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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
The Labor Force Participation Rate Trend and Its Projections
Andreas Hornstein
Marianna Kudlyak
Annemarie Schweinert
Abstract

A labor force participation rate that is at or above its long-run trend is consistent with a labor market at or above full employment. In 2018, the estimated rate is at its trend of 62.8%, suggesting that the labor market is at full employment. Studying the population’s demographic makeup and labor trends for different groups sheds some light on what is driving the aggregate participation trend and implications for the future. Projections based on these trends estimate that labor participation will decline about 2.5 percentage points over the next decade.


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Andreas Hornstein & Marianna Kudlyak & Annemarie Schweinert, "The Labor Force Participation Rate Trend and Its Projections" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 25, 2018.
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