Demographic Change and
the Workplace
Demography is Destiny, Open Classroom
Northeastern University, School of Public Policy and Urban Affairs
February 3, 2011
Robert K. Triest
Vice President and Economist, Research Department
Federal Reserve Bank of Boston
Note: opinions are my own and are not necessarily those of the Federal Reserve Bank of
Boston or the Federal Reserve System.
Demographic change occurs slowly
• “Demography as destiny.”
• 2001 Boston Fed conference:
– Seismic Shifts: The Economic Impact of
Demographic Change
– (available at www.bos.frb.org/economic/conf/conf46/)
• Contrast with business cycle data:
– Even current quarter GDP is hard to predict!
Prof. Bluestone used TV shows as examples
of changes in U.S. family structure.
– Leave it to Beaver -to- Modern Family
• Changes in U.S. workplaces as reflected on TV:
– The Flintstones
–
-to-
The Office
The U.S. workforce has become:
• More diverse
– Dramatic increase in representation of women
– Increased share of minority groups
– Increased share of immigrants
• Better educated
– Increased rates of high school and college graduation.
• Older
– Increase in average age and a flattening of the age
structure
Female labor force participation has increased
while male participation has decreased
SA, %
Labor Force Participation Rate: 16 Years & Over
100
90
80
70
60
50
40
Men
Women
Total
30
20
10
0
1948
1953
1958
1963
1968
1973
1978
1983
1988
Source: Bureau of Labor Statistics
1993
1998
2003
2008
Youth labor force participation has recently
been trending downwards
SA, %
Labor Force Participation Rate: 16 - 19 Years
70
65
60
55
50
45
40
Men
Women
Total
35
30
25
20
1948
1953
1958
1963
1968
1973
1978
1983
1988
Source: Bureau of Labor Statistics
1993
1998
2003
2008
Convergence between genders in middle age
participation rates
SA, %
100
Labor Force Participation Rate: 45 - 54 Years
90
80
70
Men
Women
Total
60
50
40
30
20
1948
1953
1958
1963
1968
1973
1978
1983
1988
Source: Bureau of Labor Statistics
1993
1998
2003
2008
…with convergence continuing as retirement
approaches.
NSA, %
Labor Force Participation Rate: 55 to 64 Years
100
90
80
70
60
50
40
Men
Women
Total
30
20
10
0
1948
1953
1958
1963
1968
1973
1978
1983
1988
Source: Bureau of Labor Statistics
1993
1998
2003
2008
Participation rates for 65-69 year olds are
low but increasing.
Labor Force Participation Rate: 65 - 69 Years
NSA, %
40
35
30
25
20
15
Men
Women
Total
10
5
Source: Bureau of Labor Statistics
2010
2009
2008
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
0
…as is true of 70-74 year olds.
NSA, %
Labor Force Participation Rate: 70 - 74 Years
30
25
20
15
Men
Women
Total
10
5
0
1987
1990
1993
1996
1999
2002
Source: Bureau of Labor Statistics
2005
2008
High school graduation rates have increased
dramatically over time.
Percent of Population with a High School Diploma or Higher
%
100
1960
90
1980
2000
80
70
60
50
40
30
20
10
0
25-29
30-34
35-39
40-44
45-49
50-54 55-59 60-64 65-69
Age
Source: U.S. Census Bureau, Decennial Census of Population.
70-74
75+
College graduation has also become more
common over time.
Percent of Population with a B.A. or Higher
%
35
1960
1980
2000
30
25
20
15
10
5
0
25-29
30-34
35-39
40-44
45-49
50-54
Age
55-59
60-64
65-69
Source: U.S. Census Bureau, Decennial Census of Population.
70-74
75+
30 years ago, college graduation was more
common among men than among women.
Percent of Population with a B.A. or Higher, 1980
%
35
Men
30
Women
25
20
15
10
5
0
25-29
30-34
35-39
40-44
45-49
50-54
Age
55-59
60-64
65-69
Source: U.S. Census Bureau, Decennial Census of Population.
70-74
75+
Among young cohorts, college graduation is
more common among women.
Percent of Population with a B.A. or Higher, 2009
%
40
35
30
25
20
15
Men
Women
10
5
0
25-29
30-34
35-39
40-44
45-49
50-54 55-59 60-64 65-69
Age
Source: U.S. Census Bureau, Decennial Census of Population.
70-74
75+
Management education was
formerly male dominated.
Source: Claudia Goldin, “From the Valley to the Summit,” Regional Review,
Federal Reserve Bank of Boston, Q1 2005
The share of women in many professional
programs has increased dramatically.
Source: Claudia Goldin, “From the Valley to the Summit,” Regional Review,
Federal Reserve Bank of Boston, Q1 2005
Increased educational attainment is
associated with:
• Increased earnings.
• Decreased unemployment rate.
• Increased labor force participation rate.
Median Earnings of Full-Time Year-Round Workers Ages
25–34, by Gender and Education Level, 1971–2008
(in Constant 2008 Dollars)
Sources: The College Board, Education Pays 2010, Figure 1.6; National Center for Education Statistics, 2004; U.S. Census Bureau, 2003–2009; Bureau of
Labor Statistics, 2010g; calculations by the authors.
Slide from The College Board, “Education Pays
2010”
Unemployment Rate by Educational Attainment
25+ Years (SA, %)
16
16
No high school diploma
High school grads
Some college
College grads +
12
12
8
8
4
4
0
0
95
Sources: BLS /Haver
00
05
10
Labor Force Participation Rate by Educational Attainment
25+ Years (SA, %)
82.5
75.0
82.5
No high school diploma
High school grads
Some college
College grads +
75.0
67.5
67.5
60.0
60.0
52.5
52.5
45.0
45.0
37.5
37.5
95
Sources: BLS /Haver
00
05
10
The labor force is becoming more racially and
ethnically diverse.
1988
Asian
3%
Hispanic,
nonBlack
7%
Other 2018
3%
Black
11%
Asian
6%
White,
nonHispanic
79%
Black
12%
Hispanic,
nonBlack
15%
Source: Bureau of Labor Statistics
White,
nonHispanic
64%
The U.S. has entered an era of slow labor
force growth.
3.00
Annualized rate, %
2.50
2.00
1.50
1.00
0.50
0.00
1950s
1960s
1970s
1980s
1990s
2000s
2010s
2020s
Labor Force Growth Rate (16 years and over)
Population Growth Rate (15 to 64 years)
Source: Bureau of Labor Statistics, Census Bureau
2030s
2040s
Changes in the age distribution
• Reduced labor force growth may produce a
general shortage of workers.
– But the reduction in birth rates has also
produced a flattening of the wage structure.
– Will there be a surplus of older individuals who
would like to continue working?
Changes in the age distribution
• The flattening of the wage structure has
reduced the economic return to labor
market experience.
– Research from “Population Aging, Labor
Demand, and the Structure of Wages,” joint
work with Margarita Sapozhnikov.