Boca Raton, FL – NCCI recently released its Quarterly Economics Briefing report for the third quarter of 2022, which addresses the critical issues impacting the US labor market and the impact of the pandemic on the rate of job seeking and participation in the labor force.
NCCI noted that decreased labor supply is driving the tight US labor market. About 3 million fewer people are working or looking for work today than would be at the pre-pandemic rate of participation in the labor force.
In this issue of the Quarterly Economics Briefing, we address these questions:
- Why is the labor force participation rate down?
- Which workers are or are not returning to the labor force?
- What does lower labor force participation mean for workers compensation?
Key findings included:
- Decreased labor supply is driving the tight US labor market. About 3 million fewer people are working or looking for work today than would be at the pre-pandemic rate of participation in the labor force.
- The biggest drops in labor force participation are for workers under age 25 and workers over 65. Participation among prime-age workers from 25 to 64 is almost completely recovered to its pre-pandemic rate.
- The share of workers remaining in the labor force past age 65 had been rising before the pandemic. The post-pandemic drop in labor force participation among older workers reverses that trend.
- Foreign-born workers contributed a large share of labor force growth before the pandemic. Reduced immigration since 2020 closed one of the main pathways to increase the labor force besides increasing the participation rate.
- Labor supply issues are likely to persist as workforce demographics indicate slow labor force growth over the next decade. The recent drop in labor force participation for older workers casts doubt on one of the few major drivers of projected growth.
Patrick Coate, PhD, Economist was the author of this report.
Read the free report: NCCI: Q3 2022 Quarterly Economics Briefing