Factcheck: "discouraged workers" hardly the only factor of th low labor participation

[pinqy]

It is hysterical watching your unintended irony in calling people ignorant when you don't have a clue what you're talking about.

I honestly believe you are stupid enough to think you can bluff your way out of ignorance.

You can't and you've already demonstrated abject ignorance as to how the BLS collects their data.

You have also failed miserably in demonstrating their 6 million figure of people not in the workforce who want to work, out of 92 million total who are not in the workforce, is not accurate.

Basically, you're just a miserable failure.

Says the guy who couldn't interpret a stat to save his life.
Yeah, the truth remains: people aren't looking for jobs because the Obama economy has everyone so discouraged they'd rather reture early, go on disability, or just give up. Truth.

I missed where you presented any evidence for this. The BLS numbers don't support that at all You've argued that BLS doesn't ask every single person, but 60,000 households is far more than you've asked. The margin of error for Not in the Labor Force is about +/- 0.6% and about +/- 2% for Not in the Labor Force, Want a Job Now. Not even close to your unsupported claims.

 

[oldfart]

The other two chief reasons are more people going on disability and more baby boomers retiring. Not only that, but the decline in participation began before Obama came into office.

Obama?s Numbers (January 2014 Update)


The reality is that over 3 million new jobs have been added to the economy (net job creation. 8 million jobs in total created since he came into office). 2.5 million of those jobs are directly related to the Recovery Act. Altogether 2.5x more jobs have been created in his 5 years than the previous 8.

OK, a couple of comments here. The increased number of disability claims approved in a downturn is a predictable and predicted (by BLS) phenomena. In the first two years it hit about 1.1 million above trend and has leveled off at about 1.7 million over trend line. These are not people who suddenly became disabled, the rate of medically disabled people is about the same. In a tight labor market, many of them find jobs and prefer to work. In bad times they retire and take disability they have been entitled to, often for several years. Most disabled (not counting veterans) are over 55 so they will not be on disability for extended periods. We have reached an equilibrium where the number of newly disabled is about equal to the number of disabled who age out into retirement benefits.

A similar effect can be applied to normal and early retirement; when jobs are plentiful people tend to hang on a few more years.

Now the aging demographic can be adjusted. BLS published employment to population ratios for age groups. Based on this alone, the overall employment to population ratio would have increased 0.3% over the last five years, which is a lot.

The last time I mentioned this, it became apparent that there are a few posters who cannot get their brain around the concept of age-adjusted population statistics, but if you are curious, I can walk through an example.

The most recent BLS estimate of the loss of jobs due to the Lesser Depression is a bit over 5 million. My estimate based on the BLS numbers was 5,160,000 so I think that's "close enough for government work" in statistical parlance.

A final note. It depends on what you consider an appropriate benchmark to compare recent numbers to. I don't see 2007 as an overheated labor market, we had plenty of room for more employment then and no sign of labor market inflation. So IMHO all of this understates how bad the job situation is compared to a non-inflationary high growth goal. The production gap is enormous. But as we continue austerity style programs this will change; year by year we are destroying our productive capacity, as physical capital public and private deteriorates and human capital obsolesces and eventually dies out. Our production gap is closing, not by us producing more, but by our productive capacity declining.

 

[pinqy]

Now the aging demographic can be adjusted.

For what purpose?

BLS published employment to population ratios for age groups. Based on this alone, the overall employment to population ratio would have increased 0.3% over the last five years, which is a lot.

Would have if what? Under what circumstances?

The last time I mentioned this, it became apparent that there are a few posters who cannot get their brain around the concept of age-adjusted population statistics, but if you are curious, I can walk through an example.

Because their' s no point to it. There's a reason statistical agencies don't use "age-adjusted population statistics in regular publications. But I'd love an example of your use and an explanation of why?

The most recent BLS estimate of the loss of jobs due to the Lesser Depression is a bit over 5 million. My estimate based on the BLS numbers was 5,160,000 so I think that's "close enough for government work" in statistical parlance.

Ummm if BLS did an estimate (a link would be nice as I'm not sure what specific data set you're using), then why would you do your own estimate?

 

[oldfart]

Now the aging demographic can be adjusted.

For what purpose?

To determine how much of the increase in the empoyment-population ratio is due to shifts in age distribution (an exogenous variable in the labor market) and how much is due to endogenous variables, like the availability of jobs. Do you have an alternative way to measure this?

BLS published employment to population ratios for age groups. Based on this alone, the overall employment to population ratio would have increased 0.3% over the last five years, which is a lot.

Would have if what? Under what circumstances?

I'll give it another try. If the age distribution of the population in 2013 was the same as in 2007, and the employment to population ratio for each age group within the population remained the same, then the employment to population ratio for the country as a whole would remain the same. If the population in 2013 was distributed as it was and the employment to population ratio for each age group remained the same as it was in 2007, the overall employment to population ratio would have been 0.3% lower.

The last time I mentioned this, it became apparent that there are a few posters who cannot get their brain around the concept of age-adjusted population statistics, but if you are curious, I can walk through an example.

Because their' s no point to it. There's a reason statistical agencies don't use "age-adjusted population statistics in regular publications. But I'd love an example of your use and an explanation of why?

I am not responsible for your ignorance. Try U.S. Bureau of Labor Statistics and you will find a listing of tables by age group, as well as gender and ethnicity. Where did you think youth unemployment figures came from? The age based figures have been there at least since 1926. I would call the BLS and Census Bureau "statistical agencies" that use "age-adjusted population statistics in regular publications".

