Where Do People Go When They Drop Out of the Labor Force?

Brad Plumer

In March, the unemployment rate dropped from 8.3 percent from 8.2 percent. But that wasn’t because the economy added an enormous number of jobs.

Rather, as Sarah Kliff pointed out, it was largely due to the fact that 164,000 fewer people were actively looking for work — and they don’t count in the unemployment tallies. That raises the perennial question: Where did all these people go?

The Atlantic’s Matthew O’Brien passes along some handy survey data from Barclays that sheds a little light on this mystery. About 35 percent of the people who have dropped out of the labor force since the recession began in 2007 do want a job, but they’ve become too discouraged to fire off resumes. That’s not good. The other 65 percent are people who have left the labor force and don’t want a job. Some of them are young and perhaps decided to go back to school. But the biggest chunk, by far, seems to be composed of Baby Boomers who have decided to retire early.

Read the rest here.