Figures and tables in What happened to the ‘Great American Jobs Machine’?

Abstract

In the 1980s and 1990s the US employment rate increased steadily, and by 2000 it was one of the highest among the rich democratic nations. Since then it has declined both in absolute terms and relative to other countries. We use an in-depth comparison between the United States and the United Kingdom to probe the causes of America’s poor recent performance. Contrary to a common narrative, a comparative perspective suggests that the decline in US labour force participation is not confined to the (white) male population; the divergence in the female participation rate is even more pronounced. We do not find evidence that the poor US performance is linked to cyclical patterns, such as the 2008–09 Great Recession; instead, it is a more pervasive, longer-run phenomenon. The relative decline of US participation rates compared to the UK is attributable to shifts in socio-demographic characteristics, such as education, and to shifts in the impact of those characteristics, which have become more adverse to participation.

This article contains 12 figures and 11 tables.

Figures

**Figure 1.** Labour force participation rates. Population aged 15–64.

**Figure 2.** Employment rates. Population aged 15–64.

**Figure 3.** Male labour force participation rate by age group.

**Figure 4.** Female labour force participation rate by age group.

**Figure 5.** Observed vs. fitted participation rates, (a) US males, (b) UK males, (c) US females, (d) UK females. Coefficients as in Table 2.

**Figure 6.** Estimated age effects: Participation probability at average values of other variables.

**Figure 7.** Estimated cohort effects: Participation probability at average values of other variables.

**Figure 8.** (a) Labour force participation rate, age 25–54, men, (b) Labour force participation rate, age 25–54, women The line for the United States is in bold.

**Figure 9.** (a) Less than upper secondary education, age 25–64, (b) Bachelor’s degree or more, age 25–34. The line for the United States is in bold.

**Figure B1.** Goodness of fit, alternative models. Note: Each panel reports the log likelihood (ll) of the models and the Akaike Information Criterion (AIC), normalised by the values achieved by the best fit (m3). Higher is better for ll, while lower is better for AIC. Models as in table B1. (a) US males, (b) UK males, (c) US females, (d) UK females.

**Figure C1.** (a) Oaxaca-Blinder decomposition of the estimated US participation gap by age group and sub-periods, males.

**Figure C1.** (b) Oaxaca-Blinder decomposition of the estimated US participation gap by age group and sub-periods, females.

Tables

Table 1. Average values

	US			UK
	1996	2017		1996	2017
Active	0.775	0.743		0.778	0.798
Student	0.106	0.150		0.070	0.088
NEET (15-24) (a)	0.232	0.220		0.241	0.175
Age	37.0	38.5		38.1	40.1
Year of birth	1959.0	1978.5		1957.9	1976.9
Race black	0.099	0.123		0.015	0.030
Race other	0.049	0.108		0.040	0.103
Hispanic	0.152	0.204
Foreign born	0.150	0.192		0.078	0.177
Foreign national	0.094	0.102		0.047	0.142
Education low	0.202	0.156		0.359	0.164
Education medium	0.581	0.545		0.442	0.447
Education high	0.218	0.299		0.199	0.388
Household single alone	0.272	0.312		0.260	0.283
Household single cohabiting	0.020	0.043		0.054	0.121
Household married alone	0.009	0.013		0.016	0.003
Household married cohabiting	0.565	0.510		0.557	0.487
Household separated alone	0.025	0.019		0.024	0.023
Household separated cohabiting	0.002	0.003		0.004	0.003
Household divorced alone	0.082	0.070		0.052	0.048
Household divorced cohabiting	0.012	0.018		0.019	0.023
Household widowed alone	0.012	0.011		0.013	0.009
Household widowed cohabiting	0.001	0.002		0.001	0.001
Number of children	0.953	0.950
Household child under 2 (b)	0.080	0.065		0.078	0.074
Household child 2–4 (c)	0.090	0.084		0.114	0.116
Household child 5–9 (d)	0.105	0.104		0.173	0.182
Household child 10–15 (e)	0.105	0.111		0.210	0.206
Health bad	0.092	0.097		0.152	0.139
Home owned	0.664	0.645		0.729	0.646
Home owned outright				0.154	0.199
Home owned mortgage				0.576	0.447
Rural	0.220	0.172
Unemployment rate (regional or state level)	0.061	0.048		0.084	0.045
GDP per capita (national currency)	29,615	58,081	(2016)	15,526	30,850
Minimum wage (% of GDP per capita) (f)	0.154	0.147	(2016)	0.000	0.233
Social expenditure family (% of GDP) (g)	0.5	0.7	(2016)	2.2	3.8
Social expenditure total (% of GDP) (h)	14.8	19.3	(2016)	18.1	21.5
Maternity total protected (weeks) (i)	12	12	(2016)	40	70
Maternity total paid (weeks) (j)	0	0	(2016)	18	39
Paternity total specific (weeks) (k)	12	12	(2016)	0	20
Paternity total specific paid (weeks) (l)	0	0	(2016)	0	2
AFDC/TANF/SNAP (m)	29.3	21.2	(2016)
SSI federal (n)	16.4	13.4	(2016)
EITC2max (o)	124.0	102.0	(2016)
EITC state (p)	0.027	0.160	(2016)

