Will a Surge in Labor Force Participation Impede Unemployment Rate Improvement?

by Sabrina I. Pacifici on August 7, 2013

Federal Reserve Bank of Richmond – Will a Surge in Labor Force Participation Impede Unemployment Rate Improvement? by Andreas Hornstein, Karl Rhodes

“The labor force participation rate has been falling since 2000, a trend that accelerated somewhat during the recession of 2007-09. Some economists and journalists have questioned whether recent improvements in the labor market will cause non-participants to re-enter the labor force at a faster rate, thus offsetting job growth and impeding further declines in the unemployment rate. But recent worker-flow research suggests that this scenario is unlikely.”

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