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‘Nobody Wants to Work Anymore’: Lifetime Wage Experiences and the Decline of Male LFP in the United States

Author

Listed:
  • Remy Levin

    (University of Connecticut)

  • Daniela Vidart

    (University of Connecticut)

Abstract

Male labor force participation (MLFP) has declined sharply over the past 50 years in the United States. We show that a key driver of this decline is changes in mens’ beliefs about the returns to work, shaped by their lifetime experiences of aggregate male wages. Using PSID data tracking individual labor histories linked to state-level real male wage time series, we find that prime-age MLFP increases with the average male wage in a man’s state of birth over his lifetime, even after controlling for current labor market conditions and a host of fixed effects and covariates. A one standard deviation increase in the average experienced aggregate lifetime hourly wage—corresponding to $0.33 and comparable to the difference in 2000 between being born in 1970 in Louisiana and Texas—raises the probability of labor force participation by 10 percentage points. These effects persist for men who migrate and are stronger when restricting to samerace wages. Our findings suggest that lifetime wage experiences shape long-term beliefs about work, generating lasting spillovers from labor demand to labor supply.

Suggested Citation

  • Remy Levin & Daniela Vidart, 2025. "‘Nobody Wants to Work Anymore’: Lifetime Wage Experiences and the Decline of Male LFP in the United States," Working papers 2025-02, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2025-02
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    References listed on IDEAS

    as
    1. Nicole Maestas & Kathleen J. Mullen & Alexander Strand, 2013. "Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt," American Economic Review, American Economic Association, vol. 103(5), pages 1797-1829, August.
    2. Ulrike Malmendier & Stefan Nagel, 2011. "Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 373-416.
    3. Ulrike Malmendier & Stefan Nagel, 2016. "Learning from Inflation Experiences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 53-87.
    4. Katharine G. Abraham & Melissa S. Kearney, 2020. "Explaining the Decline in the US Employment-to-Population Ratio: A Review of the Evidence," Journal of Economic Literature, American Economic Association, vol. 58(3), pages 585-643, September.
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    More about this item

    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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