Pain and labor force drain
Pain and labor force drain
Italy and the U.S. have the lowest labor force participation rates of prime working-age men in the entire OECD. This presentation will consider reasons for the decline in labor force participation and obstacles to increasing labor force participation, particularly issues concerning health, pain, and addiction to pain medication.
alberto mentioned the low employment rate low labor force participation rate of youth is a national tragedy is a major concern it's a concern in the us but much less so and the reason why it's less of a concern in the u.s is that labor force participation fell for young people in the u.s because school and school enrollment increased and in fact if you look at young women aged 16 to 24 the fraction of that group that's either employed looking for a job or enrolled in school has actually increased and for men there's a somewhat concerning trend but much much less alarming than in europe the group that's received the greatest amount of attention and i think for good reasons are prime working age men this group is men aged 25 to 54. their labor force participation rate has been declining for quite some time in the u.s i'll show you some evidence on that now about 11 percent of men age 25 to 54 are neither working nor looking for work this group seems to be in particularly bad health a very high proportion reports a disability almost half take pain medication at a regular daily basis they report very low levels of life satisfaction and i think this group is a major social concern i'll show you some evidence that they may have expressed their anger in the last election so i think this is a major concern and a loss of human capital for the u.s economy but a bigger social problem for our nation but if you wanted to know why it is that the labor force participation rate stopped rising at the end of the 1990s the answer has to do with women labor force participation for men has been falling for over 70 years it had been rising for women we had an iconic character in the u.s rosie the riveter who went to work during world war ii and rosie's sisters and children and daughters kept joining the the workforce but that seems to have come to an end and the cohort of women born around 1960 basically my cohort and afterwards stopped joining the labor force at an increasing rate which suggests we're not going to see particularly big gains in labor force participation for women going forward interestingly if you look at their behavior and if you look at their reports about their lives they seem pretty content particularly the women who say that they're not working because they're taking care of the house they seem quite satisfied with their life they find meaning in their life unlike men who are not in the labor force they look miserable the women look relatively content which is another reason why i don't think we're going to see a sudden reversal there then lastly we're going to see these trends continue because the u.s population is going to continue to age 10 000 people a day are turning age 65 the traditional retirement age in the u.s so the u.s is going to continue to face a drag on labor force participation because of an aging population because of increased retirements for the next 15 years so this is going to be a concern for some period of time going forward so i showed you this picture before i spend a lot of time looking at this picture trying to understand why it is that it looks like an upside down you and if you look at different groups you get a better understanding of what's driving the aggregate labor force participation rate in the u.s the red line shows you labor force participation for men age 25 and over that has been declining since we started collecting the data the green line shows labor force participation for women that had been growing until the late 1990s then it peaked and it stayed at a relatively high level and since 2009 labor force participation for women has been declining at about the same rate that it's declining for men then if you look at younger workers in blue age 16 to 24 their labor force participation rates rose in the post-war period peaked in the 1970s stated about that same level to the 1980s and has been declining for periods of time or stable for periods of time since then so let me say a little bit about italy this shows you the labor force participation rate of prime age men age 25 to 54 in the original 22 oecd countries italy is in blue and it's easy to find because it has the lowest level at the end of the graph the us is the black solid line the us started like italy in the middle of the pack in the middle of the oecd now they have the two lowest labor force participation rates but also notice that this trend is global it has been affecting all advanced nations italy and the us to a greater extent but in basically all of the oecd member states labor force participation has been declining for men the next chart shows you women the us used to have a relatively high labor force participation rate for women within the oecd and now the us is the second lowest italy was always on the low end and now it is really an outlier uh italy's labor force participation rate for women is 20 percentage points below the rate for men in fact you could see this in this next chart where i gather uh some countries here for 2015 prime age 25 to 54 so retirements uh are not an issue for this group and the labor force participation rate for women in italy at 54.9 percent is well below other oecd countries more than 10 percentage points below the us labor force participation rate of women and more than 20 percentage points below the labor force participation rate of men so where italy really stands out is in the extraordinarily low labor force participation rate of women if you compare france and italy men are not too far apart in terms of their labor force participation rate but the rate for women in italy is 13 percentage points below that in france the next country with such a big gap between