The Decline in Teen Labor Force Participation
Last Updated: 01/26/06
By the middle of 2005, the U.S. civilian unemployment rate had fallen to 5 percent, a level many analysts consider consistent with essentially full employment. However, individuals who have become discouraged over their prospects of finding suitable employment and, as a result, have given up looking are not counted among the unemployed. Thus, analysts often look to the labor force participation (LFP) rate, the fraction of the population that is either employed or unemployed as an additional indicator of labor market conditions. In fact, the participation rate declined significantly during and after the 2001 recession and remains well below its 2000 level. This could imply more labor market slack than the unemployment rate suggests. The decline in LFP has been especially great for teenagers.