The power of inclusive labor force participation for mitigating population aging: Closing gaps at the intersection between race/ethnicity and gender in the United States

René Böheim, Thomas Horvath, Thomas Leoni and Martin Spielauer
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René Böheim: Johannes Kepler Universität Linz
Thomas Horvath: Österreichisches Institut für Wirtschaftsforschung
Thomas Leoni: Fachhochschule Wiener Neustadt (FHWN)
Martin Spielauer: Österreichisches Institut für Wirtschaftsforschung

Demographic Research, 2026, vol. 54, issue 33, 1051-1094

Abstract: Background: The US labor force and economic dependency ratios are projected to change significantly through 2060, driven by demographic shifts and persistent inequalities across race, ethnicity, and gender. The United States has lower participation rates than other industrialized countries and large participation gaps between population groups. Methods: We use a dynamic microsimulation model, incorporating US population projections, to project labor force participation and economic dependency ratios. We assess multiple scenarios, simulating the effects of reducing inequalities in education and health and equalizing participation across demographic groups. Results: Baseline projections indicate a labor force increase of approximately 27 million people by 2060, driven primarily by population growth. Reducing health and educational disparities could increase the baseline labor force projection by about 10%, adding 2.6 million people. The projected effects of closing gender and racial/ethnic participation gaps are substantial: equalizing participation rates between demographic groups could add up to 14.3 million people to the labor force. Conclusions: Eliminating disparities in labor force participation has the potential to offset the impact of demographic aging on the economic dependency ratio, highlighting the importance of targeted policies to enhance labor force resilience by addressing inequalities and improving inclusion across population groups. Contribution: We quantify the long-term effects of closing labor market disparities on labor force growth and economic dependency in the United States. We provide evidence-based projections to inform policies aimed at mitigating the economic challenges posed by an aging population.

Keywords: labor force projections; age dependency; dynamic microsimulation; race/ethnicity (search for similar items in EconPapers)
JEL-codes: J1 Z0 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:dem:demres:v:54:y:2026:i:33

DOI: 10.4054/DemRes.2026.54.33

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