Labor Force Participation Rate: Men Vs. Women

by: Bespoke Investment Group

Following Friday's decline in the Unemployment Rate down to 7.3%, there has been a lot of discussion regarding how the decline was due almost entirely to the decline in the size of the labor force. With the labor force participation rate dropping to 63.2%, the percentage of people participating in the labor force is lower than at any other point since May 1978, which was in the middle of the secular shift of women joining the 'official' workforce.

While much, if not all, of the increase in the labor force participation rate in the 1970s was attributable to women entering the workforce, the shrinking of the labor force since the peak in early 2000 is due in majority to the exit of men from the work force. For example, since the labor force participation rate peaked, the participation rate among women has declined by just 2.8 percentage points. Men, on the other hand, have seen their participation rate decline by twice that at 5.6 percentage points.

Due to the fact that men are exiting the labor force at nearly twice the rate of women, the gap between the participation rate among men and women has been steadily shrinking. The participation rate among men currently stands at 69.5%, while the rate among women is 57.3%. With a spread of 12.2 percentage points, the gap between the sexes has never been narrower.

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