World: Will Employment Keep Growing? Disabled Workers Offer a Clue
The rise in the number of Americans not working because of disability was so persistent for two decades that some economists began to hypothesize that the trend would never reverse.
But perhaps it has. Since a peak almost four years ago, that number has steadily fallen, showing its largest decline — both in terms of head count and percentage — in at least the last 25 years. It’s good news, but it also raises important questions about how much further the labor market has to heal.
Disability and a shrinking work force
The employed share of the population 25 to 54 years old — the age range economists generally consider a person’s prime working years — is still almost a full percentage point below where it was on the eve of the Great Recession, and more than two percentage points below where it was before the 2001 recession.
One factor was a steady increase in the number of people not participating in the labor force because of health problems or a disability. In 1994, the Bureau of Labor Statistics determined that 4 percent of Americans 25 to 54 were not seeking work because of those reasons. By mid-2014, the number had risen to almost 6 percent of that age group.
Economists were especially alarmed because the increase appeared tenacious. It was rising before the 2001 recession, rose faster in response to the 2001 and 2008 recessions, then kept rising during the subsequent recoveries.
But then it began to fall: slowly at first and then, beginning in 2016, faster. Over all, the number of prime-age people who cite disability as their reason for not working has shrunk by 7 percent since mid-2014.
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