Report: Older Workers Leaving U.S. Labor Market Helping Lower Unemployment Rates

According to press reports, Barclays Capital has issued a report finding that the size of the U.S. workforce is shrinking as baby boomers retire, which will lead to reducing the jobless rate faster than expected. In an article by Kevin Hall, of McClatchy News Service, in "Dispelling an Urban Legend," Barclays economist Dean Maki argues that the size of the U.S. workforce is shrinking as aging baby boomers hit retirement age amid a sluggish economy. This--and not the so-called missing workers from the labor force--may be knocking down the jobless rate faster than expected.

“Based on our reading of the evidence, the conventional view that in recoveries the unemployment rate will stop falling and even start to rise because of surging labor force participation rates amounts to something of an urban legend,” Maki and his colleagues concluded. “Such an event has not happened in the past and we do not believe it will this time either.”

Source: Miami Herald "Older workers exiting fast, shrinking the labor force, study says" (March 7, 2012)