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Employment growth and labor force participation: how many jobs are enough?

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Abstract

This paper demonstrates that, because of declining labor force participation rates, the usual estimates of job creation needed to keep unemployment in check are too high. It is estimated that only 98,000 jobs (rather than the usual goal of 150,000 jobs) need to be created per month to absorb the growing labor force. As the population ages, the labor force will grow even more slowly, and the number of jobs that need to be created will decline. This paper explores the potential implication of this decline in labor force growth on total output along with potential sources of replacement labor to fuel desired growth in the gross domestic product (GDP).

Suggested Citation

  • Julie L. Hotchkiss, 2004. "Employment growth and labor force participation: how many jobs are enough?," FRB Atlanta Working Paper 2004-25, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2004-25
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    References listed on IDEAS

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    1. Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc.
    2. J. Ignacio Conde-Ruiz & Vincenzo Galasso, 2003. "Early Retirement," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 12-36, January.
    3. H. Naci Mocan & Stephen C. Billups & Jody Overland, 2005. "A Dynamic Model of Differential Human Capital and Criminal Activity," Economica, London School of Economics and Political Science, vol. 72(288), pages 655-681, November.
    4. Jonathan Gruber & David Wise, 1997. "Social Security Programs and Retirement Around the World: Introduction and Summary of Papers by..," NBER Working Papers 6134, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Ivan O. KITOV, 2008. "The Driving Force of Labor Force Participation in Developed Countries," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(3(5)_Fall), pages 203-222.
    2. Heather Boushey, 2008. "“Opting out?” The effect of children on women's employment in the United States," Feminist Economics, Taylor & Francis Journals, vol. 14(1), pages 1-36.
    3. Julie L. Hotchkiss & Myriam Quispe‐Agnoli & Fernando Rios‐Avila, 2015. "The wage impact of undocumented workers: Evidence from administrative data," Southern Economic Journal, John Wiley & Sons, vol. 81(4), pages 874-906, April.
    4. Julie L. Hotchkiss & Myriam Quispe-Agnoli, 2008. "The labor market experience and impact of undocumented workers," FRB Atlanta Working Paper 2008-07, Federal Reserve Bank of Atlanta.
    5. Christopher L. ERICKSON & Daniel J.B. MITCHELL, 2007. "Monopsony as a metaphor for the emerging post-union labour market," International Labour Review, International Labour Organization, vol. 146(3-4), pages 163-187, September.
    6. Riccardo DiCecio & Kristie M. Engemann & Michael T. Owyang & Christopher H. Wheeler, 2008. "Changing trends in the labor force: a survey," Review, Federal Reserve Bank of St. Louis, vol. 90(Jan), pages 47-62.
    7. Julie L. Hotchkiss & Myriam Quispe-Agnoli & Fernando Rios-Avila, 2012. "The wage impact of undocumented workers," FRB Atlanta Working Paper 2012-04, Federal Reserve Bank of Atlanta.
    8. Ashley Hodgson & Stacey L. Schreft & Aarti Singh, 2005. "Jobless recoveries and the wait-and-see hypothesis," Economic Review, Federal Reserve Bank of Kansas City, vol. 90(Q IV), pages 81-99.

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