September 2024

Why did labor force nonparticipation increase from 1999 to 2022?

The labor force nonparticipation rate—the percentage of people aged 16 and older who are neither working nor looking for work—increased from 1999 to 2022. Data from the Current Population Survey and its Annual Social and Economic Supplement provide insight into why labor force nonparticipants did not work. From 1999 to 2022, there was an increase in nonparticipation due to retirement, school attendance, illness or disability, and “other reasons.” Nearly three-fourths of the total increase in nonparticipation was due to retirement. Nonparticipation rates and the reasons people gave for not working varied by age and gender. Among younger people, the nonparticipation rate rose sharply from 1999 to 2022, and the most frequently cited reason for not working was school attendance. Labor force nonparticipation rates also rose for both men and women aged 25 to 54. Illness or disability was the most common reason men aged 25 to 54 gave for not working, and it was the second most common reason cited by women aged 25 to 54, after home responsibilities. Women in this age group were much more likely than were men to cite home responsibilities as their main reason for not working. Men and women aged 25 to 54 with less education were more likely to be labor force nonparticipants than were their more educated counterparts. From 1999 to 2022, the increases in the nonparticipation rates of men and women aged 25 to 54 were larger for those with less education than they were for those with more education. From 1999 to 2022, the nonparticipation rate of people aged 55 and older declined. People aged 55 and older most often cited retirement as their main reason for not working.

People who are neither working nor looking for work are counted as “not in the labor force” by the U.S. Bureau of Labor Statistics. From 1999 to 2022, the percentage of people aged 16 and older who were not in the labor force increased. Data from the Current Population Survey (CPS) and its Annual Social and Economic Supplement (ASEC) provide some insight into why people are not in the labor force.¹ The ASEC is administered in the months of February through April and includes questions about work and other activities in the previous calendar year. For example, data collected in 2000 pertain to the 1999 calendar year, and data collected in 2023 cover the 2022 calendar year.² In the ASEC, people who did not work at all in the previous year are asked to give the main reason why they did not work.³ Interviewers place survey participants’ responses into the following six categories: (1) ill or disabled and unable to work, (2) retired, (3) taking care of home or family, (4) going to school, (5) could not find work, and (6) doing something else.⁴ People who did not work at all in the previous year are also asked if they looked for work or were on layoff at any time during the previous year.

Table 3. Men aged 25 to 54 who were not in the labor force, by educational attainment and reason for not working in 1999 and 2022

Educational attainment	Number (in thousands)		Percent of the total population in the specified educational attainment group
	1999	2022	1999	2022
Less than a high school diploma	1,239	1,086	17.7	20.2
Ill or disabled	911	652	13.0	12.1
Retirement	44	57	0.6	1.1
Home responsibilities	89	135	1.3	2.5
School attendance	36	77	0.5	1.4
Other reasons	159	165	2.3	3.1
High school graduates, no college	1,470	2,843	7.8	15.2
Ill or disabled	1,046	1,667	5.6	8.9
Retirement	104	263	0.6	1.4
Home responsibilities	121	351	0.6	1.9
School attendance	31	140	0.2	0.7
Other reasons	169	424	0.9	2.3
Some college or associate degree	929	1,677	6.1	11.0
Ill or disabled	533	765	3.5	5.0
Retirement	111	215	0.7	1.4
Home responsibilities	59	236	0.4	1.5
School attendance	152	257	1.0	1.7
Other reasons	74	205	0.5	1.3
College graduates	462	1,347	2.7	5.5
Ill or disabled	115	249	0.7	1.0
Retirement	76	272	0.5	1.1
Home responsibilities	54	236	0.3	1.0
School attendance	154	339	0.9	1.4
Other reasons	63	252	0.4	1.0
Note: The “other reasons” category includes people who reported that they could not find work and those who reported other unspecified reasons. Source: Annual Social and Economic Supplement (ASEC) to the Current Population Survey.

