Who is (Not) in the Labor Force

The number of people not in the labor force has been growing. As of December 2016, 95.1 million people, aged 16 or older, were not in the labor force, according to data from the Bureau of Labor Statistics (BLS).

An aging population is responsible for this growth, but what are the other reasons individuals cite for not being in the workforce?

And how many of these people might return to the labor force?

These are important questions given ongoing labor access issues in the construction sector. Let’s examine data from the 2016 Current Population Survey (CPS) and the Annual Social and Economic Supplement (ASEC) to seek answers. It should be noted that the data used in this article are limited to people who were 16 years and older and neither worked nor looked for a job during 20152 (These numbers are different from the estimates from the BLS noted above. For the BLS numbers, anyone who does not qualify for the civilian labor force is classified as “not in the labor force.”3)

In the CPS and ASEC data, the respondents were asked the main reason for not working. The reasons included: ill or disabled, retired, taking care of home or family, going to school, could not find work and other.

Among the 87.3 million people who were not in the labor force in 2015, 35 million (40%) were men and 52.3 million (60%) were women. And among all age groups, about 42% of individuals not in the labor force were aged 65 years old and over, 15% of them were between the ages of 55 and 64, 25% of them were between the ages of 25 and 54, and the remaining 19% were people 24 years old or less. Intuitively, people aged 65 years and over had the largest share within the people who were not in the labor force in 2015.

Building on the age data, about 45% of people reported retirement as the main reason for not working, which is close to the 42% of the not-in-labor-force population who were 65 years old and over. If the 45% “retired workforce” (people not in the workforce due to the self-reported reason of retirement) are further divided by age, 83% were 65 years old and over. Overall, about 37% of the not-in-labor-force population was due to the self-reported reason of retirement and aged 65 year old and over. Persons in this 37% share are unlikely to return to the labor force.

Among the people who were between the ages of 16 and 64, the largest share, 31%, reported going to school as the main reason for not working in 2015. Another 26% cited being ill or disabled, followed by 25% who were taking care of home or family, 13% who were retired, and 5% who were unable to find work and other reasons.

For those citing school, 85% were aged between 16 and 24. Overall, about 15% of the not-in-labor-force population was due to the self-reported reason of going to school and aged between 16 and 24. This group of people is likely to enter the labor force, although younger individuals will in turn replace them at schools.

Thus, based on the CPS and ASEC data, only a small proportion of the remaining population reported the main reasons for not working were that they could not find work and other reasons.

These numbers present challenges, and opportunities, for growing the labor force to promote construction employment. The 5% of individuals not in the labor force and aged 16 to 64 may be recruitable. The 25% who cited taking care of home or family were 91% women and include a fair number of stay-at-home moms. Only 9.2% of the construction labor force is female. This suggests that the construction industry must improve its recruitment of women in the future, or recruit more successfully from other labor market sectors.

Regardless, the construction labor force is aging. The industry must recruit the next generation of workers as industry activity grows in the years ahead, given growth in population not in the labor force.

 

Notes:

  1. Steven F. Hipple, “People who are not in the labor force: why aren’t they working?,” Beyond the Numbers: Employment and Unemployment, vol. 4, no.15 (U.S. Bureau of Labor Statistics, December 2015), https://www.bls.gov/opub/btn/volume-4/people-who-are-not-in-the-labor-force-why-arent-they-working.htm.
  2. Respondents who reported “no” to the first three questions below were considered to be not in the labor force. The fourth questions asked the main reason for not working.
  •    “Did ____work at a job or business at any time during 20__?”
  •    “Did ____ do any temporary, part-time, or seasonal work even for a few days in 20__?”
  •    “Even though ____did not work in 20__, did ____spend any time trying to find a job or on layoff?”
  •    “What was the main reason ____did not work in 20__?”      

3.  The labor force includes people who are employed and unemployed. The reminder — those who are neither employed nor looking for a job are counted as “not in the labor force”, defined by the U.S. Bureau of Labor Statistics (BLS).

 



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