http://blogs.wsj.com/economics/2015/02/20/a-british-lesson-on-boosting-the-supply-side/
The article talks about changes in the labor force participation rate and unemployment rate in the United States and the United Kingdom. Both countries have had roughly comparable economic growth and unemployment rates, but the article notes that the labor force participation rate has held steady in the UK but declined in the US, despite both nations having an issue of aging populations.
The author suggests that one possible reason behind this is the raising of the retirement age in the UK which keeps people in the workforce longer and boosts labor supply, coupled with reforms to the safety net which work to do the same thing. This could potentially be an interesting set of things to consider when guiding policy in the United States, although it is worth noting that real wages have fallen in the UK, which is potentially because many jobs created are part time jobs and a larger supply of labor has led to depressed real wages.
2 comments:
I think its the safest and smartest thing to keep more people in the labor force for as long as possible if we want to sustain our American social security system. Shifting demographics don't lie, and those paying in could very soon not be able to sustain those receiving benefits.
I agree with Hannah in that the safest and smartest thing to do is keep more people in the labor force for as long as possible. However, I question if keeping people in the labor force longer would make them less productive in different sectors. Especially if they are working for their social security benefits.
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