What’s behind the increase in men’s labor force participation?

Based on Policy Hub paper, Generations of Discontent: Labor Force Participation and Wages by Julie Hotchkiss

For decades men’s participation in the labor force had been on the decline while women’s participation rates continued to rise.

However, several year’s ahead of the pandemic, men’s participation rate began to rise and by 2023 had returned to the 2010 rate of 89.2 for prime age men.

Through the lens of successive generations, we see that men have been less likely to participate in the labor force than their fathers (at the same age) while women have increased their participation in the workforce. Controlling for various demographic changes over the years still leaves men’s decades-long decline largely unexplained.

However, my calculations indicate each successive generation of men experienced lower expected wages than the generation before (except Millennials) while women’s expected earnings improved with each successive generation so it's not surprising that men would show less work engagement if they were earning less than their fathers, and women would show more work engagement as they earned more than their mothers.

Both men and women faced lower expected wage growth (except Millennials) which would tend to put lower pressure on participation.

Digging in, what could account for the recent rise in men’s participation? In 2014, men’s participation bottomed out (excluding the pandemic period).

During this time Millennials were entering their prime-age working years, at 14 to 30 years old, and Gen Xers aged 31 to 49 years old were firmly in their prime-age years.

We also see that in 2014 and beyond both Gen X and Millennials started experiencing improvements in wage levels. In fact, Millennial men were faring better than those of Gen X.

Additionally in 2014 and beyond, Millennial men have higher predicted wage growth than both Gen X and Boomers. More recently, Gen X wage growth surpassed that of Boomer’s wage growth as well.

Further analysis confirmed these patterns of change are more pronounced among U.S. citizens vs. non-citizens, suggesting recent immigration patterns is not driving the trend change.

If we can attribute the generational decline in men’s participation to their declining market returns then we might expect that the more recent labor market gains would play a role in the reversal of these trends.

Conclusion:

• Workers being willing to supply their labor is necessary to provide resources for economic production and to generate income fueling demand for goods.
• This paper illustrates the important role that wages and wage growth play in supporting workers’ participation decisions.
• A reversal of the decades of declining male labor force participation rates is good news as economist anticipate?declining population growth?(fewer available workers) in coming years.

For interactive charts and the full paper follow the link to Generations of Discontent: Labor Force Participation and Wages.