Is the Hot Economy Pulling New Workers into the Labor Force?

Régis Barnichon

FRBSF Economic Letter, 2019

Abstract: Labor force participation among prime-age workers has climbed over the past few years, reversing from the substantial drop during and after the last recession. These gains might suggest that the strength of the job market is pulling people from the sidelines into the labor force. However, analysis that accounts for underlying flows between labor force states shows that, rather than drawing new people in, the hot labor market has instead reduced the number of individuals who are dropping out.

Date: 2019
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