The Reversal of the Employment-Population Ratio in the 2000s: Facts and Explanations


The decline in the employment-population ratios for men and women over 2000-07, just before the Great Recession, represents a historic turnaround in U.S. employment trends. The decline is disproportionately concentrated among the less educated and younger groups within the male and the female populations and, for women, especially among unmarried women without children. About half of the decline among men can be explained by declines in wage rates and by changes in nonlabor income and family structure, but the decline among women is more difficult to explain and requires distinguishing between married and unmarried women and between those with and without children, as these subgroups have experienced quite different wage and employment trends. Neither changes in taxes nor changes in government transfers appear likely to explain the employment declines, with the possible exception of the Supplemental Nutrition Assistance Program. Other influences such as the minimum wage and health factors do not appear to play a role, but increases in incarceration may have contributed to the decline among men.