The employment to population ration is a calculation from the Household survey, which is one of the unemployment reports issued by the BLS every month (the other is the establishment survey). The household survey provides very important data: the civilian non-institutional population, the total unemployment rate, the number of employed and the number of unemployed.
The employment to population ratio involves two numbers: the civilian non-institutional population, which comprises the following:
Included are persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces.Basically, this is everybody who would be eligible to work in some capacity if needed. This number makes up the denominator of the equation.
The second is an "employed person," which is defined as
Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.However, what if the overall population is aging, and more people are entering retirement than before? Before these people started to die there would be little effect on the civilian non-institutional population from these people dying (but not from births) while at the same time decreasing the number of people working. In short -- what if we were in a situation similar to the baby boomers starting retirement? That would lower the employment/population ratio in its initial stages.
What I'm wondering is this: what will be the overall, longer-term impact of the retiring baby boomers? As I've stated before, (see also this article from Marketbeat regarding a CBO study and this post from SilverOz), I firmly believe we'll continue to see weaker employment/population ratios and labor force participation rates. I should also add that the impact may not be as severe as I think it will be. But I also think the Professors Thoma and DeLong are incorrect in their concern about these numbers.
All that being said, last week I said I thought the oil market would be trading in a tight range on the same day it tanked the most in 2 years, so take this with a grain of thought.
5 comments:
Someone could -- as part of the same survey to maintain a consistent sample -- ask people if they are voluntarily retired.
so you're saying there were millions of extra retirements in 2009, and people -- especially young people & people w/o significant savings -- are trending toward retirement in innovative ways, more than ever before.
Thanks so much for this! I haven't been this moved by a blog for a long time! You’ve got it, whatever that means in blogging. Anyway, You are definitely someone that has something to say that people need to hear. Keep up the good work. Keep on inspiring the people!
regards:
Stock Market
Don't disagree with the long-term demographic effect being a decrease. However, as noted above, there really aren't that many people who reached "retirement age" in the past few years.
The days of 64.5 may be gone without immigration reform, but even the 62.5 range of the last period of "jobless recovery" is starting to look like a fond, distant memory.
Let us not confuse a long-term trend with the current displacement.
Would things look better if we looked at the employment ratio for prime-age workers? Em, no.
If we restrict the age group to 25-54 year olds the picture is just as bad. The employment to population ratio peaked ranged between 78-82 percent from 1987 through 2008, with it being near the bottom end of that range during recessions.
Since September 2009 it has been stuck around 75%. So the problem is definitely not an aging population.
Post a Comment