Now the question is whether you have the intellectual honesty to admit you had a brain fart and made a rash comment, or whether you wish to persist in the thesis that age statistics for the labor force don't exist regardless of the fact that are continuously published.

The most recent BLS estimate of the loss of jobs due to the Lesser Depression is a bit over 5 million. My estimate based on the BLS numbers was 5,160,000 so I think that's "close enough for government work" in statistical parlance.

Ummm if BLS did an estimate (a link would be nice as I'm not sure what specific data set you're using), then why would you do your own estimate?

The source is actually the CBO using BLS statistics. It can be found here:

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44172-Baseline2.pdf

 

[pinqy]

Now the aging demographic can be adjusted.

For what purpose?

To determine how much of the increase in the empoyment-population ratio is due to shifts in age distribution (an exogenous variable in the labor market) and how much is due to endogenous variables, like the availability of jobs. Do you have an alternative way to measure this?

Nope, that's good reason, though I question whether it would work the way you think.

I'll give it another try. If the age distribution of the population in 2013 was the same as in 2007, and the employment to population ratio for each age group within the population remained the same, then the employment to population ratio for the country as a whole would remain the same.

Which would have required a 5.8% increase in employment.

If the population in 2013 was distributed as it was and the employment to population ratio for each age group remained the same as it was in 2007, the overall employment to population ratio would have been 0.3% lower.

I think you might have a typo or something in there, you seem to be setting up the same parameters but somehow reached different conclusions? How could the emo pop ratio go down if age distribution and the emp-pop ratio for each stayed the same?

I am not responsible for your ignorance.

But you are responsible for your own.

Try U.S. Bureau of Labor Statistics and you will find a listing of tables by age group, as well as gender and ethnicity.

Right…sub-sets. These sub-sets are not used to adjust the total number in any way. A sub-set is not an age adjustment. And you won't find anywhere in BLS or Census that call sub-groups "adjustments."

Where did you think youth unemployment figures came from? The age based figures have been there at least since 1926.

I never said there were no breakdowns by age, I said there are no adjustments to the population statistics based on age.

would call the BLS and Census Bureau "statistical agencies" that use "age-adjusted population statistics in regular publications".

Ok, show me how they adjust the population statistics by age.

ow the question is whether you have the intellectual honesty to admit you had a brain fart and made a rash comment, or whether you wish to persist in the thesis that age statistics for the labor force don't exist regardless of the fact that are continuously published

I never said age statistics don't exist!

An age adjustment would mean adjusting the overall number to eliminate the effect of aging. Just like seasonal adjustment is an adjustment to eliminate the effects of seasonal variation

 

[Faun]

It is hysterical watching your unintended irony in calling people ignorant when you don't have a clue what you're talking about.

I honestly believe you are stupid enough to think you can bluff your way out of ignorance.

You can't and you've already demonstrated abject ignorance as to how the BLS collects their data.

You have also failed miserably in demonstrating their 6 million figure of people not in the workforce who want to work, out of 92 million total who are not in the workforce, is not accurate.

Basically, you're just a miserable failure.

Says the guy who couldn't interpret a stat to save his life.
Yeah, the truth remains: people aren't looking for jobs because the Obama economy has everyone so discouraged they'd rather reture early, go on disability, or just give up. Truth.

Your ignorance knows no boundaries

People who retire or go onto disability because they want to work but can't find a job fall into the bucket of not in the labor force but wants a job.

They are included in the 6 million folks I mentioned earlier who left the workforce but still want a job. That doesn't make that 6 million figure any higher, shvantz.

 

[Faun]

The other two chief reasons are more people going on disability and more baby boomers retiring. Not only that, but the decline in participation began before Obama came into office.

Obama?s Numbers (January 2014 Update)


The reality is that over 3 million new jobs have been added to the economy (net job creation. 8 million jobs in total created since he came into office). 2.5 million of those jobs are directly related to the Recovery Act. Altogether 2.5x more jobs have been created in his 5 years than the previous 8.

OK, a couple of comments here. The increased number of disability claims approved in a downturn is a predictable and predicted (by BLS) phenomena. In the first two years it hit about 1.1 million above trend and has leveled off at about 1.7 million over trend line. These are not people who suddenly became disabled, the rate of medically disabled people is about the same. In a tight labor market, many of them find jobs and prefer to work. In bad times they retire and take disability they have been entitled to, often for several years. Most disabled (not counting veterans) are over 55 so they will not be on disability for extended periods. We have reached an equilibrium where the number of newly disabled is about equal to the number of disabled who age out into retirement benefits.

A similar effect can be applied to normal and early retirement; when jobs are plentiful people tend to hang on a few more years.

Now the aging demographic can be adjusted. BLS published employment to population ratios for age groups. Based on this alone, the overall employment to population ratio would have increased 0.3% over the last five years, which is a lot.

The last time I mentioned this, it became apparent that there are a few posters who cannot get their brain around the concept of age-adjusted population statistics, but if you are curious, I can walk through an example.

The most recent BLS estimate of the loss of jobs due to the Lesser Depression is a bit over 5 million. My estimate based on the BLS numbers was 5,160,000 so I think that's "close enough for government work" in statistical parlance.

A final note. It depends on what you consider an appropriate benchmark to compare recent numbers to. I don't see 2007 as an overheated labor market, we had plenty of room for more employment then and no sign of labor market inflation. So IMHO all of this understates how bad the job situation is compared to a non-inflationary high growth goal. The production gap is enormous. But as we continue austerity style programs this will change; year by year we are destroying our productive capacity, as physical capital public and private deteriorates and human capital obsolesces and eventually dies out. Our production gap is closing, not by us producing more, but by our productive capacity declining.

