IN MANY ways Britain’s and America’s labour markets look remarkably similar. Both are highly flexible. They share an unemployment rate of around 4.5%, far lower than the euro zone’s 9%. They both have low rates of productivity growth. Annual growth in private-sector nominal wages this year has been around the 2.5% mark.

Yet they differ in one big way. In America, labour-force participation (ie, the proportion of people either in or looking for work) among people of “prime age” is much lower than it was a decade ago. One in five Americans aged 25-54 is not in the labour force. Some fear that this is the beginning of a worrying trend, where automation leaves ever greater numbers of people structurally unemployable. Yet in Britain the participation rate has risen (see chart). The latest figures have the rate among 16- to 64-year-olds at its highest ever. Why has Britain fared better than its cousin across the pond?

A high rate of labour-force participation is generally good news. Exclusion from work is associated with all manner of problems, from poor health to drug use. A rise in participation brings marginalised workers into the workforce, boosting the earnings of poorer households.

The trend in Britain has many possible explanations. It may be a result of the high level of immigration from Europe. In the past decade the number of working-age EU nationals in Britain has risen by over 1.5m. Their participation rate is higher than that of British nationals, so they push up the overall figure. Yet this is only part of the explanation. Participation among British nationals of working age, after all, is also up.

Tougher welfare policy may have had more of an impact. In the late 2000s changes to benefits for single parents of young children encouraged them to look for work, boosting their employment, according to an official evaluation. Since April 2016 most working-age benefits have been frozen in cash terms, making a life out of work less attractive.

Though Britain’s welfare system remains softer than America’s, the direction of travel has been the opposite. A paper by Casey Mulligan of the University of Chicago found that, after the crisis of 2007-08, America “created or expanded a number of safety-net programmes that eroded the reward to work.”

The biggest factor, however, may be employment regulation, particularly as it affects women. Britain’s rules on maternity leave have long been far more generous than America’s. Changes in Britain in the early 2000s stipulated that employers were not to treat part-time workers less favourably than comparable full-timers. In 2014 the coalition government gave employees the right to request “flexible working” (such as working from home). Last month many parents of three- and four-year-olds became eligible for 30 hours of free child care a week. The upshot is that being a working parent in Britain may have become that bit easier. In the early 2000s the participation rates of prime-age women in America and Britain were practically identical. Today there is a gap of six percentage points.

The minimum wage, which women are more likely to be paid than men, also plays a role. Britain’s Low Pay Commission, a government body, says that the purchasing power of Britain’s minimum wage, currently £7.50 ($9.90) per hour for the over-25s, is over a fifth higher than America’s federal minimum. That seems to be generous enough to persuade some low-skilled workers not to drop out, but not so generous as to hurt job creation.

Can Britain’s high participation rate last? The country could merely be behind the curve when it comes to automation (its manufacturing industry, for instance, has far fewer robots per worker than America’s). The minimum wage is planned to be much higher by 2020, which might end up pricing some workers out of the labour market. For now, though, Britain’s jobs machine continues to purr.