men and women is japan just as as a point of comparison so i'm going to next focus on the u.s and then i'll say a few words about italy towards the end of my talk i mentioned the role of aging before and economists have a pretty straightforward way of assessing the impact of an aging population there are lots of ways of doing this type of a calculation but what i do is i divide the workforce the population into 16 different age bisex groups and i know the number of people in each of those cells i know that we're moving more towards the older groups and i could recalculate the labor force participation rate using a fixed labor force participation rate meaning using the rates for each group in a particular year so to do this calculation i use 2016 labor force participation rates and i say what would the labor force participation rate have been in 1997 had the rates for each group been what they actually were in 2016. that's an example of how one can you do this type of a calculation so the only difference that you're seeing is changes in the population shares across different groups and that indicates that 80 percent of the decline in labor force participation that we've seen in the u.s is a result of an aging population changing the weight that we're putting on the different groups we're shifting towards groups with the lower labor force participation rates now there are a variety of ways of doing this type of a calculation you can use the average over the whole period and they all suggest that the aging of the population over the last 20 years has played a significant role the most important role in the decline in labor force participation in the us there had been a lot of hope that the decline in labor force was a cyclical result and that people will come back to the labor force once the unemployment rate drops once the economy improves now i was always skeptical of that view because historically movement from out of the labor force back into the labor force did not move very much over the business cycle and that's what this chart shows you the blue line shows the probability in any month that someone who is not in the labor force comes back to the labor force and you can see it's pretty flat and it doesn't move with recessions it's not lower during recessions than it is during boom times and in fact it's been declining over the last 10 years and the reason why it's been declining is because more people who are out of the labor force are retired and they're older so i don't expect to see much of a cyclical recovery and especially now that we are uh eight years past the end of the recession i'm not expecting to see a cyclical recovery in labor force participation so let's look at the different groups because i think what's really driving things are secular trends trends that have been taking place for a while for different groups young workers have seen a decline in labor force participation this shows you the lines on top or the non-participation rate so we've gone from uh 26 of young men not participating in the labor force and in 1985 to almost 45 percent today but if you look at the green line i count those who are in school as doing something productive as a university professor i'm fond of that interpretation they're investing in their human capital which will pay off later on and you could see the trend in the green line is much less alarming there has been an increase in the fraction of men who are not in the labor force and not going to school but it's relatively modest and for women the increase in school enrollment has more than offset the decline in their labor force participation which is the case for young people as a whole because the trend for women is stronger than the trend for men so that suggests to me that young people have been responding to the incentives in the economy in particular the increase in the benefit of higher education and more young people are going to school longer now that might be creating a set of other problems such as student debt but as far as the skills of the workforce uh is concerned this this is likely to be a positive development let me next turn to prime working age men uh this shows you men aged 25 to 54. their labor force participation rate has been declining since uh the early 1950s there's been a slight recovery over the last year and a half but the general trend is down and about 11 percent today of prime working age men are not working and not looking for a job this trend is particularly strong for those with a high school degree or less and this chart shows you white men all white men in blue and white men with a secondary degree or less in terms of their education and you can see two things first of all the labor force participation rate is lower for those who are less educated and secondly the downward trend is stronger for those who are less educated now there's still a downward trend if we look at college graduates among men white men but it's a stronger trend for those who have less than a high school degree or high school degree or less and what i think is important uh an important explanation here is that the labor market has turned much weaker for less educated workers in the u.s particularly less educated men we've seen their earnings drop while we've seen their employment drop this is one of the major causes of the tremendous rise in inequality that we've seen in the u.s i think this is related to automation and technological change of reducing demand for less skilled men but i think it's related to a number of other factors as well globalization has probably played a role and i think some changes in government policy have made the labor market more challenging for less educated men and the decline in labor unions has probably also played a role i added a set of questions to a survey in the u.s that the bureau of labor statistics conducts called the american time youth survey and uh it was interesting because i worked together with my colleague danny kahneman to add a set of questions and then i went off to the