“The baby boomers are retiring from relatively high-wage jobs while young people, who start at relatively low wages, are still pouring in to the labor market. This slows the growth of wage rates at a given unemployment rate, leading to lower unemployment at a given rate of wage growth.” (The CBO, January 13, 2017 Projections)
The continued retirement of the baby-boom generation is the most crucial factor driving down the overall participation rate.
As the age-sex composition of the American population changes over time, it will end to drive down the labor force participation rate.
Nonetheless the CBO projections suggest that the participation rate could rise slightly just after 2017. Note that the projected decline in the participation rate over time is faster for men than for women.
The labor force participation rate is the number of people who are either working or seeking work as a share of the civilian non-institutionalized population age 16 years or older.
The CBO’s Long-Term Projection Of U.S. Labor Force Participation Rate (Jan. 13, 2017)
