Massachusetts’ Workforce Growing Older and More Diverse, Remains Highly Educated

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State relies on highly skilled immigrants to counteract net domestic outmigration and low birth rate

BOSTON – The Massachusetts labor force is growing older, more female and workers are less likely to quit than in most other states, according to “Deep Dive: The Massachusetts Labor Force in 2023,” Pioneer Institute’s annual report on the state labor force.

“Last year, the labor participation among women in Massachusetts was nearly five points above the national average,” said Pioneer Executive Director Jim Stergios. “Women’s participation in the labor force was only six points below that of men, the narrowest gap we’ve seen.”

The Commonwealth’s women are a driving force behind New England consistently having the second highest participation rate among the Census Bureau’s nine regions. In a comparison limited to men, New England would rank fifth.

Another reason for the Commonwealth’s high labor participation rate is its highly educated workforce. At 52.1 percent, Massachusetts has the highest percentage among the states of workers 24 or older who hold a bachelor’s degree or higher. The labor participation rate among those workers is 20 points higher than for those with a high school diploma. As a result, 53.6 percent of the labor force is in management, professional and related occupations.

One threat to our highly educated workforce is the fact that post-secondary fall enrollment in Massachusetts has fallen every year but one since 2013. The Commonwealth is increasingly reliant on immigrants to pick up the slack.

The number of workers in Massachusetts aged 55 and up has increased by 191,000 since 2013 and the number who are 65 or older has doubled since 2007, as the prevalence of retirees in the overall state population has grown by 20 percent since 2015. Conversely, there were significantly more 16-19-year-olds in the labor force in 2007 than there are today.

According to WalletHub, Massachusetts’ quit rate (1.5 percent) is the lowest in the country, though it remains elevated compared to the Commonwealth’s historical average.

The labor force has become much more diverse in recent years, with the non-white portion increasing from 18 percent in 2007 to 27 percent now, although 2022 and 2023 were the first years since 2018 that the labor participation rate of white workers
surpassed that of the non-white population. The number of Hispanic workers has more than doubled since 2007.

Pandemic recovery has been uneven in Massachusetts. The overall labor force remains smaller than it was in 2019, with the number of workers in accommodations and hospitality down 7.3 percent from pre-pandemic levels and retail trade down 5.7 percent.

Massachusetts also suffers from a mismatch between the skills workers have and those that employers need, as demonstrated by the fact that the Commonwealth has 234,000 unfilled jobs and 122,000 unemployed workers.

At 3.4 percent, the Massachusetts unemployment rate is higher than in every New England state except Connecticut, but below the national average.

The influx of immigrants made up for the net loss of 39,000 residents to domestic outmigration in 2023, according to the U.S. Census Bureau. Departures were particularly prevalent among those aged 25 to 34 – individuals the Commonwealth will need for its future workforce.

Massachusetts also has a low fertility rate, with 49 births per 100,000 women aged 18- 44 in 2023. The national average is 56 per 100,000.

Author Aidan Enright recommends that policy makers improve the match between training programs and available jobs by adding an additional 5,000 seats at the Commonwealth’s vocational-technical high schools and reassessing workforce
development programs with an eye toward greater flexibility, transparency on outcomes, and addressing the most pressing employer needs.

Enright also urges the federal government to enact sensible reforms that would allow more skilled immigrants to enter the country. Currently, tens of thousands of immigrants, often with bachelor’s and master’s degrees from U.S. universities, are rejected without even having their applications adjudicated each year due to our immigration backlog.

Aidan Enright is Pioneer’s economic research associate. He previously served as a congressional intern with Senator Jack Reed and was a tutor in a Providence city school. Mr. Enright received a B.S. in Political Science and Economics from the. College of Wooster.