government and i came back and i realized nobody had actually analyzed the data so here's an opportunity for me to share with you what what i found we added questions about people's health about how they how they feel while they spend their time about pain in their lives and pain medication and what's striking if you compare prime age workers based on their labor force status uh men who are employed unemployed or not in the labor force what we see is the men or out of the labor force report themselves in fair or poor health 43 of men aged 25 to 54 who are out of the labor force say that they are in fair or poor health compared to only 12 percent of employed men and only 16 percent of unemployed men so the men who are out of the labor force look distinctly different if you look at women the picture is not quite as bleak 31 of the women who are out of the labor force say they are in fair or poor health and 11 only 11 of the employed women that looks a lot like like the men the women who are out of the labor force really are two groups a group were very much like men who are suffering and in ill health and then a group who are taking care of their household seem quite satisfied with their lives and are not reporting themselves in ill health i'll come back to that later on but let me look at the men first this next table reports on how on whether men said that they had a disability and the question about disability was quite specific do you have difficulty dressing or bathing are you deaf or have severe difficulty hearing are you blind or have severe difficulty seeing and a little over one third of the prime age men who are not in the labor force said that that said that they had one of these six functional disabilities 20 percent said they have difficulty walking or climbing stairs sixteen percent said that they have difficulty concentrating remembering or making decisions so it's not only physical health it's also mental health that is a challenge for many of these men and i think this is an underestimate because it only focuses on six different conditions in a survey that i did that i'll talk about shortly i found a much higher fraction of men are out of the labor force listed another condition some said they were recovering from cancer some said that they had a bad back they didn't think of these conditions even though they had a severe disability and almost 20 percent have multiple disabilities in the survey that we conducted i asked about do you feel pain during various activities during the day rate the pain on a scale from zero to six if you look at prime age men who are out of the labor force over half the time they reported having pain in their activities now pain was actually surprisingly high for those who were employed as well 26 percent of prime age men who were employed or 29.6 percent said that they had nonzero pain so you might think that americans are a bunch of complainers but what's striking is uh we also take a great deal of pain medication 44 of the prime age men who are not in the labor force said that they took pain medication in the previous day if you look at white men with less than a college degree 50 percent of them said they took pain medication on the previous day and they reported even higher levels of pain than uh the group that's out of the labor force as a whole now one could say well if they took an aspirin maybe that's no not so bad in fact if you went to the session this morning on health taking an aspirin or drinking a glass of red wine might do the same amount of good for you so what type of pain medication are they taking i couldn't tell from this survey so i conducted a survey of 570 prime age men who were not in the labor force i did this in the fall of 2016. so these results are very recent 47 percent of these non-working not unemployed men out of the labor force men said they took pain medication on the previous day very similar to what we found in the american time youth 65 percent of those who took pain medication said it was prescription pain medication now i didn't ask but specifically if it was an opioid but that's the most likely pain medication that would be prescribed in the u.s today i ask them directly does pain prevent you from working on a full-time job for which you are qualified 40 percent of this group said yes and as i mentioned before two-thirds of them reported having a disability 35 percent of this group were on disability insurance disability insurance is a program we have in the u.s for people who have a severe disability and are unable to work on the job that's available for them it makes you wonder how the other 65 percent are getting by because this group receives very little public support other than disability insurance one might think well perhaps their wife is taking care of them but a very small percentage of this group is actually married they're not the most desirable marriage partners so that's that's a uh i think fascinating question which i've never gotten to the bottom of how they're able to afford the lifestyles that they have let me say a little bit about their well-being we added questions in this survey about experienced well-being how people feel from moment to moment how much happiness they have how much sadness they have whether what they're doing is meaningful as well as whether they felt pain during those activities that's a measure of momentary well-being we also have a question of overall life evaluation it's called the cantrell ladder please imagine a ladder with steps numbered from zero at the bottom to ten at the top the top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you if the top step is 10 and the bottom step is zero on which step of the ladder do you feel you personally stand at the present time there are a lot of numbers here but i can just summarize for you prime age men who are not in the labor force feel pretty miserable their emotional well-being is very poor they're not happy they're tired even though they sleep a lot uh they report that they're stressed high level of