The participation rate is a ratio of the labour force to the overall population. This measure provides insight into the labour market and the health of the economy.
Since the beginning of the pandemic, outbreaks of the virus have forced government intervention and prompted lockdowns to curb the spread. Labour markets reacted accordingly as employment dropped, and have since struggled to recover to pre-pandemic levels. Examination of US employment and participation rates of those Aged 35-44 & Aged 55+ reveals shifting preferences and other potentially lasting effects of COVID.
Participation rates continue to lag the employment of those Aged 35 to 44 as families struggle with the lack of childcare. As a result, working parents, the majority of whom are women, have been slow to return to the workforce. For those Aged 55+, the gap between employment and the participation rate is a function of many elderly workers being forced out of the labour market and into early retirement. This is due both to increased vulnerability to the virus as well as financial considerations.
Lower participation rates have caused labour shortages and have forced companies to increase wages as they continue to struggle to find workers. Moving forward these issues will likely play a key role in determining both the success and speed of the economic recovery in the US.
