Sept. 4 (Bloomberg) — Federal Reserve economists concluded in a new research paper that much of the decline in labor force participation since 2007 is due to long-lasting "structural" causes such as the aging of the workforce.
Fed officials are debating how much slack is in the labor market. The paper released today casts doubt on whether continued economic stimulus would raise labor-force participation much above its current levels as demand increases.
"Demographics will likely continue to play a prominent role in determining the future path of the aggregate labor force participation rate," the economists said. "Indeed, on our estimates, the continued aging of the population alone will subtract 2.5 percentage points from the aggregate participation rate over the next ten years."
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