As mentioned previously, men aged 25 to 54 most often cited illness or disability as their main reason for not working. Less educated men were more likely than those with more education to cite illness or disability as their main reason for not working. (See chart 12 and table 3.) In 2022, 12.1 percent of men aged 25 to 54 with less than a high school diploma cited illness or disability as their main reason for not working, versus only 1.0 percent of college graduates.

Among people aged 25 to 54, women were more likely than men to be nonparticipants in the labor force. The nonparticipation rate of women aged 25 to 54 rose from 18.7 percent in 1999 to 21.0 percent in 2022. (See chart 13 and table 2.) Unlike men, women most often cited home responsibilities as their main reason for not working. About 13 percent of women aged 25 to 54 reported this reason in both 1999 and 2022. The proportion of women aged 25 to 54 who cited illness or disability rose slightly, from 3.8 percent in 1999 to 4.2 percent in 2022.

The percentage of women aged 25 to 54 who did not work because of retirement also increased, from 0.6 percent in 1999 to 1.4 percent in 2022, while the proportion who did not work because of “other reasons” rose from 0.4 percent to 1.0 percent. The share of women aged 25 to 54 who cited school attendance as their main reason for not working edged up from 1.1 percent in 1999 to 1.4 percent in 2022.

Sizeable percentages of men and women aged 25 to 54 cited illness or disability as their main reason for not working. The percentages of men and women aged 25 to 54 who did not work because of illness or disability rose steadily from 1999 to 2014. (See chart 14.) For men, the percentage increased from 4.5 percent in 1999 to 6.0 percent in 2014, while, for women, it rose from 3.8 percent to 5.7 percent. This rise in nonparticipation due to illness or disability could be attributed, in part, to the aging of the large baby-boom population, as the incidence of disability has tended to be higher among older age groups. Between 1999 and 2014, 45- to 54-year-olds became an increasingly larger share of the 25- to 54-year-old population.²⁶

Because the majority of Social Security Disability Insurance (SSDI) recipients do not participate in the labor force because of a disability, it is useful to examine how information on SSDI recipients compares with ASEC data.²⁷ As mentioned previously, ASEC data showed an increase from 1999 to 2014 in the percentage of people aged 25 to 54 who did not work because of illness or disability. From 1999 to 2014, there was also a steady increase in the number of SSDI recipients. Among 25- to 54-year-olds, the likelihood of filing for SSDI benefits has been found to rise steadily with age, especially after age 44.²⁸

Between 2014 and 2022, the percentages of men and women aged 25 to 54 who did not work because of illness or disability trended down; the declines were somewhat steeper from 2015 to 2019. Data on SSDI recipients showed a similar trend from 2015 to 2019. During this period, there was a sharp decrease in the number of SSDI recipients. Researchers have noted that the drop in SSDI recipients coincided with retraining of administrative law judges, which reduced the rate of SSDI benefits awarded on appeal. In addition, improving labor market conditions during this period could have enticed some people with less severe disabilities, who were able to work in some capacity, to forgo the SSDI application process and participate in the labor force.²⁹

Among people aged 25 to 54, women were much more likely than men to cite home responsibilities as their main reason for not working. (See chart 15.) From 1999 to 2022, the nonparticipation rate of women aged 25 to 54 due to home responsibilities remained in a narrow range of about 13 to 15 percent. For men aged 25 to 54, the nonparticipation rate due to home responsibilities trended up slightly, from 0.6 percent in 1999 to 1.5 percent in 2022.

As was the case for men, women aged 25 to 54 with less education were much more likely than those with more education to be labor force nonparticipants. In 2022, 47.6 percent of women aged 25 to 54 with less than a high school diploma did not participate in the labor force, compared with 13.5 percent of those with a college education. (See chart 16 and table 4.) Between 1999 and 2022, the rise in nonparticipation among women aged 25 to 54 was larger for those with less than a college degree than for those with a college degree or higher.