sadness i already mentioned pain and they don't consider what they're doing very meaningful unemployed are also dissatisfied with their lives on a moment-to-moment basis those who are not in the labor force report lower emotional well-being than the unemployed in terms of this overall life evaluation the unemployed are on a lower step of this ladder of life than are those who are not in the labor force um one other point i wanted to mention if you look at this group of men who are out of the labor force they spend an enormous amount of time alone 30 percent of their awake time is spent alone that's about double what you find for employed men uh or employed women and researchers found that when people spend more time alone they tend uh they tend to suffer more anxiety so i think this paints a picture of a group that is isolated and fairly disgruntled let me turn next to women i mentioned earlier that if we look at cohorts of women we see some very interesting patterns this chart shows you for women born in different birth years their labor force participation rate over the life cycle over the course of their lifetime from age 21 up to age 75. now for women who were born recently we can't follow them up to age 75 so we follow them for as long as we can and if you look at the cohort of women who were born in 1941 or the way i do this plus or minus three years so around 1941 you see that labor force participation was relatively low in their 20s and 30s and then rose peaked in their 40s and then started to decline in their 50s this hump-shaped pattern if you look at the cohort of women who were born in the early 1950s labor force participation was considerably higher for them in their 20s and their 30s during the prime child rearing ages and that's where we've seen the biggest change in the u.s it's become much more acceptable much more common for women with children to join the labor force to be working or looking for work that trend continued for the group of women born in the early 1960s and then it basically came to an end if you look at women born around 1981 1971 we don't see much difference compared to women born in 1961 and if you follow out the profile for the group born in 1961 they're pretty much mirroring those who were born in the early 1950s as they reach age 40 age 50 they seem to be following the same path in terms of labor force participation so what does this mean well historically the u.s saw a rising labor force because an increasing number of women joined the labor force they stayed in the labor force as older women with a lower labor force participation rate retired they were replaced by cohorts with a higher labor force participation rate but that process has come to an end and i think it's unlikely to reverse the reason why i say i think it's unlikely to reverse is the group of women who are out of the labor force don't seem particularly discontent with their lives compared to men that's what this next table shows you if you look at prime working age women who are not in the labor force their average on the cantral ladder was seven versus 7.2 for employed women they're basically reporting themselves on the same step of the ladder whereas unemployed women are a full step below if you look at how happy they are they're actually reporting higher level of happiness with their daily activities than our employed women they're reporting a lot of meaning in their life now i mentioned before they're a mixed group and you can see that here if you split out the women whose main activity is keeping house which is about half of the women who are out of the labor force and compare them to the rest of the women who are out of the labor force the women who are keeping house are quite satisfied with their life they report themselves on a higher step of this latter ladder of life than do employed women moment to moment they're quite happy they see a lot of meaning in their life and the women who are not keeping house who are out of the labor force look a lot like men they look a lot like prime age men in terms of their emotional well-being in terms of their low level of life satisfaction and they also look like men in terms of taking pain medication half of the women who are not in the labor force and not taking care of their house as their primary activity say they took pain medication on the previous day and they're reporting high incidence of pain in their daily routines now i think what we're seeing in these data is symptomatic of a broader trend in the u.s and my colleagues ann case and angus deaton have used the term deaths of despair to describe the rising uh fatalities that we're seeing due particularly to abuse of opioid medication pain medications this is particularly an issue for the white working class particularly for middle age individuals and that's the same type of pattern that we see in the labor force data so now i want to move to some more speculative results and then end on a high note for italy so i mentioned the opioid crisis in the u.s this chart which is now a little bit out of date shows you in red the number of americans who are dying from overdose of opioid pain medication every year and it's out of date because even though it has risen from five thousand to fifteen thousand from 1999 to 2013 the latest numbers that i read yesterday for 2015 that 25 000 americans in 2015 died from opioid uh over overdose to put that number in context that's more people than are killed in homicides in the u.s more people than are murdered and we have an extraordinarily unacceptably high murder rate it's almost as many americans are who are as as are being killed in car accidents uh in any given year and you can also see there's been some rise in uh overdose of heroin but overshadowed by the rise in overdose from opioid medication and some of the numbers are extraordinary i wanted to mention a few other statistics enough opioid pain medication is prescribed in the u.s every year to keep every american man woman and child medicated around the clock for an entire month in