Not in employment, education or training.

UK: presence of children below 2. US: youngest child below 2.

UK: presence of children aged between 2 and 4. US: youngest child aged between 2 and 4.

UK: presence of children aged between 5 and 9. US: youngest child aged between 5 and 9.

UK: presence of children aged between 10 and 15. US: youngest child aged between 10 and 15.

UK: national minimum wage. US: state minimum wage. Normalised by GDP per capita (000).

Social expenditures on family policies (% of GDP).

Social expenditures, total (% of GDP).

Maximum weeks of job-protected maternity, parental and home care leave available to mothers, regardless of income support.

Total weeks of paid maternity, parental and home care payments available to mothers.

Total weeks of leave reserved for exclusive use by the father.

Total weeks of paid leave reserved for exclusive use by the father.

Combined monthly maximum AFDC/TANF and Food Stamps benefits for a 4-person family. Normalised by GDP per capita and multiplied by 1,000.

EITC maximum credit for two dependents. Normalised by GDP per capita (000).

Monthly maximum federal SSI benefits for individuals living independently. Normalised by GDP per capita (000).

State EITC rate as percentage of Federal credit.

Table 2. Logit estimates of the probability of being in the labour force

	(1)		(2)		(3)		(4)
	US		UK		US		UK
	Male		Male		Female		Female
Variables	16–64		16–64		16–59		16–59
Age	0.123	***	0.178	***	0.076	***	0.156	***
Age squared	−0.002	***	−0.003	***	−0.001	***	−0.002	***
Year of birth	0.029	***	0.047	***	0.034	***	0.056	***
Year of birth squared	0.000	***	0.000	***	0.000	***	0.000	***
Race black	−0.479	***	−0.315	***	0.174	***	0.231	***
Race other	−0.367	***	−0.447	***	−0.109	***	−0.712	***
Foreign born	0.311	***	0.222	***	0.003		−0.063	***
Foreign national	0.112	***	−0.082	***	−0.519	***	−0.043	***
Hispanic	0.111	***			0.105	***
Education high	−31.25	***	−4.44		−24.42	***	10.35	***
Education low	3.050		5.772	*	−13.140	***	25.070	***
Health bad	−8.532	**	−47.640	***	29.210	***	0.993
Year x health	0.003	*	0.023	***	−0.015	***	−0.001
Year x education high	0.016	***	0.002		0.012	***	−0.005	***
Year x education low	−0.002		−0.003	*	0.006	***	−0.013	***
Household single cohab	0.735	***	0.617	***	0.191	***	0.212	***
Household married alone	0.639	***	0.804	***	−0.050	*	−0.167	***
Household married cohab	0.899	***	0.730	***	−0.384	***	−0.141	***
Household separated alone	0.443	***	0.361	***	0.200	***	0.037	*
Household separated cohab	0.548	***	1.030	***	0.063		0.399	***
Household divorced alone	0.486	***	0.307	***	0.315	***	0.206	***
Household divorced cohab	0.793	***	0.689	***	0.197	***	0.300	***
Household widowed alone	0.133	***	0.238	***	−0.431	***	−0.084	***
Household widowed cohab	0.351	***	0.544	***	−0.248	***	0.059
Household child under 2	0.041		−0.114	***	−0.967	***	−1.479	***
Household child 2–4	0.013		−0.205	***	−0.645	***	−1.283	***
Household child 5–9	0.067	***	−0.225	***	−0.285	***	−0.759	***
Household child 10–15	0.169	***	−0.145	***	0.071	***	−0.429	***
Number of children	0.139	***			−0.094	***
Home owned	0.068	***			0.182	***
Unemployment rate	−1.215	***	−0.023		0.615	**	−0.038
Post-crisis	0.116	***	0.089	**	0.083	***	0.043
Minimum wage	−0.546		−0.243	*	0.910	***	−0.010
