It's hard to explain why prime working-age American women are leaving the labour force

The US’ prime working age labour force participation rate has been in decline, and that decline began long before the recent recession.

By definition, the labour force consists of those currently working or looking for work. A falling labour force participation rate suggests more and more people without work aren’t even trying to find work.

In a new report to clients, Barclays’ Michael Gavin has two charts that illustrate and compare the male and female prime working age populations (ages 25 to 54) of the US, Germany, Japan, and the UK — aka ageing countries that are seeing changes in their demographics and workforces.

The most jarring nugget was that only the US saw a decline in the prime working-age female participation over the two last decades. See the chart below.

US female participation peaked in the mid-90’s and has since been trending downwards, while in Germany, Japan, and the UK the rate continued to inch higher.

This is important because in Japan, Germany, and the UK, these changes in participation within the working-age bracket added at least one percentage point to the country’s overall rate of participation from 2005-2014 — and this gain was attributable largely to the trend increase in female labour force participation, according to Gavin.

Meanwhile, the participation rate of prime working-age men and women in the US dropped in the same time frame, which also pulled down the overall participation rate by a full percentage point.

“The uniquely American decline in the participation by working-age men and women puts the US in a long-standing contrast to Japan, Germany, and the UK, and is hard to explain on cyclical grounds, because it predated the 2008-09 recession to which, anyway, the other countries were also exposed,” writes Gavin.

“And it leaves the US with a 2014 participation rate that is quite low by international comparison.”

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