some states the rate is higher than that significantly higher in ohio it's more than twice that the state of ohio has just initiated a lawsuit against the pharmaceutical companies that produce opioid paid medication arguing that they intentionally tried to get the population addicted to overuse this medication the addiction rates are extraordinary 26 percent of those who use opioid pain medication become dependent on it now i should say that's of non-cancer patients but 26 percent of the non i don't know the number for cancer patients it was only reported for non-cancer patients 26 became addicted one in 550 people who start on opioid pain medication die from a related overdose the median period of time from the beginning to death was two and a half years in this study another important observation is that half of those who are on disability insurance and of working age have opioid paid medication prescribed to them over the course of a year so this is a severe epidemic in the u.s and i'm certainly not the first to draw attention to this there were some very interesting observations over the course of the election and i'll just conclude by sharing this with you and commenting on the uh fortunate situation in italy for avoiding this problem jeff guo who's a journalist he's now with with vox he used to write for the washington post did some pretty interesting analysis where he looked at the relationship between the annual death rate for non-hispanic whites aged 40 to 64 and donald trump's performance in the primary super tuesday where he did uh to to many remarkably well and you could see in states like virginia or tennessee in the counties where there is a high death rate his performance was particularly strong also in georgia and arkansas alabama this next chart is from a paper by shannon monat who might even be here she's speaking at seventh oh perfect i thought i would advertise for you she's speaking at 7 30 here in trento this looks at um states in the midwest and relates how donald trump did relative to mitt romney so these are basically voters who switched from voting for barack obama to voting for uh donald trump and relates that to the age-adjusted mortality rate specifically looking at mortality from drug alcohol and suicide if i had more time i would have looked more at labor force participation in these states and and and this uh same variable but there's a lot pointing to despair in areas of the country and low labor force participation and support for what i would call a non-mainstream candidate so let me conclude by noting that italy has avoided this problem this looks at people age 50 to 54 but if you look at other ages you see the same pattern and specifically it's looking at deaths per 100 000 people due to drugs alcohol or suicide or suicides and you could see the u.s used to have a very low rate in the late 80s early 90s and now we have a rate which is more than double uh what it had been triple what it had been you look at italy the rate has declined in italy italy is shown here in green and is the lowest compared to u.s france germany sweden and the uk and the us is somewhat unique there's been something of a rise in the uk but nothing like what the us has experienced so let me just conclude by saying i think the physical mental and emotional health conditions of the uh group that's not in the labor force are a severe barrier to work i think this is particularly an issue for prime age men but also for an important subset of prime age women we don't know the direction of causality meaning i don't know if pain and disabilities cause people to drop out of the labor force or if they dropped out of the labor force found access to pain medication and that's what's causing this correlation that we observe that's a topic that i'm currently working on but regardless of the direction of causality i think it's an important barrier when it become when it comes to employment i think stronger macroeconomic conditions are unlikely to turn our labor force participation challenge around i think stronger macroeconomic conditions would certainly help i think there are many benefits of a high pressure labor market but i don't think a rebound in labor force participation is is one of those benefits i think we need to focus on the particular problems that are afflicting those who are out of the labor force opioid addiction is a major social and economic problem i think this suggests we need to focus on other types of interventions for people who have pain such as physical therapy also mental health services also i think it's important to avoid the problem in the first place that's one of the reasons why having universal health care in the us now after the affordable care act i think offers us potential to have more preventative care um so uh why don't i when am i in on that note and i'm happy to take questions thank you gracias well we have seen the similarities between the countries in this large share of people who do not participate in the labor force and we see that there is some hope for italy we have that green line which perhaps is the mirror of our way of life which is perhaps a medicine in itself now before opening the presentation to the audience i would like to make a question i'm wondering in the u.s if this intention expressed by trump to go back on the obamacare may have an impact on the subject so what are the mid to long-term consequences of the expected reform of the obamacare by trump i think that's definitely a concern in the u.s i think we've benefited so far by the fact that the administration is incompetent and has been unable to figure out a path to repeal obamacare i think one of the few issues during the campaign where donald trump was actually correct was in highlighting the opioid crisis and he has made that one of his many priorities he hasn't i think laid out an agenda to address that but it's possible that as he continues to struggle with the congress to have health care reform that he'll actually turn to try to address the problems as opposed to just