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An American Labor Market Mystery
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Since bottoming out in early 2020, the U.S. economy has handily outperformed other major advanced countries, except in one crucial dimension: its labor force.
Between the fourth quarters of 2019 and 2021, the labor-force participation rate—the share of the population ages 15 to 64 either working or looking for work—dropped 0.7 percentage points in the U.S., while rising in Japan and Canada, according to the Organization for Economic Cooperation and Development, an association of advanced economies. The eurozone’s participation rate was also well above its pre-pandemic level in the third quarter, the latest for which data is available.
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