Volume 54 - Article 33 | Pages 1051–1094  

The power of inclusive labor force participation for mitigating population aging: Closing gaps at the intersection between race/ethnicity and gender in the United States

By René Böheim, Thomas Horvath, Thomas Leoni, Martin Spielauer

Abstract

Background: The US labor force and economic dependency ratios are projected to change significantly through 2060, driven by demographic shifts and persistent inequalities across race, ethnicity, and gender. The United States has lower participation rates than other industrialized countries and large participation gaps between population groups.

Methods: We use a dynamic microsimulation model, incorporating US population projections, to project labor force participation and economic dependency ratios. We assess multiple scenarios, simulating the effects of reducing inequalities in education and health and equalizing participation across demographic groups.

Results: Baseline projections indicate a labor force increase of approximately 27 million people by 2060, driven primarily by population growth. Reducing health and educational disparities could increase the baseline labor force projection by about 10%, adding 2.6 million people. The projected effects of closing gender and racial/ethnic participation gaps are substantial: equalizing participation rates between demographic groups could add up to 14.3 million people to the labor force.

Conclusions: Eliminating disparities in labor force participation has the potential to offset the impact of demographic aging on the economic dependency ratio, highlighting the importance of targeted policies to enhance labor force resilience by addressing inequalities and improving inclusion across population groups.

Contribution: We quantify the long-term effects of closing labor market disparities on labor force growth and economic dependency in the United States. We provide evidence-based projections to inform policies aimed at mitigating the economic challenges posed by an aging population.

Author’s Affiliation

• René Böheim - Johannes Kepler Universität Linz, Austria EMAIL
• Thomas Horvath - Österreichisches Institut für Wirtschaftsforschung, Austria EMAIL
• Thomas Leoni - Fachhochschule Wiener Neustadt (FHWN), Austria EMAIL
• Martin Spielauer - Österreichisches Institut für Wirtschaftsforschung, Austria EMAIL

Other articles by the same author/authors in Demographic Research

Simulating family life courses: An application for Italy, Great Britain, Norway, and Sweden
Volume 44 - Article 1

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