The male labor force participation rate in the U.S. has been falling for generations, perplexing economists who have struggled to come up with an explanation.
When young males grow up seeing weak wages and high unemployment among the men around them, they form pessimistic expectations about their own prospects later in life, making them less likely to participate in the labor force, the economists explained.
“Our findings suggest that experience effects can turn short-run declines in labor demand into long-run declines in labor supply,” they wrote.
The phenomenon persisted even after men moved to a different state, and the effects were stronger among men exposed to the experiences of their own racial group.
In addition, the paper said childhood exposure explained nearly all of the labor force participation dynamics and that men’s expectations for their own wages or employment were based on lifetime experiences—and not macroeconomic conditions like national unemployment or inflation.
“It is the labor market environment men grow up in, more than what they observe as adults, that shapes their later participation,” Levin and Vidart concluded. “This points to the formative years as the critical window for belief formation about returns to work, with implications for how policy interventions might most effectively cultivate lasting labor force attachment among men.”
For policymakers, a more effective response to declining male participation may entail managing expectations by cultivating credible, long-run beliefs in the value of work, they said.
But there was a clear gender divide. Young men with at least a bachelor’s degree spent an average of 14 hours less annually on the job between 2019 and 2022. The decline was far less over the same period for similarly qualified women, who worked three fewer hours.
Since 1980, men without degrees have seen their weekly earnings decline by 17%, while those of college-educated men rose by 20%, adjusting for inflation.
The Boston Fed study found that the drop in earnings for non-college-educated men over the last four decades has increased their likelihood of leaving the labor force by nearly half a percentage point. That also accounts for 44% of the increase in their exit rate.
“If the increasing wage gap between high and low earners directly or indirectly affects men’s aggregate labor supply, wage inequality might have carried wider implications to the economy than previously believed,” Pinghui Wu, the author of the study, wrote.
