It is true that, even without the Great Recession, demographic forces would have led to some decline in the employment-to-population ratio since 2007. As the baby boom birth cohort – born between 1946 and 1964 – ages, the fraction of retirees in the population grows steadily.
But these demographic forces are still not large enough to account for most of the decline in the employment-to-population ratio that I’ve described. One way to see this – but not the only way – is to focus on people who are outside the normal retirement age. Here, I’ve plotted the fraction of the population aged 25 to 54 who have a job.