In today’s weak labor market, there are around 6.0 million “missing workers”—potential workers who, because of weak job opportunities in the aftermath of the Great Recession, are neither employed nor actively seeking work. Some have suggested that many of these missing workers may be at or near retirement age and, in the face of weak job opportunities, have simply decided to retire earlier than they otherwise would have. While this would clearly indicate a huge waste of human potential and a serious indictment of macroeconomic policymakers that allowed economic weakness to linger on so long, it would also indicate that these workers are very unlikely to rejoin the labor force in coming years no matter how dramatically economic conditions improve. This would in turn mean that their absence is not in fact an indicator of current slack in the labor market.

The figure below provides an age breakdown of the missing workforce. It shows that nearly three-quarters of missing workers are age 54 or younger, which means they are unlikely to be early retirees. Even if all of the missing workers age 55 and over will never reenter the labor force no matter how strong job opportunities get, that still leaves 4.4 million missing workers age 54 or younger who would be likely to re-enter the labor force when job opportunities strengthen. In other words, weak labor force participation rate remains a key component of total slack in the labor market.

It is also worth noting that early retirements will reduce the contribution of retirements to lowered labor force participation rate in later years. Consider someone who would have retired at age 65 in 2013, but instead got laid off at age 61 in 2009 and decided to retire early. The fact that they retired early means that we would have seen a smaller decline in labor force participation in 2013 than otherwise expected based on demographic trends. Essentially, the recession-induced early retirement in 2009 would have been scooped into the expected labor force decline due to demographic trends in 2013. Retirements based on long-run demographic trends are accounted for in (excluded from) my calculation of “missing workers,” so this person (i.e., the one who retired early in 2009) would no longer be counted as a missing worker.

Reminders that the age-structure of the labor force is changing quickly, with many Baby Boomers entering retirement age, are useful. We really do need to keep a close eye on population trends, which are evolving quickly. But we shouldn’t let this provide too much comfort in the face of extraordinarily depressed labor force participation; most of this labor force decline is indeed another symptom of a still-depressed economy.