Insurance program decrease labor force participation .