The NY Fed has an interesting take on the impact of demographics on the employment rate. They argue that you need to make adjustments for demographic and other effects to get a clear picture of the economic cycle. On this basis, our labour market performance between 2006 and 2013 is roughly a 1/3 better (or 1/3 less bad)!
A did a quick decomposition of employment data by age group from the Census. It shows that the employment rate, employed share of the working age population, has fallen from 65.0% to 62.3%. This 2.7%point decline can be roughly broken down to:
- roughly 1/3 is from the age composition effect (1.0%pt)
- remaining 2/3 is within age group and other factors. (1.8%pt)
Looking within the age groups it is clear to see there are large changes within age groups. Older people are still less likely to work than young, but the current generation of oldies are staying in employment for longer.
Between 2006 and 2013, the employment rate rose for only those aged between 60-84. The rest were worse off.