Table 4. Women aged 25 to 54 who were not in the labor force, by educational attainment and reason for not working in 1999 and 2022

Educational attainment	Number (in thousands)		Percent of the total population in the specified educational attainment group
	1999	2022	1999	2022
Less than a high school diploma	2,573	2,048	38.8	47.6
Ill or disabled	730	441	11.0	10.2
Retirement	43	70	0.6	1.6
Home responsibilities	1,650	1,386	24.9	32.2
School attendance	100	62	1.5	1.4
Other reasons	50	88	0.8	2.0
High school graduates, no college	3,878	4,196	20.2	29.2
Ill or disabled	828	1,154	4.3	8.0
Retirement	138	256	0.7	1.8
Home responsibilities	2,728	2,505	14.2	17.4
School attendance	107	97	0.6	0.7
Other reasons	77	184	0.4	1.3
Some college or associate degree	2,725	3,173	15.4	20.1
Ill or disabled	526	729	3.0	4.6
Retirement	79	185	0.4	1.2
Home responsibilities	1,801	1,863	10.2	11.8
School attendance	248	276	1.4	1.8
Other reasons	72	120	0.4	0.8
College graduates	2,153	3,978	12.6	13.5
Ill or disabled	209	354	1.2	1.2
Retirement	85	361	0.5	1.2
Home responsibilities	1,590	2,547	9.3	8.6
School attendance	208	490	1.2	1.7
Other reasons	61	226	0.4	0.8
Note: The “other reasons” category includes people who reported that they could not find work and those who reported other unspecified reasons. Source: Annual Social and Economic Supplement (ASEC) to the Current Population Survey.

As mentioned previously, women aged 25 to 54 most often cited home responsibilities as their main reason for not working. Those with less education were especially likely to cite this reason. (See chart 17 and table 4.) In 2022, among women aged 25 to 54, 32.2 percent of those with less than a high school diploma, 17.4 percent of high school graduates with no college, 11.8 percent of those with at least some college, and 8.6 percent of college graduates cited home responsibilities as their main reason for not working.

Among women aged 25 to 54, illness or disability was another common reason for not working, though the likelihood of not working due to illness or disability was lower at higher levels of educational attainment. (See chart 18 and table 4.) In 2022, 10.2 percent of women aged 25 to 54 with less than a high school diploma cited illness or disability as their main reason for not working, while only 1.2 percent of college graduates gave this reason.

The older population

As might be expected, older adults had a high rate of labor force nonparticipation from 1999 to 2022, mainly because of retirement. The nonparticipation rate of older adults did decline, however, during this period. The nonparticipation rate of people aged 55 to 64 decreased from 34.6 percent in 1999 to 31.8 percent in 2022. (See chart 19 and table 2.) People aged 55 to 64 most often cited retirement as their main reason for not working. From 1999 to 2022, the number of people aged 55 to 64 who cited retirement as their main reason for not working rose from 3.9 million to 6.0 million. However, with strong labor force growth in this increasingly large age group during this period, the proportion of people aged 55 to 64 who cited retirement as their main reason for not working actually fell, from 16.8 percent to 14.6 percent. The share of people aged 55 to 64 who did not work because of home responsibilities declined from 6.1 percent in 1999 to 4.7 percent in 2022, while the percentage who said they did not work because of illness or disability increased slightly, from 10.8 percent to 11.6 percent.

People aged 65 and older were more likely than those aged 55 to 64 to be labor force nonparticipants. The nonparticipation rate of people aged 65 and older also declined, however, from 82.8 percent in 1999 to 77.4 percent in 2022. (See chart 20 and table 2.) Like people aged 55 to 64, those 65 and older most often cited retirement as their main reason for not working. From 1999 to 2022, the number of people aged 65 and older who cited retirement as their main reason for not working increased from 23.4 million to 41.0 million; however, with strong labor force growth in this increasingly large age group, the percentage of people aged 65 and older who reported this reason declined slightly, from 71.7 percent in 1999 to 70.8 percent in 2022. The percentage of people aged 65 and older who cited home responsibilities as their main reason for not working declined from 3.4 percent in 1999 to 1.2 percent in 2022, while the proportion that did not work because of illness or disability fell from 7.4 percent to 5.0 percent.