Social expenditure family	−0.104	**	−0.031		0.091	**	0.005
Social expenditure total	−0.008		−0.010		−0.021	**	−0.008
AFDC/TANF/SNAP	−0.014	***			−0.018	***
SSI federal	0.003				0.022
EITC2max	0.000				0.000
EITC state	−0.022				0.019
Rural	−0.137	***			0.007
Home owned outright			0.240	***			0.320	***
Home owned mortgage			1.232	***			1.056	***
Maternity total protected			−0.007	***			−0.008	***
Maternity total paid			0.006	***			0.000
Paternity total specific			0.007	*			0.007	***
Constant	1.127	***	−0.792		0.461	**	−3.431	***
Observations	1,063,351		718,417		1053301		704,235
chi2	97,216		120,525		79,867		120,176
P	0.000		0.000		0.000		0.000
r2_p	0.239		0.364		0.118		0.246

Notes: Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1.

Students excluded. The baseline is a medium education white individual, single and not cohabiting, living in urban California (US) or central London (UK), and renting. Cohort is measured subtracting 1,900 from year of birth. State (US) and NUTS1 (UK) regional dummies included.

Table 3. Effects of education and health over time

		Males				Females
		US		UK		US		UK
Case	Reference category	1996	2017	1996	2017	1996	2017	1996	2017
Education High	Education Medium	0.29	0.62	0.04	0.08	0.33	0.59	0.57	0.47
Education Low	Education Medium	−0.58	−0.62	−0.40	−0.46	−0.80	−0.67	−0.48	−0.75
Health Bad	Health Good	−2.16	−2.10	−2.73	−2.26	−1.33	−1.65	−1.90	−1.93

Notes: The table reports the contribution to the logit score from Table 2. The non-linearity of the logit function means that the same increase in the logit score has a different impact on the estimated probability depending on the starting value of the score.

Table B1. Alternative specifications

Model name	Treatment of period effect	Linear age and cohort effects identifiable	Policy effects identifiable
m0	No period effects	Yes	No
m1	Period effects captured by macroeconomic variables	Yes	Yes
m2	Time dummies	No	only policy differentials in the US
m3	Time*region dummies	No	No

Table C1a. Oaxaca-Blinder decomposition of the estimated US participation gap, males

Males, 16–64	1996–2007		2008–2017
UK mean	87.2%		87.8%
US mean	87.1%		84.7%
difference UK-US (pp)	0.14		3.12
of which:
endowments (pp)	−1.75		−0.04
coefficients (pp)	1.83		3.86
interaction (pp)	0.06		−0.70
	endowments	coefficients	Endowments	Coefficients
Overall (pp)	−1.75	1.83	−0.04	3.86
Contribution of each covariate (pp):
APC	−0.77	−1.04	−0.01	−0.25
Race black	0.78	0.46	−0.05	0.44
Race other	0.03	−0.06	0.00	−0.08
Foreign born	−0.34	0.08	0.02	0.19
Foreign national	−0.08	−0.23	−0.01	−0.26
Education high	−0.12	−0.63	−0.04	−1.34
Education low	−1.50	0.27	0.07	0.16
Household single cohab	0.61	0.01	−0.06	0.07
Household married alone	−0.14	0.05	0.01	0.06
Household married cohab	−0.29	−1.08	0.03	0.69
Household separated alone	−0.00	−0.02	−0.00	0.09
Household separated cohab	0.02	0.01	−0.00	0.03
Household divorced alone	−0.27	−0.13	0.01	0.11
Household divorced cohab	0.11	0.00	−0.00	0.08
Household widowed alone	0.00	0.00	0.00	0.02
Household widowed cohab	0.00	0.00	−0.00	0.00
Household child under 2	−0.00	−0.27	−0.01	−0.25
Household child 2–4	−0.01	−0.36	−0.00	−0.28
Household child 5–9	−0.00	−0.35	−0.00	−0.38
Household child 10–15	0.07	−0.28	−0.00	−0.29
Home owned	0.16	5.41	−0.00	5.07
Unemployment rate difference	−0.02	−0.00	0.00	−0.00

