Decline in labor force participation among the college educated and 25-54-year-old men may point to future labor shortages
BOSTON – The Massachusetts labor force has transformed in recent decades, with some of the biggest changes being the advancement of women, workers getting older and more diverse, and a divergence in labor force participation rates based on levels of educational achievement, according to “At a Glance: The Massachusetts Labor Force,” a white paper written by Aidan Enright and published by Pioneer Institute, with data drawn from Pioneer’s new LaborAnalytics.org website.
“Decreasing labor force participation rates among prime-aged (25-54) men and college-educated individuals may portend future labor shortages,” said Pioneer Executive Director Jim Stergios.
Nationally, the labor force participation rate among 25-54-year-old men has fallen from 96.2 percent in 1948 to 88.8 percent last year.
Massachusetts had nearly 300,000 unfilled jobs in 2021. Inadequate daycare capacity, a mismatch between the skills needed for these jobs and the skills possessed by potential workers, immigration restrictions and a spike in retirements during the pandemic are among the reasons economists cite for the shortage.
The number of individuals 65 and older in the Massachusetts workforce rose dramatically in recent years, then plateaued and decreased from 2019-21, possibly due to retirements during the pandemic. Overall, the number of older workers more than doubled between 2007 and 2021, from 131,000 to 271,000.
The increase in older workers was particularly notable among women aged 55-64. Between 2007 and 2021 an additional 105,000 women in that age group entered the workforce, compared to 79,000 men.
As a higher rate of older individuals remained in the workforce, the number of 16-19-year-old workers fell by 40,000 between 2019 and 2021.
The labor participation rate among non-whites has been higher than among white workers in every year since 2018. Minorities accounted for 18 percent of the Massachusetts labor force in 2007, rising to 30 percent in 2021. The Massachusetts workforce is still less diverse than that in many other states, but it’s by far the most diverse in New England.
In New England, Massachusetts ranked second behind New Hampshire with 62.1 percent of its total population employed in 2021. Previously, the Commonwealth also often ranked behind Connecticut and Vermont.
Massachusetts saw a notable increase in the size of its workforce between 2016-18, before shrinking during the pandemic. In 2018, the labor force participation rate reached its highest level since 2007, and the workforce was still larger in 2021 than it had been in 2016.
To ensure the future of the Massachusetts labor force the paper calls for expanding childcare capacity and better matching programs with the workers most in need, expanding vocational technical school capacity, and advocating for looser restrictions on H1-B and EB-2 visas.
Data in “At a Glance: The Massachusetts Labor” comes from Pioneer’s LaborAnalytics.org, which provides national labor force data based on the monthly Current Population Survey conducted by the U.S. Bureau of Labor Statistics and the Census Bureau.