As mentioned previously, people aged 55 to 64 and those aged 65 and older most often cited retirement as their main reason for not working. The percentages of people in these age groups who cited retirement as their main reason for not working fluctuated between 1999 and 2022. (See chart 21.) The percentage of people aged 55 to 64 who did not work because of retirement increased from 16.8 percent in 1999 to 18.1 percent in 2000, before dropping to 12.8 percent by 2015. The rate then trended up again, and in 2022, it was 14.6 percent. Among people aged 65 and older, the nonparticipation rate due to retirement increased from 71.7 percent in 1999 to 73.7 percent in 2001.

The rate fell in the ensuing years, and in 2016, it was 67.4 percent; by 2022, it had risen again, to 70.8 percent. While older adult nonparticipation due to retirement declined during the 2000s and early 2010s, the average retirement ages for men and women trended up.³⁰ Then, during the late 2010s and early 2020s, as older adult nonparticipation due to retirement increased and the number of Social Security retirement beneficiaries rose sharply, the average retirement ages for men and women remained relatively flat.³¹ As shown in chart 21 and table 2, despite the increases in the nonparticipation rates due to retirement among people aged 55 to 64 and those aged 65 and older between 2015 and 2022, the rates were still lower in 2022 than they were in 1999. Possible contributors to the decline in labor force nonparticipation, or rise in work activity, among older men and women between 1999 and 2022 include an increase in the full retirement age for Social Security, changes to private retirement plans, increased life expectancy, and higher educational attainment of older adults.³²

After retirement, illness or disability was the second most common reason people aged 55 to 64 gave for not working. The nonparticipation rate due to illness or disability of 55- to 64-year-olds rose from 10.8 percent in 1999 to 13.4 percent in 2016; it then trended down, to 11.6 percent by 2022. (See chart 22.) This increase and subsequent decline in nonparticipation due to illness or disability paralleled a rise and fall in the number of SSDI recipients during this period.³³

Despite a higher incidence of disability among people aged 65 and older compared with that of younger people, the percentage of people aged 65 and older who did not work because of illness or disability was consistently lower than that of people aged 55 to 64 from 1999 to 2022. (See chart 22.) The nonparticipation rate due to illness or disability of people aged 65 and older held at about 7 percent from 1999 to 2016; the rate then trended down, to 5.0 percent by 2022.  This lower rate among people aged 65 and older compared to those aged 55 to 64 might have been due, in part, to a shift from SSDI to Social Security retirement benefits. When workers reach their full retirement age for Social Security (66 to 67 for baby boomers, for example), they generally transition from SSDI benefits to Social Security retirement benefits.³⁴ While a certain proportion of nonparticipants aged 55 to 64 reported illness or disability as their main reason for not working, some of those with a similar illness or disability but who had reached their full retirement age for Social Security might instead have reported retirement as their main reason for not working.

COVID-19 pandemic

The COVID-19 pandemic and efforts to contain it had a severe impact on the U.S. labor force, especially in 2020 and 2021.³⁵ In 2019—the year before the pandemic—the overall nonparticipation rate was 34.0 percent. (See chart 23 and table 5.) In 2020, it rose to 35.1 percent and continued to increase to 35.6 percent in 2021; in 2022, the rate was 35.5 percent.³⁶ The absolute number of people who did not work or look for work rose from 88.8 million in 2019 to 94.5 million in 2022.³⁷

 Table 5. People who were not in the labor force, by age, gender, and reason for not working, 2019–2022

