Feds: Participation in Labor Force Will Fall

In its long-term budget outlook published in July, the Congressional Budget Office (CBO) projected that the labor force participation rate will decline from 63 percent in 2017 to 58 percent in 2046.

Variations in the participation rates affect the federal budget by changing output and income and by changing the interest rates the federal government pays on public debt.

The CBO noted that its projected 58-percent rate in 2046 could change in response to demographics, economic conditions, and social and technological developments, such as changes in the roles of men and women in the rearing of children or medical technology that improves the health of the population.

The CBO concluded that if the labor force participation rate is 61 percent in 2046, the resulting higher gross domestic product would lead to more revenues, higher interest rates, smaller budget deficits, and less federal debt.

If, however, the labor force participation rate drops to 58 percent in 2046, the slower economic growth would result in larger deficits and more debt.  Source: CNSNews