Americans in Their Prime Are Flooding
Into the Job Market
The share of people between 25 and 54 working or seeking jobs rose this year to the highest level since
By Jeffrey Sparshott
July 22, 2023 5:30 am ET
The core of the American labor force is back.
Americans between 25 and 54 years of age are either employed or looking for jobs at rates not seen
in two decades, a trend helping to counter the exodus of older baby boomers from the workforce.
Economists define that age range as in their prime working years—when
most Americans are done with their formal education, aren’t ready to retire, and tend to be
most attached to the labor force.
In the first months of the pandemic, nearly four million prime-age workers left the labor market,
pushing participation in early 2020 to the lowest level since 1983—before women had become as much
of a force in the workplace. Prime-age workers now exceed pre-pandemic levels by almost 2.2 million.
That growth is taking a little heat out of the job market and could help the Federal
Reserve’s efforts to tamp down inflation by keeping wage growth in check.
Women lead the way
The resurgence of mid-career workers is driven by women taking jobs.
The labor-force participation rate for prime-age women was the highest on record, 77.8% in June.
That is well up from 73.5% in April 2020.
Men, however, tend to be employed at higher rates. The overall prime-age participation rate rose in
June to 83.5%, the highest since 2002.
The big draw: a tight labor market. The unemployment rate has hovered near a half-century low for
more than a year, and job openings outnumber the ranks of unemployed. Employers can’t be as choosy
or selective, William Rodgers, vice president and director of the Institute for Economic Equity at
the St. Louis Fed, said earlier this month.
Employers “are more apt to be willing to work with candidates—in this case, it’s working with moms,
or parents in general,” he said. “Tight labor markets can help to punish those
who discriminate in hiring and compensation.”

Other factors are also at play. Women aren’t having as many children—there
were about 3.66 million births in 2022, 655,000 fewer than the peak in 2007—so child-care
responsibilities have decreased.
Julia Pollak, chief economist at ZipRecruiter, said it is possible for women’s participation to
rise further if employers adopt or the government requires additional family-friendly policies.
U.S. female participation lags behind that of other industrialized economies in part because of the
cost of child care, which is subsidized elsewhere.






Rising wages lure workers, counter demographic shifts
Employers raised wages, offered employees more flexibility and improved benefits in recent years.
Average wage gains remain elevated this year and have recently surpassed inflation. And Americans
are logging more hours of work from home than they did before the pandemic.
Employer recruitment efforts helped offset some broader demographic shifts, including an aging
population and rise in retirements.
The share of the population age 55 and over in the labor force climbed steadily from the mid-1990s
through the 2008 financial crisis and remained elevated for more than a decade.
The Covid-19 pandemic pushed many out of the workforce, and some older workers
haven’t returned, particularly those over 65.


















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Much of the decline in the overall participation rate was anticipated as baby boomers aged out of
the workforce, but the rise in prime-age workers meant the drop wasn’t as steep.
The Congressional Budget Office in January 2020, just before the pandemic hit, forecast the overall
participation rate to deteriorate steadily through the 2020s, moving down to 62.4% in the second
quarter of this year
Instead, the rate was a couple of ticks higher in June at 62.6%, supported by prime-age workers.
“It seems like there is almost no cap on the supply of workers, only a speed limit on how fast we
can bring them in,” Pollak said, referring to both rising prime-age participation and an influx of
immigrants into the workforce.



























Trends could turn if the economy cools

There are concerns that the Fed’s campaign to bring down inflation through higher interest rates
will cause unemployment to rise too much and push some of the most vulnerable workers back to the
The median forecast among Fed officials shows the unemployment rate rising to 4.1% by the end of
this year and 4.5% next year from 3.6% in June, suggesting the economy will shed tens of thousands
of jobs.
Labor-force participation tends to be cyclical, rising when the economy is strong and falling
during downturns. A weaker labor market combined with structural barriers to employment could cap
further gains.
With “current strength of labor demand set to fade, further progress from here will
probably be more gradual,” Andrew Hunter, deputy chief U.S. economist at Capital
Economics, said in a research note.