repeal what president obama achieved and i think he'll discover that the affordable care act can be a very useful tool in terms of addressing the opioid crisis just today i read that senator richard burr whose name is in the press quite a bit because he is leading the intelligence committee in the senate announced that he didn't think that the senate would be able to achieve health care reform this year now i worry that the administration's hostility to expanding health insurance providing health insurance and preventative health care services might cause it to do a a incompetent job in terms of administering the law but even there i think the amount of damage that they could cause is somewhat limited because over half of the expansion of of health insurance coverage in the u.s occurred because of medicaid which the states administer and they can make some changes but they i don't think can blow up the system for the health insurance exchanges i think that actually requires some skill and a commitment to the program to attract health insurance companies to want to offer plans in the health exchanges and so far they seem to be doing everything they can to make the health insurance exchanges fail they wanted to stop providing subsidies to health insurance companies for participating in the exchanges they reduced the period for advertising when people could sign up they wanted to cut spending on advertising and they wanted to cut the enrollment period so they seem to be trying to reduce the number of americans who are taking advantage of the health insurance that became available from the affordable care act but as long as the program is there there i think what we've seen in the u.s we've seen remarkable decline in the number of people who lack health insurance 22 million additional people came under health insurance coverage because of the affordable care act so as long as the program i think is still there after the administration is no longer there uh i think it provides an opportunity for more preventative care grazie um hi alan hi um if wages hadn't had not have fallen so much in the united states um would the participation rate be the same or another way if wages rose by let's say 10 how much would labor force participation increase that's a very good question i think it's more relevant for men than for women because wages for women have not fallen wages for men have fallen particularly for less educated men and i think that's probably a big part of the story but not the whole story and the reason why i say that is we saw labor force participation falling for men in the 1960s and in the 1970s before we saw wages stagnate and the real wages stagnate and decline for men i also think there's an asymmetry and i say this with a little bit of trepidation with olivier blanchard in the audience but i think there is some hysteresis in that once people leave the labor force they seem to adapt their lives so they're less responsive to to to wages for coming back particularly if they go on disability insurance very few people leave disability insurance back for for work um but i think that's also the case for others who retire early uh who decide they're gonna take care of home responsibilities so the problem that we face i think is easier to avoid than it is to rectify and how do you avoid it well one could have more active labor market policies particularly during a recession one of the benefits of extended unemployment benefits is that people remain in the labor force i would like to see us be more active in terms of helping those who are out of the labor force be more engaged volunteer i think we could arrange for the unemployed to volunteer which i think will help them to find jobs help them keep their skills feel better about themselves and you know obviously macroeconomic policy macroeconomic management uh counter-cyclical policy has an added benefit if you have this type of an asymmetry when when it comes to labor force participation thank you good evening thank you so much for your presentation i uh well if we don't win with the gdp we win with the gross happiness index well i'd like to understand if you also compared the american system and the european system and the italian system in terms of social benefits and welfare benefits that is benefits which are given to unemployed people both as wage benefits or active policies in order to help these people find a new job thank you you know i think there are two parts to your question one has to do with thinking about gross national happiness as opposed to gross national product or thinking about the quality of life which i fully agree with gdp is one indicator of many that we should think about thinking about the way we want our societies to work and i think despite the economic problems that italy faces and to some extent the euro zone compared to the us the quality of life is still remarkably high and i was engaged for a long period of time with the sarkozy commission and probably half a dozen other ones to try to develop better measures of of well-being as far as the unemployed go there's a trade-off between providing benefits and reducing work incentives which has been pretty well documented i think that trade-off varies over the course of the business cycle which is an argument in favor of extending benefits in the middle of a recession having them last for a longer period of time in some countries i think training for the long-term unemployed is a very helpful strategy for bringing them back to work one thing i have been advocating in the us for some time particularly for older workers is wage insurance where if a worker lost a job that paid say twenty dollars an hour and the new job only pays ten dollars an hour the government would make up half the difference from unemployment benefits as an incentive to bring people back to work i think that particularly makes sense for older workers who are less likely to get additional training we have wage loss insurance as part of trade adjustment assistance the evaluation suggests