Who Works? Who Doesn’t?
Labor force participation is especially low for those with lower levels of education. For example, in 2010 the overall labor force participation rate was 66.5%. For those with less than a high school education, it was 46.3%; for those with a high school education but no college, it was 61.6%; for those with some college but less than a bachelor’s degree it was 70.5%; and for college graduates the labor force participation rate was 76.7%. The wages of low-skill work in the U.S. economy are apparently scanty enough that they don’t get people to work, at least when compared with the alternative of not working.
More on Timothy Taylor’s post.
Taylor has some interesting stats on discouraged workers (part of those marginally attached to the labor force) in his May 2 post. The numbers would be even higher if he included part-time workers who would like full-time employment.
I wonder if labor market participation among the uneducated is low because they cannot get a job; or if some people are unemployed (and uneducated) because they lack motivation to achieve either education or gainful employment.
As income rises from around the poverty level, government benefits begin to erode — effectively raising the marginal tax rate. The marginal tax rate for low-wage workers is so high in many instances that few people are willing to work for the slight boost in income. It’s no wonder many of them don’t want to work — especially if they have mental or physical health problems.
This ties in with the U-6 measure of labor underutilization.