You grossly underestimate the impact of the Great Recession on the job market, which was causing a net loss of jobs until February of 2010. During that period, there were about 7.5 million jobs lost.

Unemployment (7,476,000 jobs lost)
12/07 ..... 7,645,000
02/10 ... 15,121,000

Bureau of Labor Statistics Data

Also, that 7.5 million figure is based on U3 figures. Using U6 factors such as including discouraged workers and part-timers who want to work full-time but can't find a full-time job -- and the number of jobs lost from the Great Recession swells to well over 11 million .

 

[pinqy]

The other two chief reasons are more people going on disability and more baby boomers retiring. Not only that, but the decline in participation began before Obama came into office.

Obama?s Numbers (January 2014 Update)


The reality is that over 3 million new jobs have been added to the economy (net job creation. 8 million jobs in total created since he came into office). 2.5 million of those jobs are directly related to the Recovery Act. Altogether 2.5x more jobs have been created in his 5 years than the previous 8.

OK, a couple of comments here. The increased number of disability claims approved in a downturn is a predictable and predicted (by BLS) phenomena. In the first two years it hit about 1.1 million above trend and has leveled off at about 1.7 million over trend line. These are not people who suddenly became disabled, the rate of medically disabled people is about the same. In a tight labor market, many of them find jobs and prefer to work. In bad times they retire and take disability they have been entitled to, often for several years. Most disabled (not counting veterans) are over 55 so they will not be on disability for extended periods. We have reached an equilibrium where the number of newly disabled is about equal to the number of disabled who age out into retirement benefits.

A similar effect can be applied to normal and early retirement; when jobs are plentiful people tend to hang on a few more years.

Now the aging demographic can be adjusted. BLS published employment to population ratios for age groups. Based on this alone, the overall employment to population ratio would have increased 0.3% over the last five years, which is a lot.

The last time I mentioned this, it became apparent that there are a few posters who cannot get their brain around the concept of age-adjusted population statistics, but if you are curious, I can walk through an example.

The most recent BLS estimate of the loss of jobs due to the Lesser Depression is a bit over 5 million. My estimate based on the BLS numbers was 5,160,000 so I think that's "close enough for government work" in statistical parlance.

A final note. It depends on what you consider an appropriate benchmark to compare recent numbers to. I don't see 2007 as an overheated labor market, we had plenty of room for more employment then and no sign of labor market inflation. So IMHO all of this understates how bad the job situation is compared to a non-inflationary high growth goal. The production gap is enormous. But as we continue austerity style programs this will change; year by year we are destroying our productive capacity, as physical capital public and private deteriorates and human capital obsolesces and eventually dies out. Our production gap is closing, not by us producing more, but by our productive capacity declining.

You grossly underestimate the impact of the Great Recession on the job market, which was causing a net loss of jobs until February of 2010. During that period, there were about 7.5 million jobs lost.

Unemployment (7,476,000 jobs lost)
12/07 ..... 7,645,000
02/10 ... 15,121,000

Bureau of Labor Statistics Data

Also, that 7.5 million figure is based on U3 figures. Using U6 factors such as including discouraged workers and part-timers who want to work full-time but can't find a full-time job -- and the number of jobs lost from the Great Recession swells to well over 11 million .

Whoa......Unemployment is not "jobs lost." Someone can enter the labor force as unemployed.

Jobs lost is usually measured by change in the Current Employment Statistics, a survey of non-farm payroll jobs (a survey of businesses). This is a seperate survey from the Current Population Survey, used to collect unemployment information. If you want to compare to unemployment, you can use the total employment data from the CPS, but, while more inclusive, is less accurate than the CES

You ar correct about the timing....jobs were at their high in December 2007 and at their low point in February 2010. Choose series CES0000000001 at BLS Series Report : U.S. Bureau of Labor Statistics to see the non-farm payroll job levels.

In Dec 2007 there were 138,042,000 jobs.
In February 2010, there were 129,320,000
Change of -8,722,000

 

[oldfart]

I never said age statistics don't exist!

An age adjustment would mean adjusting the overall number to eliminate the effect of aging. Just like seasonal adjustment is an adjustment to eliminate the effects of seasonal variation

OK, I misinterpreted your point and for that I apologize.

I was scrambling through my notes looking for demographic adjustments in labor market data (without much success; I used to be a labor economist so there is a lot of shit to go through, and I may tend to think that some of the stuff I look at is more mainstream and available than it actually is). I broke to check Krugman's column, and there was a post from the New York Fed exactly on subject which he was trashing. I'll give Krugman a detailed read when he gets around to modeling this one better, but for now I agree with the NY Fed. Their methodology and mine are completely different and their outcome is double mine, but both are a lot closer to each other than to Krugman.

Here's the blog post (Emphasis mine):

February 03, 2014

A Mis-Leading Labor Market Indicator

Samuel Kapon and Joseph Tracy

The unemployment rate is a popular measure of the condition of the labor market. With the Great Recession, the unemployment rate increased from a low of 4.4 percent in March 2007 to a peak of 10.0 percent in October 2009. As the economy recovered and growth resumed, the unemployment rate has fallen to 6.7 percent. What other measures are useful to supplement our understanding of the degree of the labor market recovery?

