The share of American adults who are either working or actively looking for work -- i.e.: the labor force participation rate -- fell to its lowest point since 1979, according to today's jobs report.



If 37 percent of American adults aren't in the labor force, what are they doing?

Bloomberg Businessweek has a beautiful graphical explanation. Click it.



The reason the labor force's share of the country is shrinking has to do with both economics and demographics. We're becoming an older country, and should expect more Americans in their 60s to retire in the next decade. College matriculation rates also rose through the recession as the opportunity cost of going to school fell because the large Millennial cohort saw there were so few jobs for young people. Meanwhile the number of people who want to work but just don't think there are jobs for them have grown significantly and disability rolls have also increased fast enough that some people suspect that discouraged workers are claiming disability insurance to make money.



The upshot is that the falling labor force is a bad thing, absolutely -- more workers means more stuff, more wealth, less government spending on the indigent, and so forth -- but it's also not something we can totally control. We can liberalize immigration to add more working people and resist budget cuts to keep deficit spending high while the private sector is recovering. But much of the decline in labor force participation is that one thing that not even the most ambitious policy wonk could ever imagine reversing. That thing is time. Older countries work less.

