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Abraham and Kearney examine employment-decline rates

Imports, robots seen as important factors

A new paper, recently published on the VOX CEPR Policy Portal, by Faculty Associates Katherine Abraham and Melissa Kearney, examines causes for persistent employment-rate decline. To date, the employment rate among non-elderly adults in the U.S., is 60.3 percent, remaining low when compared to other rich countries. There is a decline of 4.5 percentage points in the employment-to-population rate for U.S. population from 1999 to 2016. For men and women, the employment rate for adults between 25 and 54 years of age declines, as well as adults age 55 to 64 and 65 and older. The analysis shows that those with less than a high school diploma or with a college degree experienced the largest declines. Expanded imports competition from China and adoption of industrial robots are among some of the demand factors that contribute to the declining rates of manufacturing employment. The effects of industrial robots are equivalent to a 0.37 percentage point decline in the employment-to-population ratio. Expected factors, such as incarceration, don’t have a significant effect on declining employment. Secondary factors driving such decline include occupational licensing, geographic mobility, and high-quality child care programs.

In conclusion, the researchers note, “while the positive effects of the cyclical recovery certainly have been welcome, a reversal of the secular decline in US employment rates will require a multi-faceted policy approach. Addressing the dis-employment effects of trade and technology will require expanded and enhanced opportunities for training and skill development to enable affected workers to be re-employed in new sectors.”

See the complete CEPR article

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