positive co-movement between employment and wages is closer to the exception than the norm in modern U.S. history. Second, most estimates of the wage elasticity of male labor supply are small, suggesting that male employment responds little to persistent wage changes. And third, prominent labor demand forces were found in a recent review to account for less than half of observed decline in U.S. employment since 1999 (Abraham and Kearney, 2018). These facts suggest that factors beyond labor demand are necessary to explain the secular decline in noncollege men’s involvement in the labor market.
Pointer from Tyler Cowen.
This decline in male labor force participation among those without a college degree is a significant issue. Note that even though the unemployment rate has come down for those workers, their rate of labor force participation is still way down.
Economists on the left tend to assume that this is due to a drop in demand for workers at the low end of the skill distribution. Binder’s claim is that instead one factor in declining participation is an increase in the ability of women to participate in the labor market, which in turn lowers the advantage of marrying a man. The reduced interest in marriage on the part of women attenuates the incentive for men to work.
Like all economic research of this kind, I would take this with a grain of salt. But if it is true, then I would say that if we could substitute a universal basic income for our current in-kind transfer programs, then the marginal tax rate for the working class would go down, and this might restore some of the incentive for marriage.
increase in the ability of women to participate in the labor market, which in turn lowers the advantage of marrying a man.
Also, there was a defined sex discrimination labor market in 1960 in which:
1) Firms made borderline personal decisions based on sex. So it two workers were relatively equal, firms 80% hired and promoted the man.
2) Girls were socialized to be married and not look for a career. In 1960, there were 60% men in college and now we see the opposite of 60% women.
The growth in the informal labor sector in the USA is a contributing factor: https://www.stlouisfed.org/on-the-economy/2017/april/informal-labor-market
As are increased rates of incarceration and increases in the population diagnosed with depression, autism, and other conditions.
The differences in non-college male labor force participation trends by race also tend to suggest that there is no single explanation.
One wonders how many prime age non-college males are not participating in the labor force because they are in college. With kids taking 6 years to get a BA degree nowadays, that has to account for something.
And one has to wonder about the participation rate of retired military. Not just medically retired war casualties, but regular retirees after 20 years service. Looking at the DOD figures that population seems to have broken.
People apparently are making livings selling stuff on e-bay now.
And the agricultural/ non-agricultural line seems pretty blurry. I know plenty of guys who farm and build houses at the same time. Since they negotiate their own rates per job, they don’t show up as having jobs, yet they don’t get all their income from farming either.
Are there still day traders out there? I had a cousin without a degree who lived off his inheritance by playing the stock market.
One wonders too about how immigrants are represented in the numbers. There are undoubtedly several hundred green card applicants waiting on their I-731 (or whatever the permission to work form is) to be processed. And quite a few more learning English and getting certificates so they can work.
Just not sure it is one big issue and not a lot of little issues.
In a youtube video by a guy who is now a solo jobber plumber discussing the skilled trade shortage, he bought up an experience when he was trying to hire early in the 2000s. A lot of the guys had DUIs, speeding tickets, etc. and the insurance company said that if he hired them, they’d likely drop his whole companies coverage. As many of the non-college jobs are now mobile or require handling machinery, the insurance question looms large. Couple that with fewer high schoolers having any experience with using basic tools. Things that used to be learned helping out a father or by fixing up your first car.
https://youtu.be/1NEOFfuKlTo?t=401
Binder is noting that more women working has this effect, it:
lowers the advantage of marrying a man.
This is true both for getting married and staying married, especially to a problematic guy.
Arnold uses this stick to beat one of his favorites: we could substitute a universal basic income for our current in-kind transfer programs… might restore some of the incentive for marriage
This is very likely false. Any politically acceptable UBI would result in even LESS marriage by non-college guys. When small scale UBI experiments are tried and the marriage rates of non-college men are measured, I’m sure those marriage rates will be lower.
Because UBI allows more men to “pursue their passions; do what they love”, living in their parents basement playing video games and getting UBI, but no dates, will become ever more popular. Especially among the non-college guys.
Likely combined with lower testosterone, lower sperm count, and likely much higher environmental estrogen and other hormone pollutants, which are beyond the scope of this rant.
Women want sex, companionship, fun, attention, care for children, and better finances, among their many desires, including RESPECT for themselves and their spouse. UBI doesn’t give self-respect.
Jobs allow folk to earn self-respect. Rather than support UBI, the USA and all OECD countries need more focus on actually increasing the employment rates, with real jobs and even with more marking-time jobs that produce low value economic products.
Tho with both “health care” and “education” being fields of great growth, there should be far more jobs available taking care of the old, the young, and the disabled. For low amounts of cash, but around 80% of an Army private, or more in some areas. Hiring more low skilled folk in these areas for low wages won’t immediately reduce the costs there, but should increase the number of semi-skilled and then skilled, experienced workers in those fields.
And all work increases the work habits of those working.
Binder is right that there is a relationship between less marriage and fewer jobs for non-college men; whether he’s getting that relationship right or not is what his 98 pages is supposed to show. His conclusion:
This paper expands a growing body of theory and evidence linking marriage market forces to human capital investments.
The marriage market forces are real. And the non-college men are the biggest losers, so far.
But there’s also growing talk about the college grad women who are almost childless and often looking, unsuccessfully, for good, eligible (more educated and/or higher paid) men.
The overall participation rate for 25-54 year-olds has been rising from it’s bottom of 81% (2014-2016) to 83% today, which is getting close to the average from 1989-2009, before it began that prolonged drop-off from which it has recently recovered. The overall employment-population ratio from the same cohort has climbed from a post-recession low of 75% to 80.5%, again around what was typical in that earlier 20-year-long period.
The overall participation rate, however, has been stuck at the post-recession bottom of near 63% which was reached in about 2014.
True, that’s not broken down by sex, but it seems to mean that whatever trouble there may be lies mostly outside the prime-age window.