January 11, 2004

Labor Market

Brad DeLong has some labor statistics that show how different this recovery from previous ones. But he says,

Kash of the Angry Bear reports that the decline in the labor force share over the past three years is concentrated among men, not women: it's not that the boom of the late 1990s and the associated extraordinary employment opportunities led women who in normal times would have preferred not to be in the labor force to find jobs, and that they are now returning to their normal out-of-the-labor-force state. That is not what is going on.

I'm not arguing that that's necessarily wrong, but it seems to fall into the same logical trap that anti-free traders do when they talk about textile jobs vs. steel jobs, i.e. the assumption that the two groups are not interchangeable.

It seems plausible that, in this enlightened age, men with wives who still have good jobs might be the ones to decide to drop out of the labor force during the tougher times. Just because female employment grew during the boom times, it doesn't necessary follow that it would shrink during the downturn — families should rationally (barring stereotypes) have the less-employable member drop out of the market when they can't find a job — and today that just might be the man.

Posted by richard at January 11, 2004 06:41 PM