Note: Cells with a positive (negative) contribution to the US participation gap of more (less) than one pp are highlighted in red (green).

Table C1b. Oaxaca-Blinder decomposition of the estimated US participation gap, females

Females, 16–60	1996–2007		2008–2017
UK mean	75.1%		78.6%
US mean	74.9%		74.0%
difference UK-US (pp)	0.17		4.54
of which:
endowments (pp)	−4.05		−1.17
coefficients (pp)	3.26		6.61
interaction (pp)	0.95		−0.91
	endowments	coefficients	endowments	Coefficients
Overall (pp)	−4.05	3.26	−1.17	6.61
Contribution of each covariate (pp):
APC	−0.14	−2.55	0.54	1.14
Race black	−0.15	0.35	−0.11	0.34
Race other	0.01	−0.36	−0.02	−0.69
Foreign born	−0.01	−0.02	−0.05	0.08
Foreign national	0.13	0.36	−0.50	0.64
Education high	−0.23	0.31	1.09	−0.32
Education low	−4.32	0.27	−2.47	−0.03
Household single cohab	0.30	0.06	0.56	0.10
Household married alone	0.02	0.02	0.01	0.00
Household married cohab	0.29	2.54	0.67	2.39
Household separated alone	0.01	−0.01	0.01	0.03
Household separated cohab	0.00	0.01	−0.00	0.02
Household divorced alone	−0.25	−0.11	−0.15	0.12
Household divorced cohab	0.05	0.05	0.02	0.08
Household widowed alone	0.03	0.07	0.13	0.13
Household widowed cohab	−0.00	0.01	0.01	0.02
Household child under 2	−0.02	−0.95	−0.51	−0.87
Household child 2–4	0.01	−1.04	−0.28	−1.08
Household child 5–9	0.02	−0.76	−0.03	−0.69
Household child 10–15	−0.00	−0.51	−0.00	−0.48
Home owned	0.23	5.51	−0.06	5.68
Unemployment rate difference	−0.04	0.00	−0.01	−0.00

Note: Cells with a positive (negative) contribution to the US participation gap of more (less) than one pp are highlighted in red (green).

Table C2. Trends in educational attainment by gender (sample frequencies)

	Male				Female
	US		UK		US		UK
	1996	2017	1996	2017	1996	2017	1996	2017
Education Low	0.210	0.167	0.320	0.182	0.194	0.145	0.399	0.146
Education High	0.229	0.279	0.210	0.366	0.206	0.319	0.189	0.411

Table C3a. Oaxaca-Blinder decomposition of the estimated US participation gap by age group and sub-periods, males

Gender	Male		Male		Male
age group	16–19		20–29		30–39
Period	1996–2007	2008–2016	1996–2007	2008–2016	1996–2007	2008–2016
overall (pp)	10.6	12.9	3.0	4.7	1.3	2.7
endowments	−0.7	3.5	0.1	1.0	−0.3	0.9
Coefficients	9.3	7.3	2.4	4.7	1.6	2.3
Interaction	2.1	2.1	0.5	−1.1	0.0	−0.5
age group	40–49		50–59		60–64
Period	1996–2007	2008–2016	1996–2007	2008–2016	1996–2007	2008–2016
overall (pp)	1.0	3.2	–0.7	3.5	–4.1	–2.1
endowments	−0.6	−0.2	−2.7	−0.9	−3.1	−3.9
Coefficients	1.6	4.2	1.5	4.9	−1.6	0.0
Interaction	0.0	−0.8	0.6	−0.5	0.6	1.9

