Wednesday , April 9 2025
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A teaser about wages and labor force participation

Summary:
I was going to put up a short piece about wages this morning, but it has turned into a longer, more comprehensive piece, so in the meantime, here are some teasers to ponder. 1. There is a direct relationship between the economy generally, and child care costs specifically, and couples’ decisions about whether or not to have more children: The below graph comes from Vox.com. It is the top eight reasons that couples give for not having (more) children: Note that 6 of the 8 reasons have to do with the economy, and 4 of those specifically have to do with the costs of child care. 2. While correlation is not causation, nonetheless in the modern era, there has been a clear correlation whereby prime age labor force participation leads nominal wage

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I was going to put up a short piece about wages this morning, but it has turned into a longer, more comprehensive piece, so in the meantime, here are some teasers to ponder.

1. There is a direct relationship between the economy generally, and child care costs specifically, and couples’ decisions about whether or not to have more children:

The below graph comes from Vox.com. It is the top eight reasons that couples give for not having (more) children:

A teaser about wages and labor force participation

Note that 6 of the 8 reasons have to do with the economy, and 4 of those specifically have to do with the costs of child care.

2. While correlation is not causation, nonetheless in the modern era, there has been a clear correlation whereby prime age labor force participation leads nominal wage growth:

A teaser about wages and labor force participation

3. Despite #2 above, in the shorter term there appears to be an inverse correlation between the rate of prime age employment growth and relative wage growth:

A teaser about wages and labor force participation

I’ll flesh this out in the more comprehensive post.

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