The employment-population (E/P) ratio frequently is used as an additional labor market measure. The E/P ratio is defined as the number of employed divided by the size of the working-age, noninstitutionalized population. An advantage of the E/P ratio over the unemployment rate is that it is not impacted by discouraged workers who stop looking for employment. The E/P ratio also dominates a measure focusing just on total employment in the economy, since it adjusts for changes in the size of the working-age population. The chart below shows the E/P ratio since 2001. The gray shading represents time periods when the economy was in a recession. Over the Great Recession, the E/P ratio (red line) declined by 4.1 percentage points relative to the average of the E/P ratio over the prior expansion (blue line). Since the end of the recession, the E/P ratio has largely remained constant—that is, virtually none of the decline in the E/P ratio from the Great Recession has been recovered to date. An implication is that the 7.6 million jobs added since the trough of employment in February 2010 has essentially just kept pace with growth in the working-age population.

In its failure to recover, the E/P ratio would seem to depict a much weaker labor market than indicated by the unemployment rate. An important question is whether this is a correct or a misleading characterization of the degree of the labor market recovery. While the E/P ratio is not affected by discouraged workers, it still is impacted by changing demographics in the economy. The employment rate profile over a worker’s career has an inverted U-shape, with rising employment rates until a worker reaches her mid-30s to mid-40s, then leveling off and declining in her 50s with sharp drops at 62 and 65. The effect of population aging on the E/P ratio depends on the distribution of individuals in the economy across the rising and falling sections of their career employment rate profiles. The earlier observation that no progress has been made in closing the E/P gap opened up by the Great Recession assumes that, in the absence of the recession, the E/P ratio would have remained relatively constant at the level indicated by the blue line in the chart. However, it is important to check this assumption by estimating the impact of changing demographics on the E/P ratio.

To explore this question, we take all individuals age sixteen or older from the Current Population Survey Outgoing Rotation Group samples from January 1982 to November 2013. This gives us monthly data with 10.2 million observations on individuals and their employment status. We divide these individuals into 280 different cohorts defined by each individual’s decade of birth, sex, race/ethnicity, and educational attainment. We assume that individuals within a specific cohort have similar career employment rate profiles. We use the 10.2 million observations to estimate these 280 career employment rate profiles. The next chart shows five of these estimated profiles for white non-Hispanic men born between 1950 and 1959 by five levels of education.

This depiction shows both the inverted U-shape for employment rate profiles and that individuals with more education tend to have higher employment rates at each age. We would expect that when the labor market is tight (slack) that average employment rates would be higher (lower) than indicated by our estimated profiles. When we estimate these 280 career employment rate profiles, we remove any of these business-cycle effects by including in the estimation a full set of year effects. We allow these business-cycle effects on employment rates to differ between men and women.

We now can assess the implications of changing population demographics on the E/P ratio. We use the 280 estimated career employment rate profiles to create a demographically adjusted E/P ratio in the following manner. For each of the 10.2 million individuals in our sample, based on their decade of birth, sex, race/ethnicity, and education, we select one of our 280 estimated career employment rate profiles. Using the worker’s age, we calculate the predicted employment rate for that individual based on their selected employment rate profile. We then calculate the weighted average of these predicted employment rates across all individuals in a given time period to generate an estimated E/P ratio for that time period. We repeat this exercise for each time period covered by our data. Finally, we seasonally adjust this estimated E/P ratio. The result is our demographically adjusted E/P ratio since it controls for changes over time both in the composition of individuals between the 280 cohorts, as well as aging of individuals within each cohort.

To overlay our demographically adjusted E/P ratio with the actual E/P ratio, we need to adopt a normalization. Recall that we eliminated business-cycle effects in the estimation by including a full set of year effects. A consequence is that there is no overall intercept for our demographically adjusted E/P ratio—only variations over time. To determine an intercept, we adopt the normalization that over the thirty-one years in our data sample any business-cycle deviations between the actual and the adjusted E/P ratios will average to zero. The next chart shows the overlay of the actual E/P ratio (in red) and our normalized, demographically adjusted E/P ratio (in blue). The demographically adjusted E/P ratio peaked in the mid-1990s and has been slowly declining since then. Importantly, from the beginning of the Great Recession to November 2013, the demographically adjusted E/P ratio has declined by 1.7 percentage points. This result indicates that although the actual E/P ratio has not changed since the end of the recession, the E/P gap defined as the difference between the two lines is actually closing due to this decline in the demographically adjusted E/P ratio. That is, a relatively constant E/P ratio since the end of the recession represents improvement in the labor market relative to an underlying demographically adjusted E/P ratio that is declining. In addition, based on our normalization, the E/P ratio was 1.6 percentage points above the demographically adjusted E/P ratio just prior to the onset of the recession. This suggests that the labor market was relatively tight prior to the recession. The same pattern shows up prior to the 1990 and 2001 recessions as well.

Adjusting for changing demographics has an important impact on the picture that emerges about the degree of the labor market recovery. The actual E/P ratio suggests that the labor market has made relatively no progress since the end of the recession in recovering from the 4.1 percentage point decline in this measure. In contrast, the gap between the demographically adjusted E/P ratio using our normalization and the actual E/P ratio is a much smaller 0.7 percentage points. Different normalizations would affect the size of this remaining gap. For example, if we assume that business-cycle effects averaged to zero just prior to the last recession (as opposed to over our full sample), then the actual E/P ratio would have been 1.4 (as opposed to 1.6) percentage points above the demographically adjusted E/P ratio at the outset of the Great Recession. In this case, the remaining gap increases from 0.7 to 0.9 percentage points. With either normalization, the basic conclusion is that the E/P gap is much smaller than it would appear making no adjustments (that is, using the horizontal blue line in our first chart as the reference point).

