With Nicolas Petrosky-Nadaeu, he writes (scroll down at the link for the paper),
In the bottom 10 percent of households by household income, 33 percent of individuals participated in the labor market in 1998-1999. By 2011-2013 this proportion was 44 percent. At the other end of the household income distribution, the rate of labor market participation fell from 81 to 76 percent. The largest decline was for individuals living in households in the third quartile of the household income distribution, where the participation rate fell from 74 percent to 68 percent.
Pointer from Tyler Cowen.
Usually, I would have possible explanations handy. In this case, I am so stumped that I am willing to offer the possibility that their statistics are not accurate.
UPDATE: Possibly relevant:
According to a recent Pew report, the percentage of mothers who stay at home with their children (a statistic that includes non-working single mothers) fell from 49% in the late 1960s to a low of 23% in 1999, but then rose to 29% by 2012.
Note the use of the term “individuals,” which would include male and female, plus (perhaps) some juveniles or others outside the age-frame chosen.
One has to know “what” is included within what is measured as well as how it is measured.
I would be curious to know about earnings at each end of the distribution.
What change in real wages occurred at the bottom of the distribution, and similarly at the top?
Having scanned the presentation:
It does not appear that the “quintiles” are “weighted” by the proportions of ages of individuals within those groups.
E.G., : There may very well be many more individuals aged 15-19 in the “lowest income” third than in the highest quartile.
There may be a larger proportion (due to longevity, healthcare, life-styles) of individuals at the upper age ranges (who retire) in the upper income quintiles. etc., etc..
Welfare reform?
The lowering of minimum wage through inflation?
Middle class and rich teens work less and less?
Never the less it seems the minimum wage will not help the poorest because more do not work as much as they want.
Isn’t it a little odd to refer to “the other end of the income distribution” without specifying what segment of the distribution you’re talking about? Do we assume he’s referring to the top 10 percent because the previous sentence referred to the bottom 10 percent? Am I missing something?
My guess: Great Stagnation. Higher income families are running out of ways to signal their status with available options for conspicuous consumption, as engineers are figuring out how to mass produce goods cheaper and more efficiently much faster than they’re actually creating new kinds of products. Therefore, a marginal dollar of income is worth less to higher income families than it used to be, while lower income families see the value of their labor increasing at the margin, since they are in a position to play catch-up now in the signaling-via-conspicuous-consumption game.
I have absolutely no evidence for this claim.
Especially with your update, I don’t think we can rule out post-scarcity.
As the middle class has moved up in income, that higher mode is finding they have more income than they really need. Hence they are decreasing their labor hours, collaterally enabling the lower mode to raise their labor hours.