Upon the Center of Disease Control and Prevention’s discovery that the American birth rate has plummeted to its lowest-ever level, the White House Council of Economic Advisers published a positive study of the macroeconomic implications of our aging population followed by normative policy prescriptions to maximize our output per capita and, in turn, overall living standards. The first half is a useful objective analysis of how worker productivity combined with the share of working-age people who actually work fuel our economic advancement. But the Biden administration mistakes our current labor shortage as a crisis caused by child care leaving young mothers out of the workforce when really lazy baby boomers are to blame.
Nearly 9-in-10 men aged 25 to 54 are in the labor force, defined as working or looking for work, as are nearly 8-in-10 women of that age. Although the CEA is correct that the prime-aged female labor force participation rate still lags behind the male rate, the prime-aged female rate has almost continuously trended upwards since the post-war era, while the prime-aged male rate has leveled off after gradually falling over the decades from nearly 100%.
The problem lies in the next higher age bracket. Whereas the labor force participation rate among women aged 55 to 64 has risen over time to more than 60%, the male rate has collapsed from nearly 90% in the 1950s to just 71.6% today.
Further data from the Bureau of Labor Statistics explain why the crisis is to blame on boomer indolence, specifically among men, not a lack of child care.
The most precise data comes from a BLS study from 2014 on why various demographics are not in the labor force. It’s not the most recent, but is is the most granular, especially in the breakdown of the boomers.
Of the 31.7% of adults aged 55 to 64 in 2014 who were not in the labor force, a plurality of nearly half reported they were simply retired early. About a third said they were ill or disabled, and just 13% of those out of the labor force said they had home responsibilities, presumably elder care or child care for their own children or grandchildren. Those 55- to 64-year-olds who were not in the labor force for “other reasons,” which could include those who would want a job but could not due to unwanted caregiving obligations, comprised less than 1% of all adults aged 55 to 64.
So a third of adults aged 55 to 64 aren’t working or looking for work, and as of 2014, nearly 14% of that entire age range had simply retired early despite American life expectancy approaching nearly 80 years old. The majority of these boomers were not citing caring for grandchildren or going back to school as their reason for not working. Instead, nearly half were simply retiring and doing nothing economically useful.
By contrast, the mere fraction of prime-aged adults not in the labor force seem to be spending their time parenting, and they evidently aren’t doing so because of a lack of child care.
As of last month, there were 21 million people aged 25 to 54 who are not in the labor force. Only 108,000 said that they wanted a job but cannot have one due to familial obligations. Another 302,000 cited “other reasons,” which include child care and transportation problems, but alas, we do not know how many comprise that share.
The 2014 study breaks this age range down to gender. Only 1.1% of all women in the 25-54 age range cited “other reasons,” which presumably includes those women who wished they could have worked but would not for reasons which included, but were not limited to, a lack of available child care. In raw numbers, that’s no more than 703,000 prime-aged working women who were unable to work, despite wanting to, because of child care constraints.
A study from the Federal Reserve Bank of San Francisco seemed to confirm this thesis that early retirement, not a contraction of child care availability, has driven the decline in our projected labor force participation rate.
“While trend LFP for women overall has declined since 2019, the entire decline comes from the 55 and older age group, with almost no change in trend for women of prime working age, 25–54,” the FRBSF economists wrote. “Our results are consistent with the view that retirement has been an important driver of LFP declines since the pandemic, the so-called COVID retirement boom. Nearly all of the decline in group-specific LFP trends—which we showed above accounts for about one-third of the total decline in trend LFP since 2019—can be attributed to declines in trend LFP for people ages 55 and older. In other words, Americans retired at younger ages during the pandemic than they have historically, and this contributed to the decline in overall LFP.”
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And while the BLS data doesn’t break down the 55 to 64 demographic by gender, one look at the separate LFPRs by gender shows that while both genders are retiring far too early, older women are trending in the right direction while men have trended in the wrong one.
Relaxing regulations constraining the supply of childcare, such as Washington, D.C.’s imminent and idiotic requirement that day care employees have bachelor’s degrees, should be welcome. And our ultralow fertility rate remains a long-term problem, further fueling our projected debt crisis, exacerbating our incoming entitlement insolvency and baseline national security vulnerability. But in the short term, our economic output per capita is being primarily hamstrung by middle-aged boomers deciding to retire early rather than a minority of mothers choosing to parent full time instead of work for pay during a finite season of life.