We have argued that the E/P ratio is a misleading indicator for the degree of the labor market recovery. However, the normalized, demographically adjusted E/P ratio is a useful additional gauge of labor market conditions. It is important to control for changing demographic factors when looking at the behavior of the E/P ratio over time. This step is particularly important today when these demographic factors are exerting downward pressure on the actual E/P rate, suggesting that the recent lack of improvement in the E/P ratio does not imply a lack of progress in the labor market. The adjusted E/P rate corroborates the basic picture from the unemployment rate that the labor market has been recovering over the past few years, but that it still has a ways to go to reach a full recovery.

Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Kapon_samuel
Samuel Kapon is a senior research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

Tracy_joseph
Joseph Tracy is an executive vice president and senior advisor to the Bank president at the Federal Reserve Bank of New York.

Source: http://libertystreeteconomics.newyorkfed.org/2014/02/a-mis-leading-labor-market-indicator.html

 

[pinqy]

I never said age statistics don't exist!

An age adjustment would mean adjusting the overall number to eliminate the effect of aging. Just like seasonal adjustment is an adjustment to eliminate the effects of seasonal variation

OK, I misinterpreted your point and for that I apologize.

We definitely had some miscommunication going. I thought you were saying that BLS adjusted their data to account for aging. Which is nonsense.

was scrambling through my notes looking for demographic adjustments in labor market data (without much success; I used to be a labor economist so there is a lot of shit to go through, and I may tend to think that some of the stuff I look at is more mainstream and available than it actually is).

And I was an economist at BLS. It seems now you weren't talking about regular publications, but special studies to isolate specific effects. That wasn't clear to me, though I don't know if that was you, me, or both.

I broke to check Krugman's column, and there was a post from the New York Fed exactly on subject which he was trashing. I'll give Krugman a detailed read when he gets around to modeling this one better, but for now I agree with the NY Fed. Their methodology and mine are completely different and their outcome is double mine, but both are a lot closer to each other than to Krugman.

Did you already link to Krugman?

Here's the blog post (Emphasis mine)

Source: A Mis-Leading Labor Market Indicator - Liberty Street Economics[/QUOTE]
Interesting. I'll have to read it more thoroughly, but I find no flaws in the work. They had access to non-public BLS data (getting the data in detail from the outgoing rotation of the CPS. Not surprising since they are former colleagues of the Commissioner, though they'd still have to follow all the rules.

 

[oldfart]

We definitely had some miscommunication going. I thought you were saying that BLS adjusted their data to account for aging. Which is nonsense.

I think we lost everyone in the wonkfest, but that's OK. I agree that BLS does not adjust any time series labor force data for age distribution, but obviously Census would. I originally got the adjustment from a CBO update on their baseline economic model and assumptions. They have a long range (75 year) population model, mainly for looking at the SSA trust funds. I know about the BLS occasional research reports, but I can't remember one on this topic. I also find it strange that the Fed study would be out of New York; Fed labor market studies tend to come from other FR banks (a lot come from Dallas I believe).

And I was an economist at BLS. It seems now you weren't talking about regular publications, but special studies to isolate specific effects. That wasn't clear to me, though I don't know if that was you, me, or both.

Small world. I got into labor force studies by dealing with the Soviet Census. I also had a couple gigs as an expert witness in employment discrimination cases in the early 70s. I used to have a complete set of the paper Monthly Labor Review before it was on the internet, about 1968--1985. Pitched 'em in a move about 12 years ago (sniff, sniff).

Interesting. I'll have to read it more thoroughly, but I find no flaws in the work. They had access to non-public BLS data (getting the data in detail from the outgoing rotation of the CPS. Not surprising since they are former colleagues of the Commissioner, though they'd still have to follow all the rules.

So why don't they simply publish a regression analysis if they have access to all that data?

 

[edthecynic]

OK, a couple of comments here. The increased number of disability claims approved in a downturn is a predictable and predicted (by BLS) phenomena. In the first two years it hit about 1.1 million above trend and has leveled off at about 1.7 million over trend line. These are not people who suddenly became disabled, the rate of medically disabled people is about the same. In a tight labor market, many of them find jobs and prefer to work. In bad times they retire and take disability they have been entitled to, often for several years. Most disabled (not counting veterans) are over 55 so they will not be on disability for extended periods. We have reached an equilibrium where the number of newly disabled is about equal to the number of disabled who age out into retirement benefits.

Where do you wing-nuts get this bullshit??? The number of awards per insured has been declining since 2010.

How can AWARDS be 1.1 to 1.7 million OVER trend when the total awards are barely 1 million per year???

Disabled-worker data: applications & awards

 

[oldfart]

OK, a couple of comments here. The increased number of disability claims approved in a downturn is a predictable and predicted (by BLS) phenomena. In the first two years it hit about 1.1 million above trend and has leveled off at about 1.7 million over trend line. These are not people who suddenly became disabled, the rate of medically disabled people is about the same. In a tight labor market, many of them find jobs and prefer to work. In bad times they retire and take disability they have been entitled to, often for several years. Most disabled (not counting veterans) are over 55 so they will not be on disability for extended periods. We have reached an equilibrium where the number of newly disabled is about equal to the number of disabled who age out into retirement benefits.

Where do you wing-nuts get this bullshit??? The number of awards per insured has been declining since 2010.

How can AWARDS be 1.1 to 1.7 million OVER trend when the total awards are barely 1 million per year???

Disabled-worker data: applications & awards

The numbers came from a BLS study in 2010, which I archived somewhere. Unlike the SSA numbers you cited, it looks at the total number on disability, not the number of new claims. The number of awards would drop off by the third year of a downturn. The usual way to measure downturns and recoveries is to plot data against number of months from the beginning of the downturn, and the trend line is just a smoothed average of earlier downturns. By this point in the average downturn, employment would have surpassed the previous peak a couple of years ago and effects such as disability claims would have disappeared.

