Labor Force Participation Rates 2013

Last Friday’s jobs report revealed that the labor force participation rate – the proportion of the working age, civilian non-institutional population that either has a job or is actively looking for one – hit 63.8 percent, the lowest rate since February 1979. That means 496,000 people left the workforce from February 2013 to March 2013.  People leave the labor force for a number of reasons, including moving into retirement or onto the disability rolls, leaving the job market to go to school or because they are discouraged and are no longer actively seeking employment.

Labor force participation rates, however, vary significantly by state. West Virginia, with a labor force participation rate of 54.4 percent, had the lowest rate in the country in February 2013 followed by Alabama at 57.4 percent and Arkansas at 58.9 percent.  Nebraska had the highest rate in the nation at 72.9 percent, followed by North Dakota at 71.9 percent and Minnesota at 70.9 percent.

Labor Force Participation Rates by State, February 2013

Source: The Bureau of Labor Statistics, Seasonally Adjusted Rates

The change in labor force participation rates since the recession began also varies by state. From February 2007 to February 2013, Utah had the biggest drop in its participation rate of any state, falling by 5.8 percentage points. Michigan and Hawaii were close behind, each falling 5.6 percentage points. Nebraska and Pennsylvania saw the smallest decreases in their participation rates, each shrinking by 0.3 percentage points, followed by New Jersey, which dropped 0.6 percentage points. No state over this period experienced an increase in their labor force participation rates.

Percentage Point Decrease in Labor Force Participation Rates, February 2007-February 2013

Source: The Bureau of Labor Statistics, Seasonally Adjusted Rates