Welcome back to The Workweek, the Indeed Hiring Lab’s round-up of the latest research, news, and perspectives that made us think deeply or differently about the labor market this week. It’s your guide to the most important new insights about work.
Here are our picks for this week:
Shrinking Grandma’s Pension to Keep Her Working
January 2017 had the highest rate of labor force participation for Americans aged 65 and older since 1961 (although rates are still well below those of the 1940s and 50s). One potential reason for this upsurge in the silver-haired workforce is that retirement benefits have ebbed somewhat over the past few decades and the “65-plussers” are responding to financial incentives. Less generous retirement benefits may boost the overall economy as millions of Baby Boomers now reaching retirement age find that they have to stay in the workforce. As for those dreaming of a leisurely retirement — they may now have to rely more on their savings (Bloomberg).
A Broken Circle of Dynamism?
The standard narrative from economists is that finding ways to make workers more productive is the key to growing the economy. Productivity gains can come with disruption to the structure of the labor market: new technologies help a company produce more with fewer workers. Historically those remaining workers have seen pay gains and new jobs have emerged for the displaced workers as the economy expands. But now something appears broken: today’s economy looks to have too much disruption with too little new job creation (and frankly too little productivity growth). This leads some politicians and pundits to search for ways to limit the disruption —but that may be worse for the economy in the long run. (New York Times)
Exports come from Everywhere
According to new research from the Brookings Institution’s Metropolitan Policy Program, almost six million U.S. jobs are directly tied to exports and another six million are indirectly dependent on trade. Furthermore, these jobs are distributed throughout the U.S. with every metro area having some exposure to trade. Better trade deals may spread benefits throughout the country, or the pain of trade wars could be shared across the U.S. (Washington Post)
Don’t Forget the Other Half
With so much attention focused on retiring Baby Boomers and the decline in labor force participation of prime age males in the U.S., it seems that we may be missing a big story which is hiding in plain sight. In this week’s FT Sarah O’Connor shines the spotlight on what’s happening to women in the workforce. On that front the U.S. stands out as unusual — over the last fifteen years prime-age female labor force participation has declined, whereas in other countries it has risen. During the same time frame the U.S. has also diverged in terms of the generosity of family leave. This pattern doesn’t prove causation, but it does provide food for thought. (Financial Times)
It’s not just a stereotype: Germany has a smaller share of early-stage entrepreneurial activity than many of its peers. That may change with the new inflow of immigrants, according to a recent article in The Economist. Some immigrants arrive with plans to start their own business whereas others find it easier to be self-employed than to gain access to the existing labor market in a new country. One concern, however, is that Germany isn’t the easiest place to start a business. Improving that could help the new immigrants assimilate and grow the German economy as well (The Economist)