it's worked rather well there i think it's on much too small of a scale in the u.s your data seems to white americans is there anything a different picture for those who are not white no i'm sorry can you speak louder yeah i still can't hear it though your data seems to be about white americans is the picture any different for other groups oh yes so um it is different um it's not better for other groups if you look at african americans or hispanics labor force participation rate is lower and the trends are are similar one of the reasons why i showed separate results for whites with less than a high school degree is that's a particularly large group and that's a group where there was a big swing in terms of the last election and it's also a group that's been particularly affected by the opioid crisis but i certainly do not want to minimize the employment problems facing african americans in the u.s particularly african-american youth and i should have highlighted this before another concern in the us is that the high crime rate that we've had in the high incarceration rate in particularly means that we now have a high share of particularly men who have a criminal record which makes it much more difficult to find employment that is a a a problem especially in the african-american community it's not a new problem i don't think it's what's causing the overall trends that we're seeing but i think that that is a major social concern in the u.s you showed a diagram you showed a diagram showing the women labor force participation rate referred to five cohorts of women and the diagram shows that at a certain point in time in their lives this participation rate falls and the five lines do not move at the same time do not move at the same time because if i understand it correctly we have age on the horizontal axis but nevertheless we see the reversal of the trend or the reversal of the curve so that takes place more or less at the same age so i don't know whether you explained it why maybe i missed it i would like you to elaborate a little bit on this this is the chart that you referred to and uh to me what it shows is sort of two important patterns one if you look at the 1941 birth cohort 1951 birth cohort 1961 birth cohort basically at all ages you have a higher participation rate for the more recent birth cohorts and that's especially true at the child rearing ages that's pattern number one pattern number two is after 1961 it doesn't look like much has changed it looks like we're seeing the same pattern for the 61 cohort 71 and 81 and in fact if you look at it long enough the 81 birth cohorts a little bit below the 1971 birth cohort so it's easy to explain the increase in labor force participation of of women it had to do with a decline in discrimination in american society professional schools became open to women i once actually prepared a table for hillary clinton in 1995 where she asked me what fraction of law students were women when she went to law school and today when she went to law school it was maybe 10 percent of students and today it's over half if you look at a lot of other fields it looks similar um and it also has to do with economic changes in terms of wages that that women earn societal changes in terms of marriage rates single parent rearing and so on um it's a puzzle why this has come to an end i think that there was a little bit of overshooting in the sense that for a group of women even if their first choice was not necessarily to throw their lives into their career they get they got a lot of satisfaction from being the very first woman to achieve something first woman to be a university president or first woman in their family to be a manager for the next generation i think maybe they focus a little bit more on quality of life and maybe that's why we saw a little bit of of backtracking the hump shape pattern which you asked about if you looked at men you would find something similar and if you look at earnings that look somewhat similar so one interpretation is that this is a life cycle pattern that's mirroring earnings and the fact that people invest in human capital they get a return to that they invest they get more of a return and then that peaks and then it starts to come down and i think that's probably a factor i i mentioned olivier blanchard who is president of the american economic association another president of the american economic association whirly ashenfelter has done work on life cycle labor supply so again i'm nervous about discussing uh this in in in front of him but there are other you know kind of obvious explanations for why labor force participation would start to decline at older ages people experience worse health they may also reach a point of their lives where they are financially capable of retiring if you look at the pattern for men it looks similar although it rises for a bit longer but there's nothing interesting going on in the cohort pattern for men for women there's something really remarkable going on in the cohort pattern which is why i showed it for for for men for women and not men i have a question with respect to the relationship between labor force non-labor force and immigration would your data allow to deduct that if the low-skilled immigration uh diminished dramatically a lot of the people in the non-labor force would be sucked into the labor force that's a great question um i think the answer that is probably no and i think it's almost certainly no if you think about labor force as a whole immigrants have a higher labor force participation rate to non-immigrants the less skilled immigrants are doing jobs that natives most likely would not be willing to take so i think when it comes to labor force participation it's pretty unambiguous that we will have a higher labor force participation rate and certainly more labor force participants if we had a more open immigration policy the um one of the real regrets i had when i worked for president obama was that the congress did not pass immigration reform the senate passed an