June 18–20, 2007
Wequassett Inn
Chatham, Massachusetts

Agenda, Papers, and Presentations

The American labor force will be transformed as the 21st century unfolds. While the retirement of baby boomers will exert a downward pull on labor force participation, future labor supply will depend on many factors. Will baby boomers work longer than their parents did? How will the rising educational attainment of the young affect their lifetime labor supply? How will shifts in labor demand and supply affect relative wages? And what types of personnel policies are firms likely to pursue in response to these changes? This conference will map out what we know—and explore what we don’t—about the U.S. labor force of the future.

Reception

Welcome and Dinner

Breakfast

Introductory Remarks
Cathy E. Minehan

Session One: The Outlook for Labor Supply in the United States
Jonathan Pingle, Economist, Brevan Howard Asset Management
Presentation

This session will explore how demographic changes will likely affect the supply of labor in coming decades. Shifts in the relative supply of workers by gender and age will be examined, as well as expected changes in participation rates for each group. How will the population’s shifting age distribution affect aggregate labor supply in the next 30 years? How do differing projections of population growth, including the influence of immigration patterns and life expectancy, affect the outlook? How might changes in the participation rates of specific groups offset or exacerbate the effects of the changing age mix on the aggregate supply of labor?

Session Two: The Labor Supply of Older Americans
Alicia Munnell, Director, Center for Retirement Research at Boston College
Steven Sass, Associate Director, Center for Retirement Research at Boston College

Most research on labor supplied by older Americans has focused on the retirement decision. Yet when compared with preceding generations, baby boomers appear to be making different labor supply decisions as they approach traditional retirement ages: their labor force participation rates are higher at each age than those of earlier cohorts. What factors explain this reversal—changes in financial security, health, the nature of work?

And what do the key possible contributing factors imply about whether age-specific participation rates are likely to continue rising? What role do pension or retirement income security policies play?

Session Three: How Structural Shifts in Labor Demand Affect Labor Supply Prospects
David Autor, Visiting Associate Professor, University of Chicago

Labor supply depends not only on demographics but also on the returns to labor for different groups. Over the last several decades in the United States, substantial changes in the industrial and occupational composition of labor demand have altered the relative wages of various subgroups, most notably those of more- and less-educated workers. These shifts affect equilibrium quantities of employed labor—since an individual’s labor force participation is an increasing function of wages—and affect relative supply in the longer run through individual decisions to invest in human capital—also a function of wage prospects. Can we expect the labor demand trends of the 1990s and early 2000s to persist? Or do we expect changes in the payoffs to various groups of workers to alter supply outcomes? Is growing wage inequality, with compensation of the very top income earners outstripping that of the middle, likely to affect outcomes?

Breakfast

Session Four: The Cyclical Sensitivity of Labor Supply
Robert Hall, Robert and Carole McNeil Professor and Senior Fellow at the Hoover Institution, Stanford University

The pro-cyclical nature of employment is one of the most prominent features of the business cycle. A key question is the degree to which cyclical changes in employment, labor force participation, and hours worked are the result of individuals’ moving along their labor supply schedules in response to changes in wages and other prices. This session will examine both the intensive margin (hours of work, given employment) and the extensive margin (labor force participation and the transition from unemployment to work) of labor supply. The session will also address how first-order measurement issues (such as differences between the payroll and household employment surveys) affect our understanding of the cyclicality of employment.

Session Five: Labor Supply and Labor Demand in the Long Run
Dale Jorgenson, Samuel W. Morris University Professor, Harvard University

This session discusses long-run labor market projections for the United States, highlighting aggregation issues that become crucial at this level of analysis. For example, the decisions of married women to enter or leave the workforce undoubtedly influence the labor supply decisions of their husbands. The decisions of older workers to stay in the labor force may also affect the labor market prospects of the young. Therefore, it is important to understand how future labor demand may respond to the supply trends of different groups, as well as the supply interactions among these groups, in order to forecast longrun growth rates that are of interest to policymakers, such as the rate of potential output growth, or long-run increases in wages and living standards.

Session Six: Panel Discussion:
How Will the Private Sector Respond to Changes in Labor Supply?

Changes in the demographic structure of the nation’s work force, the further opening of international labor markets, and shifts in American attitudes toward work may lead to large changes in the labor-market policies of businesses. How will firms’ recruitment, training, and retention policies be affected by slower growth in the number of young workers? Will older workers be encouraged to maintain ongoing employment relationships with firms past the traditional retirement ages? Do Americans view work differently now than in years past, or have news accounts of the demand for more creative or “meaningful” work been overblown? And how will the availability and technological accessibility of foreign labor affect jobs that have traditionally been performed in the domestic economy?