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November 2006, Vol. 129, No. 11
A new look at long-term labor force projections to 2050
With an annual growth rate of 0.6 percent over the 2005–50 period, the labor force is projected to reach 194.8 million in 2050. Peaking at 2.6 percent during the 1970s, the growth rate of the labor force has been decreasing with the passage of each decade and is expected to continue to do so in the future. (See chart 1.)
The 0.6-percent annual growth rate from 2005 to 2050 reflects a projected population of 322.6 million and a labor force participation rate of 60.4 percent in 2050. The period to 2050 will witness the baby-boom generation ascending the age ladder until the group moves out of the labor force, bringing to an end one of the major drivers of labor force growth over the post-World War II period. (See table 1.)
Because labor force growth is one of the major determinants of long-term economic growth, projections of the labor force shed light on the future path of the economy and its ability to create goods and services. The Bureau of Labor Statistics carries out medium-term, or 10-year, labor force projections every other year. Every several years, longer term projections of the labor force are carried out to elicit possible future paths of labor force growth. Several key factors are expected to continue to affect the composition and growth of the labor force in the next 50 years:
The impact of the aging baby-boom generation on the labor force. The impact of the baby-boom generation on the composition and growth of the labor force will continue to be a key factor. As this large cohort ages, the increase in the share of the older labor force and, eventually, the exit of the baby-boom cohort from the workforce will be the main factor in lowering the growth of the labor force.
This excerpt is from an article published in the November 2006 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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