Josh Bivens at the Economic Policy Institute (EPI) reports it is often under-recognized how much population aging is currently reducing the growth rate of the U.S. Labor Force - and will continue to pull it down in coming decades. The share of the population that is over the age of 65 (when Labor Force participation tends to take a steep fall on average) is rising rapidly. This share was 12.4% in 2007, 17.9% in 2024, and will hit 21.2% by 2035 (CBO 2025b). A recent EPI report (Gould et al. 2025) assessed trends in U.S. Labor Force participation and reviewed the research literature about their drivers and the potential effects of policy changes on these trends. One upshot of this research literature is that even the most ambitious policies to boost the Labor Force participation rate of the current U.S. Workforce would not materially change these trends. Any decline in Labor Force growth necessarily leads to a decline in the rate of growth of gross domestic product (GDP). GDP is the product of the number of hours worked in an economy multiplied by productivity (the average amount of output generated in an hour of work). If the number of work hours falls because the Labor Force shrinks, this essentially translates one-for-one into slower aggregate growth. Policymakers who do not want to see the pace of GDP growth shrink relative to the past history of U.S. growth really only have one option: Allowing larger flows of immigration. Absent this, other policies to boost the U.S. Labor Force - while they might be wise along many margins - will not restore overall GDP growth to anywhere near its historic pace. In the rest of this policy brief, the EPI lays out some of the larger trends in U.S. Labor Force growth and the implications of population aging for the future path of the labor Force and economic growth.

To Continue Reading This Labor News Report, Go To: The U.S.-Born labor force will shrink over the next decade: Achieving historically ‘normal’ GDP growth rates will be impossible, unless immigration flows are sustained | Economic Policy Institute