From 1978 to 2000 the fraction of adult men in full-year non-employment
increased from 17.1 to 21.6 percent. Previous research focused on the role of disability
insurance policy and wage structure changes to explain this increase. Using Current
Population Surveys from 1979 to 2003 we assess how much of the changes in full-year
non-employment can be explained by demographic changes, possibly linked to health.
With our empirical strategy we examine how 1978 to 2000 changes in demographic
characteristics would have changed the distribution of weeks worked if policies and
macroeconomic conditions remained as they were in 1978. For prime-aged men, we find
changes in age, race, and ethnicity can "explain" 14 to 33 percent of the increase in fullyear
non-employment, without any change in policy or wage structure. For prime-aged
women, changes in demographics also would have predicted increases in full-year nonemployment,
when in fact we saw dramatic decreases.