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Labor and Labor Markets, Factors Affecting Labor Markets

early decades, birth rate, baby boom, baby boomers, public policy issues

Changes in society and in the makeup of the population also affect labor markets. For example, starting in the 1960s it became more common for married women to work outside the home. Unprecedented numbers of women—many with little previous job experience and training—entered the labor markets for the first time during the 1970s. As a result, wages for entry-level jobs were pushed down and did not rise as rapidly as they had in the past. This decline in entry-level wages was further fueled by huge numbers of teens who were also entering the labor market for the first time. These young people were the children of the baby boom of 1946 to 1964, a period in which the birth rate increased dramatically in the United States. So, two changes—one affecting women’s roles in the labor market, the other in the makeup of the age of the workforce—combined to affect the labor market.

The baby boomers’ effects have continued to reverberate through the U.S. economy. For example, starting salaries for people with college degrees became depressed when large numbers of baby boomers started graduating from college. And as workers born during the boom have aged, the work force in the United States has grown progressively older, with the percentage of workers under the age of 25 falling from 20.3 percent in 1980 to 14.3 percent in 1997.

By the 1990s, the women and baby boomers who first entered the job market in the 1970s had acquired more experience and training. Therefore, the aging of the labor force was not affecting entry-level jobs as it once did, and starting salaries for college graduates were rising rapidly again. There will be, however, other kinds of labor market and public policy issues to face when the baby boomers begin to retire in the early decades of the 21st century.

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