Week 5: E-Over-P

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Despite the wall-to-wall coverage, one fact about the early primary states you probably didn’t pick up is that they’ve both got nice looking employment-to-population ratios. The E/P ratio measures the proportion of the state’s working-age population (ages 16 to 64) that is employed. Since the Great Recession, economists have been tracking this measure closely because it gives a much better indicator of how labor markets are performing in periods when unemployment is relatively high.

Figure 1: Employment-to-Population Ratio by State

Among the 50 states, Massachusetts is tied with Connecticut for 14th place with an E/P ratio of 62.1 percent. Our E/P ratio has risen 1.5 percentage points from 2010 and we’ve moved up four positions from 18th place. However, the Massachusetts E/P ratio still sits about 5 percent below the state’s 2000 level (65.6 percent).

Figure 2: Massachusetts Employment-to-Population Ratio by Age, Percent Change 2010-2015

While the progress we’ve made is good news, a closer examination of the data points to an uneven recovery. For new labor markets entrants, the job market is certainly much better. Significant growth occurred among workers age 20 to 24 with E/P ratios rising 14 percent, from 58.7 percent in 2010 to 67.2 percent in 2014. Older workers haven’t fared well at all—E/P ratios for residents age 55 to 64 are actually down 2 percent from 2010 levels.

Changes in employment-to-population ratios by educational attainment also wear a variegated pattern. Less educated workers have seen the greatest rebounds, particularly those with some college but no degree. In contrast, the most educated workers have actually seen their E/P ratios fall. This change is probably indicative of a benign trend, perhaps more of these workers are temporarily exiting the labor market confident that they can quickly reenter in the future. It’s more notable that less educated workers still have significantly lower rates of employment participation; 75 percent of residents with a bachelor’s degree are working versus 62 percent of those with just some college.

Figure 3: Massachusetts Employment-to-Population Ratio by Educational Attainment, Percent Change 2010-2015

In future weeks, we’ll look at other measure of labor utilization, but for now we leave you with one fact to consider: since 2010, Massachusetts’s unemployment rate has fallen by more than 40 percent; in contrast, the state’s employment-to-population ratio has risen by only 2.6 percent.

Meet The Authors

Ben Forman

Research Director, MassINC

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