Thoughts on the Black Labor Force Participation Rate
Recently, my Economic Snapshot on the resilience of black labor force participation has gotten some attention in a few well-known media outlets. The main finding of the snapshot was that part of the reason the black-white unemployment rate gap has grown during the post-Great Recession period is because labor force participation has fallen by less for blacks than for whites. In a blog post for the Washington Post, Philip Bump examined the robustness of that observation by comparing historic data on labor force participation rates and unemployment rates for blacks and whites dating back to 1973. He concludes that “the problem is that Wilson’s explanation doesn’t appear to hold up over time.”
But this is only a problem if one assumes I was making a statement about the entire run of post-World War II U.S. economic history. I wasn’t. I was instead looking only at why the black-white unemployment gap grew in the past seven years. Importantly, focusing on these particular seven years is not an arbitrary or random selection—that’s the period of time since the previous business cycle peak, a span of time often looked at by researchers to assess labor market trends. That being said, I think Philip’s exercise is an interesting one and worth repeating, by comparing changes over similar periods of time in previous business cycles.
Of course, even in comparing similar periods during previous business cycles, one would be hard pressed to find another contemporary post-recession period like the current one. The Great Recession is unique not only for the magnitude of jobs that were lost, but also because of the overall downward trend in labor force participation and the historic rates of long-term unemployment that have persisted this far into the economic recovery. All of these factors are likely to influence the behavior of jobseekers in ways that may be different from other business cycles.
Perhaps the most important conclusion to be drawn from any of this is that there’s lots left to be explained about the historic persistence of the black-white unemployment gap. But, I still think that it is pretty interesting that since the Great Recession this unemployment gap has been propped up by a fact that surprises many: the resilience of black labor force attachment.