The relationship between age and labor force participation in the US is complex, with distinct patterns across different age groups. Prime-age workers form the core of the workforce, while younger and older populations show trends influenced by social, economic, and demographic factors. Since its peak in the early 2000s, the overall labor force participation rate has trended downward, largely due to the aging population. Understanding these age-related dynamics is key to understanding the labor market's current state and future.
Labor Force Participation Across Age Demographics
Young Adults (Ages 16–24)
Labor force participation for young adults has declined over time, with the rate for 16-to-24-year-olds at 55.9% in 2024. This decrease is linked to:
- Increased School Enrollment: More young people are pursuing higher education after high school, delaying full-time work.
- Economic Factors: Some research suggests increased competition for low-skilled jobs affects less-educated young adults.
- Shift to Part-Time Work: Young workers are more likely to work part-time, often balancing work with school.
Prime-Age Workers (Ages 25–54)
This group consistently has the highest participation rates and is central to the US workforce.
- High and Stable Participation: While prime-age male participation has seen a long-term decline, prime-age female participation has increased significantly over the decades and recently reached historic highs, influenced by factors like education and changing social norms.
- Factors for Nonparticipation: Caregiving impacts prime-age women's participation, while disability is a more common factor for prime-age men.
- Post-Pandemic Recovery: Participation for this group has rebounded strongly since the COVID-19 pandemic.
Older Adults (Ages 55+)
Participation among older Americans has risen in recent decades, with the rate for those 65 and older increasing to 19.5% in 2024. This rise is due to:
- Improved Health and Longevity: People are living longer and healthier lives, enabling them to work longer.
- Economic and Retirement Changes: Shifts from defined-benefit pensions to defined-contribution plans and changes in Social Security rules encourage later retirement.
- Changing Work Preferences: Older workers often prefer flexible work, and the job market has become more adaptable.
Key Factors Influencing Participation Across Age Groups
The Role of Education
Education is a significant factor in labor force participation, with higher attainment linked to higher participation and employment rates. The participation gap between more and less-educated workers has grown, particularly affecting younger men with less education. Rising educational attainment has helped support the overall participation rate.
The Effect of Health and Disability
Health and disability are crucial factors, especially for prime-age and older workers. Disability is the leading cause of nonparticipation for prime-age men and a notable reason for women in this group. While disability contributed to a past decline in older men's participation, improved health now supports increased participation among older workers.
Population Demographics and Aging
The aging of the US population, driven by the Baby Boomer generation, is a major factor lowering the overall labor force participation rate. As more people enter age groups with lower participation, the aggregate rate decreases. This trend is expected to continue. The changing generational mix, with Gen Z growing and Baby Boomers aging, also impacts the workforce.
Comparison of Age Groups and Their Participation Drivers
| Feature | Young Adults (Ages 16–24) | Prime-Age Workers (Ages 25–54) | Older Adults (Ages 55+) |
|---|---|---|---|
| Typical Participation Pattern | Lower and often part-time, focused on education | Highest and most stable, forming core of workforce | Lower than prime-age, but with rising trend |
| Primary Drivers of Participation | Education goals, early career exploration, part-time work | Career stability, financial security, family responsibilities | Economic necessity, longevity, flexible work options |
| Key Factors for Nonparticipation | School attendance, competition for low-skilled jobs | Caregiving (women), illness/disability (men) | Retirement, health issues, accumulated wealth |
| Employment Tendencies | Often part-time or seasonal employment | Mostly full-time, with a notable shift in women’s roles | Growing preference for part-time work, but also rising full-time rates |
| Notable Recent Trends | Decreasing participation tied to increased schooling | Post-pandemic rebound, historic highs for prime-age women | Increasing participation, particularly for those in their 60s |
Projections for the Future
Projections suggest the aging population will continue to lower the overall labor force participation rate. However, more older individuals are expected to remain in the workforce, partially offsetting this decline. The fastest growth in participation is projected for workers 75 and older, though they will remain a small segment of the labor force. Modest increases are expected for prime-age women, while younger cohorts may have lower rates due to extended education.
Conclusion
Age is a key factor in US labor force participation, with peak rates in the prime working years (25-54) and lower rates among younger and older groups. However, these age-specific dynamics are changing due to social, economic, and demographic factors. Increased education contributes to lower youth participation, while economic needs, better health, and changes in retirement benefits are increasing older adult participation. The ongoing aging of the population is the most significant factor reducing the overall rate, making age-specific trends vital for understanding the US labor market.
Keypoints
- Prime-Age Workers Have Highest Participation: Individuals aged 25–54 consistently show the highest labor force participation rates, serving as the economy's engine.
- Youth Participation Linked to Education: Declining participation among 16-to-24-year-olds is strongly correlated with higher school enrollment and delayed entry into the workforce.
- Older Americans Staying in Workforce Longer: Increasing longevity, better health, and economic shifts are prompting a growing share of adults 55 and over to remain in the labor force.
