The Declining Labor Market Prospects of Less-Educated Men

Abstract

Over the last half century, US wage growth stagnated, wage inequality rose, and the labor-force participation rate of prime-age men steadily declined. In this article, we examine these worrying labor market trends, focusing on outcomes for males without a college education. Though wages and participation have fallen in tandem for this population, we argue that the canonical neoclassical framework, which postulates a labor demand curve shifting inward across a stable labor supply curve, does not reasonably explain the data. Alternatives we discuss include adjustment frictions associated with labor demand shocks and effects of the changing marriage market—that is, the fact that fewer less-educated men are forming their own stable families—on male labor supply incentives. In the synthesis that emerges, the phenomenon of declining prime-age male labor-force participation is not coherently explained by a series of causal factors acting separately. A more reasonable interpretation, we argue, involves complex feedbacks between labor demand, family structure, and other factors that have disproportionately affected less-educated men.

Have the Baltic Countries Run Out of Labour Reserves?

“…The employment rate of men aged 45-59 is almost 10 pp lower in Latvia and Lithuania than in their EU peers. In line with the international evidence (Binder & Bound, 2019), underemployment is particularly severe among the upper-middle-aged men without a tertiary education degree. Their employment rate is one of the lowest in the EU, which is likely to reflect a low incidence of lifelong learning, insufficient digital skills and a rapidly deteriorating health condition.…”

“…Academic literature often ties low men employment with ever-decreasing labour demand for unskilled men (Binder & Bound, 2019). Although all three Baltic countries are characterised by decent quantitative indicators of education, the quality of education varies.…”

Labor Market Trends and Outcomes: What Has Changed since the Great Recession?

“…Similarly, declining work among less-educated men cannot be fully explained by their stagnant or declining wages (Binder and Bound 2019). For African American men, criminal records and perhaps child support arrears reduce labor force participation (Eberstadt 2016; Holzer, Offner, and Sorenson 2005).…”

How Does Immigration Fit into the Future of the U.S. Labor Market?

“…20 Instead, research has attributed it to factors ranging from low demand (and low wages) to changes in marriage and family structure to incarceration policies to the opioid crisis, among others. 21 While there is considerable talk about the labor-displacing effects of automation, which is discussed in greater detail in Section VII, there is also concern that broader technological changes have reduced the share of jobs in the middle of the skills distribution while largely sparing the top and bottom, which economists term labor market polarization. 22 Labor market polarization involves what has sometimes been described as a "hollowing out" of the middle class due to declining employment opportunities for mid-skill workers.…”