by Rachel diCarlo Currie
Independent Women’s Forum
July 07, 2014
America’s labor-force-participation rate (LFPR) has been in sharp decline for years. Economists are still debating how much of this trend reflects long-term structural trends versus short-term cyclical trends. The distinction is often blurry; some of the key “structural” factors reducing participation – including more retirees, more Social Security disability claimants, and more students – could have an important “cyclical” component, and might change speed and/or direction if the economy improved. Furthermore, LFPR among men aged 25-54 has fallen substantially – not just since the Recession, but over the past several decades. Thus, faster economic growth alone won’t solve the problem. Policymakers need to think bigger, and consider reforms such as boosting support for apprenticeship programs, expanding the Earned Income Tax Credit and the child-care tax credit, reducing or eliminating implicit federal tax penalties that discourage work, exempting older workers from the Social Security payroll tax, and easing the burden of occupational-licensing requirements.

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