So the SSA data is not inconsistent with the BLS/CBO analysis, the first is a report of raw numbers and the second is a comparison to previous downturns.

 

[edthecynic]

OK, a couple of comments here. The increased number of disability claims approved in a downturn is a predictable and predicted (by BLS) phenomena. In the first two years it hit about 1.1 million above trend and has leveled off at about 1.7 million over trend line. These are not people who suddenly became disabled, the rate of medically disabled people is about the same. In a tight labor market, many of them find jobs and prefer to work. In bad times they retire and take disability they have been entitled to, often for several years. Most disabled (not counting veterans) are over 55 so they will not be on disability for extended periods. We have reached an equilibrium where the number of newly disabled is about equal to the number of disabled who age out into retirement benefits.

Where do you wing-nuts get this bullshit??? The number of awards per insured has been declining since 2010.

How can AWARDS be 1.1 to 1.7 million OVER trend when the total awards are barely 1 million per year???

Disabled-worker data: applications & awards

The numbers came from a BLS study in 2010, which I archived somewhere. Unlike the SSA numbers you cited, it looks at the total number on disability, not the number of new claims. The number of awards would drop off by the third year of a downturn. The usual way to measure downturns and recoveries is to plot data against number of months from the beginning of the downturn, and the trend line is just a smoothed average of earlier downturns. By this point in the average downturn, employment would have surpassed the previous peak a couple of years ago and effects such as disability claims would have disappeared.

So the SSA data is not inconsistent with the BLS/CBO analysis, the first is a report of raw numbers and the second is a comparison to previous downturns.

IOW, you have no source and your numbers are complete bullshit but you are not honest enough to admit it.

The previous peak was during the Bush Regime from 2002 to 2005, BEFORE the Bush Depression! Awards increased every year of the Bush Regime and are declining now. Does that mean that every year of the Bush Regime was a recession?

Admit it, your "source" is GOP hate radio who told you people flocked to disability because they could not find jobs and you swallowed the lie.

Disabled-worker statistics

 

[oldfart]

CBO had five major related studies out yesterday and it's going to take me a while to go over all of them. They are updating all of their economic projections. One is about reasons for the slow recovery in the labor market, which I think is intersting in regard to this thread.

Of the roughly 2 percentage-point net increase in the rate of unemployment between the end of 2007 and the end of 2013, about 1 percentage point was the result of cyclical weakness in the demand for goods and services, and about 1 percentage point arose from structural factors; those factors are chiefly the stigma workers face and the erosion of skills that can stem from long-term unemployment (together worth about one-half of a percentage point of increase in the unemployment rate) and a decrease in the efficiency with which employers are filling vacancies (probably at least in part as a result of mismatches in skills and locations, and also worth about one-half of a percentage point of the increase in the unemployment rate).

 Of the roughly 3 percentage-point net decline in the labor force participation rate between the end of 2007 and the end of 2013, about 1½ percentage points was the result of long-term trends (primarily the aging of the population), about 1 percentage point was the result of temporary weakness in employment prospects and wages, and about one-half of a percentage point was attributable to unusual aspects of the slow recovery that led workers to become discouraged and permanently drop out of the labor force.

Employment at the end of 2013 was about 6 million jobs short of where it would be if the unemployment rate had returned to its prerecession level and if the participation rate had risen to the level it would have attained without the current cyclical weakness. Those factors account roughly equally for the shortfall.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf

 

[oldfart]

Where do you wing-nuts get this bullshit??? The number of awards per insured has been declining since 2010.

How can AWARDS be 1.1 to 1.7 million OVER trend when the total awards are barely 1 million per year???

Disabled-worker data: applications & awards

The numbers came from a BLS study in 2010, which I archived somewhere. Unlike the SSA numbers you cited, it looks at the total number on disability, not the number of new claims. The number of awards would drop off by the third year of a downturn. The usual way to measure downturns and recoveries is to plot data against number of months from the beginning of the downturn, and the trend line is just a smoothed average of earlier downturns. By this point in the average downturn, employment would have surpassed the previous peak a couple of years ago and effects such as disability claims would have disappeared.

So the SSA data is not inconsistent with the BLS/CBO analysis, the first is a report of raw numbers and the second is a comparison to previous downturns.

IOW, you have no source and your numbers are complete bullshit but you are not honest enough to admit it.

The previous peak was during the Bush Regime from 2002 to 2005, BEFORE the Bush Depression! Awards increased every year of the Bush Regime and are declining now. Does that mean that every year of the Bush Regime was a recession?

Admit it, your "source" is GOP hate radio who told you people flocked to disability because they could not find jobs and you swallowed the lie.

Disabled-worker statistics

Ed, I am a member of the Mississippi Freedom Democratic Party, politically a bit to the left of Bernie Sanders, and what Krugman calls a "paleo-Keynesian". My first career was as a labor economist. I do not watch or listen to right-wing talk radio or TV. I do continue to read the professional literature and try to keep up my end of the debate.

I'm not going to argue with you because obviously you have neither the disposition nor skill set to address economic policy. Have a good life, sir; as far away from me as possible.

 

[edthecynic]

CBO had five major related studies out yesterday and it's going to take me a while to go over all of them. They are updating all of their economic projections. One is about reasons for the slow recovery in the labor market, which I think is intersting in regard to this thread.

