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August 1978

An Explanation of Movements in the Labor Force Participation Rate, 1957-76

by Leonall C. Andersen

As the economy has moved through recession and into the recent period of recovery, the unemployment rate, an important consideration in economic stabilization policy, has displayed a different pattern from that which had been observed in such cycles before 1973. In particular, the average level of the unemployment rate has remained uncharacteristically high for such an extended period of expansion. One reason often cited for this development is an unusual increase in the labor force participation rate since 1973, This ratio, which measures the proportion of the population of labor force age who either have a job or are looking for one, has risen markedly.