Why are so many prime age (25 to 54) men not in the labor force? This has gone from 3% to 12% over the last 50 years.
One reason may be jail time. How so?
First off, labor force participation is counting the labor force divided by population. In this case we’re just taking the prime age male subset of that.
Secondly, men in jail won’t affect this number. This is because it is “civilian non-institutional” population that is used for these calculations. Institutions includes prison.
Third, there are a bunch of factors pushing up male non-participation generally across developed countries: job-destroying technological improvements, trade, the internet, and changing life choices. The thing is, these explain why this is going up everywhere, but not why it is worse in the U.S. (click through for the interactive chart).
One factor that is different between the U.S. and other countries is that we have incarcerated a larger share of our population historically, but especially over the last few decades.
So a possibility that economists are actively studying is whether American men are not working has to do with “checking the box” that they are a convicted felon on a job application. If places won’t hire you because you’re a convicted felon, it’s probably easy to just drop out of the labor force. Some states are not waiting for evidence, and have made such checkboxes illegal.
Cross-posted from SUU Macroblog, which is required reading for my macroeconomics classes.