Employment Growth and Labor Force Participation: How Many Jobs are Enough?

FRB of Atlanta Working Paper No. 2004-25

24 Pages Posted: 4 Jan 2005

See all articles by Julie L. Hotchkiss

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta; Georgia State University - Department of Economics

Date Written: October 2004

Abstract

This paper demonstrates that, because of declining labor force participation rates, the usual estimates of job creation needed to keep unemployment in check are too high. It is estimated that only 98,000 jobs (rather than the usual goal of 150,000 jobs) need to be created per month to absorb the growing labor force. As the population ages, the labor force will grow even more slowly, and the number of jobs that need to be created will decline. This paper explores the potential implication of this decline in labor force growth on total output along with potential sources of replacement labor to fuel desired growth in the gross domestic product (GDP).

Keywords: job growth, labor force participation, unemployment

JEL Classification: J21, E24

Suggested Citation

Hotchkiss, Julie L., Employment Growth and Labor Force Participation: How Many Jobs are Enough? (October 2004). FRB of Atlanta Working Paper No. 2004-25. Available at SSRN: https://ssrn.com/abstract=639662 or http://dx.doi.org/10.2139/ssrn.639662

Julie L. Hotchkiss (Contact Author)

Federal Reserve Bank of Atlanta ( email )

Research Department
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Georgia State University - Department of Economics ( email )

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