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Education, employment, and labor force participation in the United States

Author

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  • Jamie Emerson

    (Salisbury University)

Abstract

This paper uses time series data from the United States to investigate the relationship between the employment-population ratio and labor force participation rates for various education levels: (1) Bachelor's Degree and Higher, (2) Some College or Associate Degree, (3) High School Graduates, and (4) Less Than a High School Diploma. Cointegration analysis supports a long-run relationship between these two variables, for each education level considered. Vector error correction models are estimated for the period prior to the COVID-19 pandemic. These pre-pandemic models are then used to create dynamic forecasts since the start of the COVID-19 pandemic. The pre-pandemic models do reasonably well at forecasting the actual values of the employment-population ratios beginning in 2022 for each education level. However, labor force participation rates for those with a high school degree or less have not yet returned to levels forecasted using pre-pandemic models.

Suggested Citation

  • Jamie Emerson, 2023. "Education, employment, and labor force participation in the United States," Economics Bulletin, AccessEcon, vol. 43(3), pages 1377-1388.
    • Handle: RePEc:ebl:ecbull:eb-23-00244
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Labor force participation; Employment-population ratio; Cointegration; Discouraged worker; Unemployment invariance hypothesis; COVID-19 pandemic;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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