Much of this decline is due to the drop in the labour force participation rate (LFPR).
Some people have attributed the change to discouraged workers. Others have pointed to young people going back to school. Many have recognised that many baby boomers are retiring.
Earlier this week, Business Insider’s Matthew Boesler brought light to some underappreciated stats from the Census that actually quantify this. “The monthly Current Population Survey conducted by the U.S. Census Bureau and the U.S. Bureau of Labour Statistics (from which labour force participation data are derived) actually asks those leaving the labour force why they are doing so.”
The numbers broke down the 12.6 million people who left the workforce since 2007 into five broad categories. According to the respondents, 5.5 million retired, 2.9 million went on disability, 2.5 million went to school, and just 1.4 million left because they were discouraged.
Here’s Deutsche Bank’s pie chart.