The U.S. has millions of ‘missing’ workers—but the gap largely isn’t being caused by COVID-19, study finds

In a research paper published Wednesday ahead of an annual conference run by the Brookings Institution thinktank, Katharine Abraham, a University of Maryland economics professor and former U.S. Bureau of Labor Statistics commissioner, and Lea Rendell, a University of Maryland doctoral candidate, examined how the labor force had changed since the COVID-19 pandemic.

According to the paper, titled ‘Where Are the Missing Workers?’, the number of Americans looking for work plummeted by more than 3 percentage points during the first two months of the pandemic—representing a decline of 8.2 million people.

Around half of that drop was “quickly regained,” the study’s authors said, with workforce participation recovering further in the second half of 2021.

However, Abraham and Rendell found that since then, “participation again appears to have stagnated.”

Over the 12 months ending December 2022, they said, labor force participation was about 0.9 percentage points lower than the 12-month average ending Feb. 2020—a shortfall close to 2.4 million workers.

During the same period, the average hours worked per week also declined by around 0.6 hours, the study said—contributing an additional labor shortfall that the study’s authors said was the equivalent of another 2.4 million workers.

After accounting for changing population demographics that influence people’s willingness to work, like age and education levels, they estimated there had been a post-pandemic decline in workforce participation of around 0.5 percentage points.

‘Should have been anticipated’

“Much of the decline in labor force participation over the past three years should have been anticipated even absent the pandemic,” they wrote in their paper.

According to official data, 62.5% of Americans were working or looking for work in February, 0.8 percentage points fewer than had been doing so in February 2020, shortly before U.S. states began to implement lockdown measures.

The study estimated that less than half of the missing workers’ lack of participation could be attributed to fear or catching COVID or having developed long COVID.

Just 700,000 missing workers were estimated to not be participating in the workforce due to long COVID, they study’s authors said.

“We believe that both fear of COVID and long COVID have put downward pressure on the participation rate, though in both cases we estimate the magnitude of the effect to be considerably smaller than some previous analyses have suggested,” its authors wrote.

They offered another suggestion for what might have caused the stagnation in the labor market: a post-pandemic change in the way Americans feel about work.

“Consistent with a considerable amount of anecdotal evidence, it is possible that the lower level of hours [worked] reflects a broad-based re-evaluation regarding the balance people wish to strike between their work and personal lives,” the study’s authors wrote.

They pointed to trends like “quiet quitting” and noted that the media was full of stories about professionals stepping back from “demanding working schedules.”