There is even concern that the unemployment rate will move back up significantly when discouraged workers reenter the labor force. Based on research by my staff, I am less concerned about this possibility.1 First, it is important to realize that labor force participation rates have been declining since 2000. The declines are driven mostly by demographic changes, including the aging of the baby boomers.
This trend is ongoing and was expected to accelerate. Second, detailed analysis of the Current Population Survey’s micro data indicates that much of the decline in participation since the start of the recovery can be accounted for by increased retirements and disability.