Of the roughly 2 percentage-point net increase in the rate of unemployment between the end of 2007 and the end of 2013, about 1 percentage point was the result of cyclical weakness in the demand for goods and services, and about 1 percentage point arose from structural factors; those factors are chiefly the stigma workers face and the erosion of skills that can stem from long-term unemployment (together worth about one-half of a percentage point of increase in the unemployment rate) and a decrease in the efficiency with which employers are filling vacancies (probably at least in part as a result of mismatches in skills and locations, and also worth about one-half of a percentage point of the increase in the unemployment rate).

 Of the roughly 3 percentage-point net decline in the labor force participation rate between the end of 2007 and the end of 2013, about 1½ percentage points was the result of long-term trends (primarily the aging of the population), about 1 percentage point was the result of temporary weakness in employment prospects and wages, and about one-half of a percentage point was attributable to unusual aspects of the slow recovery that led workers to become discouraged and permanently drop out of the labor force.

Employment at the end of 2013 was about 6 million jobs short of where it would be if the unemployment rate had returned to its prerecession level and if the participation rate had risen to the level it would have attained without the current cyclical weakness. Those factors account roughly equally for the shortfall.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf

It is moronic to expect the LPR to stay level with the Boomer Generation retiring let alone projecting it to RISE!!!!

Back in its 2004 to 2014 labor force projection, the CBO projected the LPR to FALL due to the Boomers!!! The current 2011 projection shows the labor force growing slower than the population.

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/58xx/doc5803/09-15-laborforce.pdf

A second key source of uncertainty is how participation
rates for various demographic groups will evolve over
time. The pending retirement of the baby-boom genera-
tion (people born between 1946 and 1964) will tend to
reduce the overall labor force participation rate—espe-
cially in the latter half of the projection period.


http://www.cbo.gov/sites/default/fi...20xx/doc12052/03-22-laborforceprojections.pdf

The Congressional Budget Office (CBO) produces regular reports on the state of the
U.S. economy and 10-year and longer-term projections of the nation’s budget and
economic outlook. In producing those analyses, CBO examines many developments
that could have short- or longer-term cons
equences for the budget and the economy.
During the decades to come, one such developme
nt is expected to be a slower rate of
growth of the labor force relative to the av
erage growth rate of the past few decades.
That slowdown is anticipated to occur prim
arily because of the aging and retirement
of large numbers of baby boomers and because women’s participation in the labor
force has leveled off since the late 1990s after having risen substantially throughout
the three decades before that
snip/

Summary and Introduction
The labor force has increased by about 0.8 percent per year, on average, over the past
decade. That rate of growth is less than
the annual rate of 1.2 percent in the 1990s
and much lower than the 2.1 percent rate exhi
bited over the three decades before that.
Although the U.S. population has grown
by about 1.1 percent per year over the
past 10 years, the labor force participation ra
te (the percentage
of the civilian non-
institutional population age 16 years or older who are either working or actively
seeking work) has declined, reversing a long-term upward trend.
1
The Congressional Budget Office (CBO) anti
cipates that during the next decade the
U.S. labor force will grow at about the same rate, on average, as it did during the past
decade; that is, the percentage change in 2020 from 10 years earlier will be about
the same as the change was
in 2010 (see Figure
1). The labor force is projected to
increase from 153.9 million people in
2010 to 168.7 million in 2021 (see Table 1).
The aggregate rate of participation in the labor force is projected to fall from
64.7 percent in 2010 to 63.0 percent in 2021.
snip/

The second factor is the impending retirement of the
baby-boom generation (people who were
born between 1946 and 1964), which will
cause the potential labor force participation ra
te to decline throughout the next decade.
In CBO’s estimates, the effect of the second
factor outweighs the first, pushing down
the labor force participation rate, on
balance, over the next decade.

 

[oldfart]

CBO had five major related studies out yesterday and it's going to take me a while to go over all of them. They are updating all of their economic projections. One is about reasons for the slow recovery in the labor market, which I think is intersting in regard to this thread.

Of the roughly 2 percentage-point net increase in the rate of unemployment between the end of 2007 and the end of 2013, about 1 percentage point was the result of cyclical weakness in the demand for goods and services, and about 1 percentage point arose from structural factors; those factors are chiefly the stigma workers face and the erosion of skills that can stem from long-term unemployment (together worth about one-half of a percentage point of increase in the unemployment rate) and a decrease in the efficiency with which employers are filling vacancies (probably at least in part as a result of mismatches in skills and locations, and also worth about one-half of a percentage point of the increase in the unemployment rate).

 Of the roughly 3 percentage-point net decline in the labor force participation rate between the end of 2007 and the end of 2013, about 1½ percentage points was the result of long-term trends (primarily the aging of the population), about 1 percentage point was the result of temporary weakness in employment prospects and wages, and about one-half of a percentage point was attributable to unusual aspects of the slow recovery that led workers to become discouraged and permanently drop out of the labor force.

Employment at the end of 2013 was about 6 million jobs short of where it would be if the unemployment rate had returned to its prerecession level and if the participation rate had risen to the level it would have attained without the current cyclical weakness. Those factors account roughly equally for the shortfall.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf

It is moronic to expect the LPR to stay level with the Boomer Generation retiring let alone projecting it to RISE!!!!

Back in its 2004 to 2014 labor force projection, the CBO projected the LPR to FALL due to the Boomers!!! The current 2011 projection shows the labor force growing slower than the population.

