Posted by: Josh Lehner | December 20, 2016

Labor Force Participation, Full Employment Update

The supply side of the economy matters quite a bit, obviously. For employment that means the number of Oregonians willing and able to work. As such our office tracks the actual labor force participation rate (LFPR) — the share of Oregonians 16 years and older who have a job or are actively looking for work — compared with our estimate of the full employment participation rate. The difference between these numbers is what we call the participation gap and is a component in the Total Employment Gap work.

We just got new population estimates from Portland State and Kanhaiya, the state demographer in our office, has updated his forecast as well based on the new numbers and our revised economic outlook. In turn, I am in the process of updating some of our demographic-based projections, including the full employment LFPR. You can see the comparison below between the new version and the previous version.


The difference may not seem like much to the eyeball test, but in actuality it’s pretty massive. There are two impacts here. The first is an increase in the full employment LFPR itself, based on the updated population forecast and age structure — essentially a larger share of prime working-age Oregonians. This change is small today but compounds over the forecast horizon. It is equal to half a percentage point (0.5%) in 2025 — the difference between the blue lines above.

The second impact is an overall stronger population forecast relative to what had been in the outlook in recent years. Population growth continues to accelerate and has come in above forecast recently due to better-than-expected migration trends.

The combined impact is roughly 44,000 more Oregonians in the labor force in 2025 than previous outlooks implied. That is a big number. Given our office has a relatively slow job growth forecast that far out — due to demographics and a sustainable rate of growth — that difference is effectively equal to two years’ worth of job gains. If the population forecast comes to pass, this is great news for the Oregon economy. The supply side of the labor market is and will be stronger, everything else being equal.


  1. […] Source: Labor Force Participation, Full Employment Update | Oregon Office of Economic Analysis […]

  2. […] implications for workers, businesses and regional job growth. Rising wages and job openings are drawing more folks into the labor market, participation is rising. The combination of the higher wages and higher employment rates means that we are now seeing […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: