In this letter Robert Hall and Nicolas Petrosky-Nadeau discuss their recent research into the decline in the labor force. They find that in young workers (16-24) the decline has been among wealthier households and that this holds true all the way up to 54 years old. However, for people 55 and older those with the highest incomes are the most likely to keep working.
What do you think could be behind this trend? Is this likely to be a permanent change or is this an impact from the financial crisis? (or both I guess if it's a permanent change caused by the crisis)
That article is really interesting. There are a lot of layers to this issue that has been arising in the labor force for sure! I think that one of the biggest things that is influencing this is the increase in technology and the reliance on this, and may young workers are taking advantage of this, also unfortunately, many people in that age group who are well off, believe that their family's money will keep them set for life. I believe that this could be a growing problem especially because getting a job is becoming even harder to do and many people will just want to live off their family's money.
ReplyDeleteI was thinking of an increase in income inequality. As the gap between the rich and the poor keeps increasing, the young workers from wealthier families don't have to work as much. Why would they try to earn money when they can live off from their family's wealth? It could be a change resulted from the financial crisis, but I think it won't be permanent. With the aging population, prime-age working force will end up as a part of labor force.
ReplyDeleteThis is a surprising fact. I would have expected a large portion of those leaving the labor force to be those in the poor and middle class. I agree with Jennifer that people from wealthy families may not need to work to maintain a certain standard of living. Nonetheless, it will be interesting to monitor this finding and see if it changes as the labor market continues to recover.
ReplyDeleteThis is a surprising fact. I would have expected a large portion of those leaving the labor force to be those in the poor and middle class. I agree with Jennifer that people from wealthy families may not need to work to maintain a certain standard of living. Nonetheless, it will be interesting to monitor this finding and see if it changes as the labor market continues to recover.
ReplyDeleteI certainly feel like there's plenty of sense to this article. People in the lower and middle class may have less opportunity, but they still have to make a living to survive and with wages stagnating and cost of living on the rise, most people have to work longer to continue to afford their current standard of living.
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