Table C3b. Oaxaca-Blinder decomposition of the estimated US participation gap by age group and sub-periods, females

Gender	Female		Female		Female
age group	16–19		20–29		30–39
Period	1996–2007	2008–2016	1996–2007	2008–2016	1996–2007	2008–2016
overall (pp)	13.3	13.9	1.1	3.4	–0.1	3.8
endowments	2.9	4.8	1.1	0.7	−3.0	−1.2
Coefficients	6.6	7.4	0.0	3.8	3.2	6.4
Interaction	3.9	1.7	−0.1	−1.0	−0.3	−1.4
age group	40–49		50–59
Period	1996–2007	2008–2016	1996–2007	2008–2016
overall (pp)	1.4	5.5	–2.5	4.2
endowments	−5.3	−1.7	−9.4	−3.2
Coefficients	5.1	7.8	2.5	7.1
Interaction	1.7	−0.6	4.4	0.3

Table D1. Logit estimates of the probability of being in the labour force, common specification, males. Students excluded

	(1)		(2)		(3)		(4)
	US		UK		US		UK
	M 16–64		M 16–64		M 16–64		M 16–64
VARIABLES	1996–2007		1996–2007		2008–2017		2008–2017
Age	0.094	***	0.066	***	0.123	***	0.154	***
Age squared	−0.002	***	−0.002	***	−0.002	***	−0.003	***
Year of birth	0.038	***	0.087	***	0.007		0.022	**
Year of birth squared	0.000	***	−0.001	***	0.000		0.000	***
Race black	−0.583	***	−0.072		−0.480	***	−0.058
Race other	−0.492	***	−0.619	***	−0.376	***	−0.489	***
Foreign born	0.347	***	0.408	***	0.442	***	0.556	***
Foreign national	0.189	***	−0.099	***	0.352	***	0.067	**
Education high	−13.91		6.15		−34.72	***	22.41	*
Education low	−25.92	***	13.19	**	−2.11		35.67	***
Year x education high	0.007	*	−0.003		0.018	***	−0.011	*
Year x education low	0.013	***	−0.007	**	0.001		−0.018	***
Household single cohab	0.764	***	0.817	***	0.758	***	0.934	***
Household married alone	0.766	***	1.150	***	0.772	***	1.253	***
Household married cohab	1.115	***	0.884	***	0.941	***	1.085	***
Household separated alone	0.529	***	0.387	***	0.263	***	0.758	***
Household separated cohab	0.670	***	1.358	***	0.454	***	1.513	***
Household divorced alone	0.512	***	0.310	***	0.387	***	0.547	***
Household divorced cohab	0.953	***	0.965	***	0.694	***	1.152	***
Household widowed alone	0.267	***	0.289	***	0.072		0.359	***
Household widowed cohab	0.455	***	0.775	***	0.323	**	0.925	***
Household child2	0.252	***	−0.235	***	0.351	***	−0.120	***
Household child4	0.290	***	−0.298	***	0.288	***	−0.178	***
Household child9	0.270	***	−0.206	***	0.388	***	−0.126	***
Household child15	0.349	***	−0.024		0.416	***	0.038
Home owned	0.195	***	1.176	***	0.158	***	1.026	***
Unemployment rate diff	−6.934	***	−7.906	***	−3.925	***	−4.687	***
1996	0.034		−0.105	***
1997	0.070	**	−0.131	***
1998	0.063	**	−0.186	***
1999	0.027		−0.166	***
2000	0.044		−0.165	***
2001	0.022		−0.198	***
2002	0.012		−0.192	***
2003	−0.045	*	−0.122	***
2004	−0.078	***	−0.148	***
2005	−0.060	**	−0.139	***
2006	−0.018		−0.063	**
2007
2008					0.025		−0.251	***
2009					−0.032		−0.231	***
2010					−0.017		−0.241	***
2011					−0.081	***	−0.184	***
2012					−0.078	***	−0.139	***
2013					−0.017		−0.106	***
2014					−0.007		−0.057	*
2015					−0.015		−0.050
2016					0.006		−0.017
Observations	580,515		444,333		530,802		274,084
chi2	144,667		159,295		118,940		95,339
P	0.00		0.00		0.00		0.00

Notes: Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

The baseline is a medium education white individual, single and not cohabiting, who is renting. Cohort is measured subtracting 1,900 from year of birth.

