Has extended Baby Boomer employment negatively affected the labor force activity of the young during the Great Recession?
The notion that younger and older workers are engaged in a zero-sum game for a fixed number of jobs is called the “lump-of-labor” theory. This issue brief explores whether this theory has held true, and presents a series of key findings, including:
- The lump-of-labor theory did not hold true during the Great Recession: there is no evidence that employment by Baby Boomers negatively impacted the labor force activity of younger workers.
- Just as during the Great Recession, over the last several decades, an increase in older workers’ employment has been associated with an increase in younger workers’ employment rate and hours worked.
- This relationship between older and younger workers’ labor force behavior also holds true within states.
- This relationship does not vary by education level or by gender.
- Older workers’ employment has no negative impact on the hourly wages or annual incomes of youth.
Understanding these labor market dynamics is crucial for understanding a full picture of how to support upward economic mobility for youth and prevent downward economic mobility for older workers.