Age and gender	Number (in thousands)				Percent of the total population in the specified age and gender group
	2019	2020	2021	2022	2019	2020	2021	2022
Total, 16 years and older	88,769	91,954	93,737	94,522	34.0	35.1	35.6	35.5
Ill or disabled	14,760	14,959	15,123	14,534	5.7	5.7	5.7	5.5
Retirement	43,804	45,649	47,282	48,832	16.8	17.4	17.9	18.3
Home responsibilities	12,669	13,047	13,082	13,097	4.9	5.0	5.0	4.9
School attendance	15,314	15,384	14,984	15,048	5.9	5.9	5.7	5.7
Other reasons	2,223	2,915	3,266	3,011	0.9	1.1	1.2	1.1
Total, 16 to 19 years	10,449	10,752	10,498	10,327	61.3	63.4	61.7	60.1
Ill or disabled	291	371	312	304	1.7	2.2	1.8	1.8
Retirement	55	54	38	46	0.3	0.3	0.2	0.3
Home responsibilities	244	331	320	313	1.4	2.0	1.9	1.8
School attendance	9,631	9,725	9,533	9,371	56.5	57.3	56.0	54.5
Other reasons	228	271	294	293	1.3	1.6	1.7	1.7
Total, 20 to 24 years	5,256	5,679	5,557	5,898	25.3	27.3	26.6	26.7
Ill or disabled	500	636	602	553	2.4	3.1	2.9	2.5
Retirement	53	76	76	119	0.3	0.4	0.4	0.5
Home responsibilities	664	764	834	867	3.2	3.7	4.0	3.9
School attendance	3,649	3,765	3,523	3,826	17.6	18.1	16.9	17.3
Other reasons	391	439	521	534	1.9	2.1	2.5	2.4
Men, 25 to 54 years	6,442	6,862	7,025	6,953	10.2	10.9	11.1	10.9
Ill or disabled	3,233	3,392	3,311	3,332	5.1	5.4	5.2	5.2
Retirement	650	789	948	806	1.0	1.2	1.5	1.3
Home responsibilities	809	926	893	958	1.3	1.5	1.4	1.5
School attendance	914	854	843	812	1.4	1.4	1.3	1.3
Other reasons	835	902	1,030	1,045	1.3	1.4	1.6	1.6
Women, 25 to 54 years	13,253	13,774	13,892	13,395	20.7	21.5	21.7	21.0
Ill or disabled	2,797	2,818	2,824	2,678	4.4	4.4	4.4	4.2
Retirement	766	893	975	873	1.2	1.4	1.5	1.4
Home responsibilities	8,284	8,474	8,448	8,301	12.9	13.2	13.2	13.0
School attendance	963	913	936	925	1.5	1.4	1.5	1.4
Other reasons	442	677	709	618	0.7	1.1	1.1	1.0
Total, 55 to 64 years	12,740	13,161	13,168	13,148	30.0	30.9	31.2	31.8
Ill or disabled	4,988	4,969	4,998	4,780	11.8	11.7	11.9	11.6
Retirement	5,579	5,839	5,798	6,031	13.2	13.7	13.8	14.6
Home responsibilities	1,872	1,851	1,782	1,940	4.4	4.3	4.2	4.7
School attendance	112	102	99	73	0.3	0.2	0.2	0.2
Other reasons	190	401	490	324	0.4	0.9	1.2	0.8
Total, 65 years and older	40,629	41,725	43,598	44,801	76.2	76.9	77.6	77.4
Ill or disabled	2,952	2,773	3,075	2,885	5.5	5.1	5.5	5.0
Retirement	36,700	37,998	39,446	40,957	68.8	70.0	70.2	70.8
Home responsibilities	796	703	804	719	1.5	1.3	1.4	1.2
School attendance	45	25	51	42	0.1	0.0	0.1	0.1
Other reasons	136	225	221	198	0.3	0.4	0.4	0.3
Note: The “other reasons” category includes people who reported that they could not find work and those who reported other unspecified reasons. Source: Annual Social and Economic Supplement (ASEC) to the Current Population Survey.