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/58xx/doc5803/09-15-laborforce.pdf

A second key source of uncertainty is how participation
rates for various demographic groups will evolve over
time. The pending retirement of the baby-boom genera-
tion (people born between 1946 and 1964) will tend to
reduce the overall labor force participation rate—espe-
cially in the latter half of the projection period.


http://www.cbo.gov/sites/default/fi...20xx/doc12052/03-22-laborforceprojections.pdf

The Congressional Budget Office (CBO) produces regular reports on the state of the
U.S. economy and 10-year and longer-term projections of the nation’s budget and
economic outlook. In producing those analyses, CBO examines many developments
that could have short- or longer-term cons
equences for the budget and the economy.
During the decades to come, one such developme
nt is expected to be a slower rate of
growth of the labor force relative to the av
erage growth rate of the past few decades.
That slowdown is anticipated to occur prim
arily because of the aging and retirement
of large numbers of baby boomers and because women’s participation in the labor
force has leveled off since the late 1990s after having risen substantially throughout
the three decades before that
snip/

Summary and Introduction
The labor force has increased by about 0.8 percent per year, on average, over the past
decade. That rate of growth is less than
the annual rate of 1.2 percent in the 1990s
and much lower than the 2.1 percent rate exhi
bited over the three decades before that.
Although the U.S. population has grown
by about 1.1 percent per year over the
past 10 years, the labor force participation ra
te (the percentage
of the civilian non-
institutional population age 16 years or older who are either working or actively
seeking work) has declined, reversing a long-term upward trend.
1
The Congressional Budget Office (CBO) anti
cipates that during the next decade the
U.S. labor force will grow at about the same rate, on average, as it did during the past
decade; that is, the percentage change in 2020 from 10 years earlier will be about
the same as the change was
in 2010 (see Figure
1). The labor force is projected to
increase from 153.9 million people in
2010 to 168.7 million in 2021 (see Table 1).
The aggregate rate of participation in the labor force is projected to fall from
64.7 percent in 2010 to 63.0 percent in 2021.
snip/

The second factor is the impending retirement of the
baby-boom generation (people who were
born between 1946 and 1964), which will
cause the potential labor force participation ra
te to decline throughout the next decade.
In CBO’s estimates, the effect of the second
factor outweighs the first, pushing down
the labor force participation rate, on
balance, over the next decade.

Ed , if you bother to check my source, you will find that CBO has updated the two year old statistics you have posted.

 

[edthecynic]

CBO had five major related studies out yesterday and it's going to take me a while to go over all of them. They are updating all of their economic projections. One is about reasons for the slow recovery in the labor market, which I think is intersting in regard to this thread.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf

It is moronic to expect the LPR to stay level with the Boomer Generation retiring let alone projecting it to RISE!!!!

Back in its 2004 to 2014 labor force projection, the CBO projected the LPR to FALL due to the Boomers!!! The current 2011 projection shows the labor force growing slower than the population.

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/58xx/doc5803/09-15-laborforce.pdf

A second key source of uncertainty is how participation
rates for various demographic groups will evolve over
time. The pending retirement of the baby-boom genera-
tion (people born between 1946 and 1964) will tend to
reduce the overall labor force participation rate—espe-
cially in the latter half of the projection period.


http://www.cbo.gov/sites/default/fi...20xx/doc12052/03-22-laborforceprojections.pdf

The Congressional Budget Office (CBO) produces regular reports on the state of the
U.S. economy and 10-year and longer-term projections of the nation’s budget and
economic outlook. In producing those analyses, CBO examines many developments
that could have short- or longer-term cons
equences for the budget and the economy.
During the decades to come, one such developme
nt is expected to be a slower rate of
growth of the labor force relative to the av
erage growth rate of the past few decades.
That slowdown is anticipated to occur prim
arily because of the aging and retirement
of large numbers of baby boomers and because women’s participation in the labor
force has leveled off since the late 1990s after having risen substantially throughout
the three decades before that
snip/

Summary and Introduction
The labor force has increased by about 0.8 percent per year, on average, over the past
decade. That rate of growth is less than
the annual rate of 1.2 percent in the 1990s
and much lower than the 2.1 percent rate exhi
bited over the three decades before that.
Although the U.S. population has grown
by about 1.1 percent per year over the
past 10 years, the labor force participation ra
te (the percentage
of the civilian non-
institutional population age 16 years or older who are either working or actively
seeking work) has declined, reversing a long-term upward trend.
1
The Congressional Budget Office (CBO) anti
cipates that during the next decade the
U.S. labor force will grow at about the same rate, on average, as it did during the past
decade; that is, the percentage change in 2020 from 10 years earlier will be about
the same as the change was
in 2010 (see Figure
1). The labor force is projected to
increase from 153.9 million people in
2010 to 168.7 million in 2021 (see Table 1).
The aggregate rate of participation in the labor force is projected to fall from
64.7 percent in 2010 to 63.0 percent in 2021.
snip/

The second factor is the impending retirement of the
baby-boom generation (people who were
born between 1946 and 1964), which will
cause the potential labor force participation ra
te to decline throughout the next decade.
In CBO’s estimates, the effect of the second
factor outweighs the first, pushing down
the labor force participation rate, on
balance, over the next decade.

Ed , if you bother to check my source, you will find that CBO has updated the two year old statistics you have posted.

Actually, I did look at your source and found essentially the same thing.

From your link:

Labor Force Participation
CBO projects that the labor force participation rate,
which averaged 62.9 percent in the fourth quarter of
2013, will be at the same level, on average, in 2014 but
will fall to 62.5 percent by the end of 2017 and to
60.8 percent by the end of 2024 (see Figure 11).
For 2014 to 2017, CBO anticipates that many of the
people who left the labor force because of a lack of job
opportunities will return as labor market conditions
improve and that the number of people who stay out
of the labor force (for example, to attend school) will
diminish. However, CBO expects, the cyclical recovery in
participation will be more than offset by the downward
pressure on participation stemming from other changes.
The most significant effect will come from the aging of
the population (and other demographic changes)