The state of technology and the unemployment rate look nothing like each other. What about the state of technology and the labor force participation rate (LFP)?
Well, LFP doesn’t have massive spikes like the unemployment rate. Since the state of technology doesn’t have massive spikes either, that eliminates one big discrepancy.
Otherwise, however, LFP and technology have almost nothing in common. Technological progress is nonstop, but LFP rose for five decades, then started falling.
Disaggregating a bit:
1. LFP was roughly flat from 1948-1965, a period of legendary technological progress.
2. LFP rose non-stop from 1965-1999, a period of noted technological progress.
3. LFP fell almost non-stop from 2000-2015, another period of noted technological progress.
4. LFP has been flat ever since, as progress from earlier in the 21st-century continues unabated.
If technology doesn’t explain these ups, downs, and lulls, what does? I see every reason to accept the orthodox view that demographics are the most important factor, by far. The main reason for the rise: Far more women now want to work outside the home than in 1948, so far more do. The main reason for the fall: aging. Why the hump? There’s an upper bound on female LFP, because there’s a solid core of women who want to stay home and take care of their kids. We hit that bound a couple decades ago, so the effects of aging finally became obvious.
Yes, there’s also been a decline in prime-age male participation. You could blame technology, but it makes a lot more sense to blame the mating market. As female income rises, women understandably place less weight on men’s financial success. As a result, attractive men no longer need a job to date, and unattractive men need more than a low-status job to date. Culture amplifies these effect: The fewer men work, the lower the shame of idleness – and the lower the shame of dating an idle man.
Is the mating market story speculative? Perhaps. But unlike the technological story, at least it doesn’t directly contradict the facts.
READER COMMENTS
Ben Kennedy
Feb 20 2019 at 3:28pm
“Is the mating market story speculative? Perhaps. But unlike the technological story, at least it doesn’t directly contradict the facts.”
Prime-age men no longer have to work because women no longer see shame in idleness? Speculative indeed. People work for many reasons beyond simply looking attractive in the dating market. OTOH, the technological story lines up perfectly with the increasingly widening split in LFPR by educational attainment. Low skill jobs have been outlawed by minimum wage, or shipped overseas, or automated away
Mark Bahner
Feb 21 2019 at 12:13am
“The state of technology?” What in the world even is that?
What are the units? Megawidgets? How about flying cars? We didn’t have flying cars in 1948 and we don’t today…ergo, ipso fatso (sadly, we don’t have Archie Bunker today either), the state of technology has not changed since 1948.
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