One limitation of the data from the ASEC on reasons for nonparticipation is that the estimates are restricted to people who did not work or look for work at all during the entire calendar year. The ASEC may therefore have underestimated nonparticipation during the initial years of the pandemic. Specifically, because the main initial impact of the COVID-19 pandemic did not occur until March 2020, people who left the labor force because of the pandemic but who had worked or looked for work during the early part of 2020 would not be in the universe for ASEC questions on reasons for nonparticipation. Also, as vaccinations and treatments for COVID-19 became available, it appears that many workers who left the labor force during the early part of the pandemic began returning to work or engaging in an active job search.³⁸ If these individuals returned to the labor force in the latter part of 2021 or 2022, for example, they would not be included in the ASEC data on reasons for nonparticipation for that year.

Chart 23 and table 5 show data on the reasons for nonparticipation from 2019 to 2022. The percentage of the population aged 16 and older that did not work or look for work and cited retirement as their reason for not working rose from 16.8 percent in 2019 to 18.3 percent in 2022.³⁹ The percentages of people who did not work due to illness or disability, home responsibilities, school attendance, and “other reasons” did not change appreciably from 2019 to 2022.⁴⁰

As mentioned previously, the COVID-19 pandemic and efforts to contain it resulted in a sharp increase in the number of people who were not in the labor force. From 2019 and 2022, the number of people who did not work or look for work rose by 5.8 million. Of this 5.8-million increase, 5.0 million, or about 87 percent, was due to retirement.⁴¹ (See chart 24.)

Between 2019 and 2022, people aged 65 and older accounted for about 85 percent of the 5.0 million increase in the number of people who were not in the labor force because of retirement.⁴² During this period, men and women aged 20 to 24 and men aged 25 to 54 were responsible for much of the 428,000 increase in the number of people who did not work because of home responsibilities.⁴³ Meanwhile, the number of people who were not in the labor force for “other reasons” rose by 788,000, and the gain was spread across all major demographic groups.

Summary

According to the Annual Social and Economic Supplement to the Current Population Survey, the labor force nonparticipation rate—the percentage of the population aged 16 and older that is not in the labor force—reached a low of 28.7 percent in 1999 and subsequently increased to 35.5 percent in 2022. From 1999 to 2022, there was an increase in nonparticipation due to retirement, school attendance, illness or disability, and “other reasons.” Nearly three-fourths of the total increase in nonparticipation over the period was due to retirement.

The rise in labor force nonparticipation over the 1999–2022 period occurred across most of the major demographic groups. Teenagers experienced the steepest increase in nonparticipation, while nonparticipation rose more gradually among young adults aged 20 to 24. School attendance was the most common reason given for not working by both teenagers and young adults.

The labor force nonparticipation rate of men aged 25 to 54 also increased from 1999 to 2022. Illness or disability was the most common reason men gave for not working. The increase in nonparticipation among men with less education was greater than that of men with more education. The labor force nonparticipation rate of women aged 25 to 54 also rose from 1999 to 2022. Home responsibilities, followed by illness or disability, were the most common reasons women cited for not working. The rise in nonparticipation of women aged 25 to 54 was most pronounced for those who did not attend college. Women with a college degree experienced a much smaller rise in labor force nonparticipation.

Labor force nonparticipation rates of people aged 55 to 64 and those aged 65 and older declined from 1999 to 2022. Both groups were most likely to cite retirement as their main reason for not working. From 1999 to 2022, the number of people aged 55 and older who cited retirement as their main reason for not working rose from 27.3 million to 47.0 million. However, because of strong labor force growth in the expanding population of older adults during this period, the percentage of older adults who cited retirement as their main reason for not working actually fell.

In early 2020, the COVID-19 pandemic and efforts to contain it struck the labor force. Data from the ASEC show that the overall nonparticipation rate rose from 34.0 percent in 2019 to 35.5 percent in 2022, and the increase was primarily due to a rise in retirement.

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