There's been a lot of ink (or, I guess, pixels) spilled on the decline in the labor force. But the aggregate drop masks some interesting differences behind groups. Namely, the labor force participation rate among young people aged 16 to 24 has plummeted much faster than that of other age groups, even as the participation rate among the oldest Americans has risen to record levels.
Labor force participation has been slowly declining for decades, in part because more young people are pursuing higher education. But there's been a particularly sharp drop-off during the recession, as young workers have generally fared worse in the labor market than others: In 2011, their unemployment rate was 17.3 percent, while those aged 25 to 54 had an unemployment rate of 7.9 percent. And those who've stopped looking for work reported that they've done so because "that they were not able to find work, followed by the belief that no work was available," according to the Congressional Research Service:
Since January 2008, there has also been a growing number of discouraged workers of prime working age, between 25 and 65 years, but their labor force participation hasn't fallen off quite as sharply, as Political Math showed in this post from May:
By comparison, labor force participation has actually risen among those aged 65 and older. That's partly due to the longer-term trend of people living longer and working past the traditional retirement age. But the participation rate for the 65+ cohort has jumped during the recession, hitting a 30-year high as more Americans have either decided to postpone retirement or have come out of retirement to work as their savings have been hit by the downturn:
That doesn't mean they're all finding jobs, however: Older workers are more likely to be unemployed for long periods of time. It's partly because of lack of new technological skills, but age discrimination is also a factor.
For more on this, Derek Thompson took a good look at why labor force participation has been declining faster among men than women.