Table D2. Logit estimates of the probability of being in the labour force, common specification, females. Students excluded

	(1)		(2)		(3)		(4)
	US		UK		US		UK
	F 16–59		F 16–59		F 16–59		F 16–59
VARIABLES	1996–2007		1996–2007		2008–2017		2008–2017
Active
Age	0.042	***	0.063	***	0.110	***	0.135	***
Age squared	−0.001	***	−0.002	***	−0.002	***	−0.002	***
Year of birth	0.050	***	0.059	***	−0.024	***	−0.005
Year of birth squared	0.000	***	−0.001	***	0.000	***	0.000
Race black	0.060	***	0.325	***	0.033	**	0.223	***
Race other	−0.154	***	−0.738	***	−0.177	***	−0.771	***
Foreign born	0.009		−0.003		0.077	***	0.109	***
Foreign national	−0.432	***	−0.025		−0.435	***	0.067	***
Education high	8.42		−2.257		−53.80	***	−0.227
Education low	−37.16	***	44.29	***	−20.75	**	0.278
Year x education high	−0.004		0.001		0.027	***	0.000
Year x education low	0.018	***	−0.023	***	0.010	**	−0.001
Household single cohab	0.226	***	0.433	***	0.223	***	0.400	***
Household married alone	−0.084	**	0.049		−0.037		−0.031
Household married cohab	−0.317	***	0.113	***	−0.336	***	0.000
Household separated alone	0.093	***	0.061	***	0.063	**	0.157	***
Household separated cohab	0.037		0.616	***	−0.015		0.574	***
Household divorced alone	0.288	***	0.186	***	0.152	***	0.251	***
Household divorced cohab	0.238	***	0.529	***	0.132	***	0.421	***
Household widowed alone	−0.449	***	−0.108	***	−0.613	***	−0.084	*
Household widowed cohab	−0.386	***	0.134		−0.234	***	0.249	*
Household child under 2	−1.158	***	−2.259	***	−0.935	***	−1.800	***
Household child 2–4	−0.818	***	−1.871	***	−0.638	***	−1.549	***
Household child 5–9	−0.396	***	−1.010	***	−0.337	***	−0.803	***
Household child 10–15	−0.018		−0.425	***	−0.002		−0.319	***
Home owned	0.267	***	1.082	***	0.255	***	0.947	***
Unemployment rate diff	−4.673	***	−3.742	***	−1.904	***	−2.786	***
1996	−0.011		−0.281	***
1997	0.042	*	−0.263	***
1998	0.050	**	−0.242	***
1999	0.040	*	−0.199	***
2000	0.074	***	−0.176	***
2001	0.045	**	−0.161	***
2002	0.017		−0.146	***
2003	0.009		−0.147	***
2004	−0.033	*	−0.123	***
2005	−0.049	***	−0.080	***
2006	−0.036	**	−0.015
2007
2008					0.172	***	−0.138	***
2009					0.171	***	−0.123	***
2010					0.133	***	−0.123	***
2011					0.071	***	−0.118	***
2012					0.044	**	−0.101	***
2013					0.051	**	−0.040
2014					0.021		−0.046	*
2015					−0.030		−0.036
2016					−0.013		−0.032
Observations	583,535		436,474		515,633		267,761
chi2	109,824		116,367		87,444		76,039
P	0.00		0.00		0.00		0.00

Notes: Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

The baseline is a medium education white individual, single and not cohabiting, who is renting. Cohort is measured subtracting 1,900 from year of birth.