This led to natural growth in the size of the labor force. In the past, fertility rates were high enough that the size of the birth cohort, or the group of people born during a particular period, reaching working age was significantly larger than the birth cohort reaching retirement age. One demographic trend that has slowed population growth is falling fertility rates. Population growth is another key factor that influences labor force growth. The ages at which people are most likely to retire are 62 through 65, and the percentage of the US civilian population (regardless of age) that is in this age range has steadily increased since 2000 and reached a new peak of 4.9 percent in December 2021, which is up from 4.6 percent 5 years earlier and 4.4 percent 10 years earlier. 3 The LFPR of people aged 55 and older fell from 40.3 percent in December 2019 to 38.5 percent in December 2021. The unusually large number of retirements in 20 can be attributed to both a drop in the LFPR of people aged 55 and older and the larger number of baby boomers reaching peak retirement ages.

Estimates for the number of retirements that occurred during the pandemic, above and beyond the number of retirements expected based on prepandemic trends, range from 1.5 million to 2.4 million individuals. As noted above, recent studies have highlighted the role that retirements have played in the drop in the size of the US labor force since the start of the pandemic (Briggs, 2021 Faria e Castro, 2021 and Kaplan et al., 2021). 2 The percentage of the population aged 60 and older has also increased because the large baby boom generation started reaching this age range in 2006. As life expectancies have risen, the percentage of the US population aged 60 and older, the most likely demographic to be retired, rose from 16 percent in 2000 to 24 percent in 2021. One such change the United States is experiencing is the aging of the population, a circumstance which has increased the share of the population that is retired. Changes in the demographic makeup of the populationīecause different demographic groups have different LFPRs, the size of the labor force is affected by changes in the demographic composition of the population. The LFPR fell sharply during the COVID-19 pandemic and has been slow to recover, falling from 63.3 percent to 61.5 percent between December 2019 and December 2020 and then rising to 61.9 percent in December 2021. 1The decline in the LFPR in recent decades has been a widespread phenomenon, with rates declining for most races, ethnicities, age groups, and educational attainment groups (Dotsey, Fujita, and Rudanko, 2017). However, women’s LFPR peaked in 2000, and the overall LFPR for both men and women has trended downward since. Between 19, this decline was offset by increases in women’s LFPR. Men’s LFPR has drifted downward since 1950, for instance. Changes in the labor force participation rate

Unless otherwise indicated, when we refer to the population or labor force, we are referring to people who are neither institutionalized nor in the military (which is called the non-institutionalized civilian population) and who are aged 16 and older. The labor force is defined as the number of people aged 16 and older who are either employed or unemployed, where unemployed is defined as not having a job, being available for work, and having actively searched for a job in the past four weeks or waiting to be recalled from a temporary layoff. However, demographic trends have also constrained the size of the labor force. Research has documented the role of changes in LFPRs, especially the jump in the number of retired people (Briggs, 2021 Faria e Castro, 2021 and Kaplan et al., 2021) and the drop in the LFPR of mothers of young children (Aaronson and Alba, 2021, and Pitts, 2021). Broadly speaking, changes in the overall size of the labor force come from changes in labor force participation rates (LFPRs), changes in the demographic makeup of the population, and changes in the size of the population. The size of the US labor force declined by 2.3 million people between December 2019 and December 2021, sparking widespread debate about the underlying factors constraining labor supply.

Demographic changes