immigration bill but the house never took it up and i'll tell a somewhat long-winded story about it because it tells you i think where we are in american politics today it was a very high priority for the president it was actually a high priority for john boehner who was the speaker of the house of representatives he wanted the house to pass a bill the very difficult issue has to do with a path to citizenship and what do you do with the undocumented immigrants who are already present most americans think it's a good idea to bring the immigrants in the u.s out of the shadows they see them in their neighborhoods they think it would make sense if they could work above ground as opposed to below ground and pay taxes those arguments actually were i was trained and how to talk to the media and what i was told is those arguments work and i think they're pretty good arguments for the republicans they couldn't bring themselves to have a path to citizenship even though it would take 11 years for someone who was undocumented to be able to obtain citizenship in the best of circumstances under the senate bill um there were aspects of the senate bill that i think made very little sense like it greatly increased the number of border security guards who don't achieve very much and uh president obama was willing to go along with that in exchange for a more sane immigration policy the senate bill that passed was led by marco rubio and chuck schumer uh i think it was a real disadvantage for rubio for having been engaged in that effort and having led that effort when he ran for president in the republican primary and i think the problems that the republicans are having now passing legislation are very similar to what prevented them from passing the immigration bill and they were unwilling to bring it to a vote because they knew it would pass with democratic support so unfortunately we're tied up in knots this is not a problem that italy is unfamiliar with but we're tied up in knots because the political system is not working very well but very briefly on the economics of the bill the congressional budget office which is responsible for analyzing legislation wrote a report which was remarkably favorable i wrote a report as well and i tried to be faithful to the research but i also tried to be supportive the congressional budget office was way beyond me they they concluded it would raise productivity growth if the senate immigration bill was enacted it would eventually raise wages it would raise labor force participation considerably so i i think we're going in the opposite direction by with the trump administration favoring a policy of building a wall we're already seeing declines in the number of foreign students who are applying to school in the u.s so i think that's going to be a further challenge for our our labor force participation going forward so we have time for a one last question so we have time for one last question seeing these big increases in opiate opioid addiction etc in the us and not in europe that's a very good question and i was speculating before about the political ramifications of these trends i'm really going to speculate here i suspect it had very much to do with the difference in our healthcare systems and i'll tell you a story i went to see my doctor and he said how are you doing as soon as i walked into his office and i said i've got a little bit of tennis elbow my my arm isn't hurting and he wrote me a prescription right away and then he asked me what are you working on and i told him about this study in the opioid use and he said i'm always very careful before i prescribe medication so i think that there's a tendency in the u.s and the medical profession to try to prescribe something to make patients go away make problems go away i don't think there was enough appreciation of how addictive oxycotin and other opioid medication were um on on medicare prescriptions are free so from the patient's perspective it's free um so i think the medical profession is now recognizing that this is a serious problem it's easier in europe to um ration medication than it is in the u.s now we're starting to do that with opioid pain medication in the u.s about a half dozen states including massachusetts limit patients to getting only seven pills at a time so that they they will have to go see another medical profession to have it refilled um there are now reviews for the doctors who are over prescribing it but that's easier to do in a centralized health care system than it is in a decentralized one like the u.s that's my guess is the main reason i think when when i first looked at the results that i'm finding my reaction was this is so hard to believe work has gotten to be much easier the work injury rate has gone way down in the u.s and elsewhere the number of work fatalities has gone way down why are such a high fraction of workers reporting that they have pain when work looks like it's physically less demanding so i suspect that work is physically less demanding and we probably do have fewer backaches than we had before or at least not more but the medical profession is prescribing more medication which is creating more problems than in the past all right then our time is over thank you very much professor krueger because your presentation was definitely exhaustive full of data rich in data i must say very very interesting and again i would like to highlight the importance of the let's say snapshots that we were provided with on the italian and the us system that to highlight the major problems that are still open issues and unfortunately on some national agendas that these issues are not even a priority and this should be a source of concern for us but i wouldn't like to end on this i said no to we have so many bad news every single day in italy despite the good the data that were disclosed the other day on our gdp i again i would like to candidate once again for a future conference on the rock economics and at that point the atmosphere will be completely different thank you very much you