Labor Force Participation in California

Partnered Latina Mothers and Low Labor Force Participation

For partnered Latina mothers, low participation may also reflect poor labor market opportunities given lower educational attainment (67% have at most a high school diploma), lower available wages relative to the wages they are willing to accept, immigration status, and language barriers. In light of all these barriers, it may seem more financially efficacious either not to work or to work informally, given fiscal policies like joint taxation, the Earned Income Tax Credit phase-out, and the structure of disability insurance (Barkin 2019).

Cultural norms and expectations may play a role too. Ultimately, a family’s decision about whether a parent participates in the labor force is personal, and requires balancing a host of economic, social, and family considerations. Nevertheless, some complex family decisions are amenable to policy. For example, policy shifts to lessen structural economic barriers could make a difference, widening the scope to improve individual economic outcomes and increase aggregate labor supply.

How Much Can We Affect Aggregate Labor Supply by Closing Gaps?

Many of the labor force participation gaps we’ve covered reflect barriers potentially amenable to policy action that will benefit individual and household economic outcomes. There could also be a wider benefit to such action: it could boost the labor force’s overall size. The question is, how much? For which populations? And what policy changes would be most effective?

To get at these questions, we have conducted an analysis using hypothetical scenarios focused on gender, education, and age. The results yielded a sense of what could be expected if a policy or set of policies is able to substantially reduce or eliminate key gaps in participation. We discuss them below.

Increasing participation among older Californians would have the largest impact

Increasing participation among 55–64 year-olds to match participation among those a decade younger—akin to reducing “early” retirements before age 65—would mean nearly 700,000 more California workers, recouping nearly one-third of the loss statewide since 2001.

Boosting recent improvements in participation among 55–74 year-olds by the same amount they increased since 1990 (i.e., “doubling” the increase from recent decades) would mean more than 720,000 additional workers.

Caveats: Older Californians may not want to delay retirement, and factors like health, retirement savings, and workplace amenities play an important role. But increasing participation in recent years among older adults—and even higher participation among the more educated—could mean that an increasing trend of work in older ages could partially counteract aggregate declines.

Policy examples: Addressing age discrimination in the labor market (Neumark 2019) and improving workplace flexibility (Choi-Allum 2022) could further these trends.

Policies addressing racial gaps in education would have clear impacts and are actionable

Eliminating educational attainment gaps could amount to roughly 1.2 million more workers—and over 450,000 more prime-age workers—enough to account for nearly all of the aging-related participation decline in California’s labor force since 2001. Even closing half of the education gap among prime-age adults would close roughly half of the Black-white gap, most of the Black-Asian gap, nearly all of the Latino-white gap, and all of the Latino-Asian gap in prime-age participation (Technical Appendix Tables C8 and C10).

Caveats: Eliminating educational attainment gaps can only happen gradually, especially if efforts are targeted to degree attainment among younger cohorts.

Policy examples: Efforts to improve participation among middle-aged and older workers with accumulated workforce experience and skill—but low formal education—could have a large impact in the short run (e.g., Blair, Debroy, and Heck 2021). Over the long run, improving gaps in educational progress that emerge at all junctures of pathway to career are promising (McConville et al. 2021; Cuellar Mejia et al. 2023).

Increasing participation among mothers of young children would have a modest impact in aggregate

If mothers of young children were able to take “full” advantage of childcare, so that work participation was equal to mothers with older children, the statewide participation rate would increase by less than 0.5 percent—closing about 4 percent of the overall gender gap. Even so, in the aggregate, this could put over 80,000 more women in the labor force annually.

Reducing gaps among married women would be more significant overall: entirely eliminating the gap in participation between married men and women could yield over 1 million more workers. A smaller but notable impact could be had from increasing the participation of married women to that of single women (over 200,000 more participating).

Caveats: Gaps among married women and single mothers may be less malleable to policy action, as they may reflect differences in labor market opportunities, persistence of labor force exit after young children age, differences in spousal earning power, and household preferences.

Policy examples: Supports for working parents, like paid family leave, tax credits for low-income workers with children, and childcare subsidies, have been shown to increase their labor supply (Rossin-Slater et al. 2013; Schanzenbach and Strain 2021; Enchautegui 2016).

As even these high-level, ballpark results demonstrate, there is much room for policies targeting demographic gaps and participation differences to increase California’s overall labor supply.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities

The article discusses issues related to poverty, education, gender equality, decent work, and reduced inequalities, which are all connected to these SDGs.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
• Target 4.1: By 2030, ensure that all girls and boys complete free, equitable, and quality primary and secondary education leading to relevant and effective learning outcomes.
• Target 5.1: End all forms of discrimination against all women and girls everywhere.
• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• Target 10.2: By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status.

These targets address the specific issues discussed in the article, such as reducing poverty, improving education, promoting gender equality, ensuring decent work, and reducing inequalities.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.2.1: Proportion of population living below the national poverty line, by sex and age.
• Indicator 4.1.1: Proportion of children and young people (a) in grades 2/3; (b) at the end of primary; and (c) at the end of lower secondary achieving at least a minimum proficiency level in (i) reading and (ii) mathematics, by sex.
• Indicator 5.1.1: Whether or not legal frameworks are in place to promote, enforce and monitor equality and non-discrimination on the basis of sex.
• Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age group and persons with disabilities.
• Indicator 10.2.1: Proportion of people living below 50 percent of median income, by age, sex and persons with disabilities.

These indicators can be used to measure progress towards the identified targets, as they provide specific data points related to poverty, education, gender equality, decent work, and inequalities.

SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: ppic.org

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