force participation rate for prime-aged U.S. women has stalled, not improving in the 27 years between 1990 and 2017, according to the OECD
. By comparison, many other industrialized countries experienced significant increases in the female participation rate of prime-aged workers.
France, the UK, and the U.S. were in a similar spot in 1990. Around three-quarters of women between the ages of 25 and 54 were participating in the labor force in each country. Back in 1990, Germany and Japan had prime-age female labor force participation rates about ten percentage points lower than the other three countries.
Over twenty-five years later, the share of women in the economy surged for Germany, Japan, the UK, and France. All the European countries included in the chart have at least eight in ten prime-age women participating in the labor market. While Japan’s prime-age women worker participation rate shot up by about 10 percentage points, and now stands at 77 percent. The United States participation rate has moved by a single percentage point in that same time frame.
The labor force participation rate measures what portion of the general population is currently employed or looking for work. The unemployment rate, on the other hand, only tracks people who are actively looking for work. The unemployment rate has been historically low, hitting 3.8 percent for the United States. Since 2000, the labor force participation rate in the U.S. has dropped significantly as well, particularly for women. The low unemployment and labor participation indicate that there are many people simply not participating in the economy.
Some economists believe that the fractured state of parental leave in the United States is one of the factors contributing to the plateau in women’s labor force participation during their prime working years. Another reason for the low labor force participation could be related to the ripple effects of the Great Recession. Many workers did not reenter the labor force after the Great Recession because of stalled wages
. Engaging prime-age workers in the economy is important for efficiently generating growth by utilizing all the labor resources available for producing goods and services in a given country.