Krugman: Constant-demography Employment (Wonkish But Relevant)

[eridani]

http://krugman.blogs.nytimes.com/2012/10/06/constant-demography-employment-wonkish-but-relevant/?smid=tw-NytimesKrugman&seid=auto

But this measure too has problems; it’s the fraction of people 16 and over at work, which means that the denominator includes a rapidly growing number of seniors, who presumably don’t want to keep working. How can we correct for this demographic bias?

One answer, which I’ve used before, is to focus on prime-age adults, between 25 and 54; Calculated Risk did this yesterday, and pointed out that there has been some real improvement over the past year. This is a good quick-and-dirty approach. But it can lead to (false) accusations of cherry-picking, and it also throws out information.

So here’s an arguably better measure: constant-demography employment, which shows what would have happened to the employment-population ratio if the age structure of the population had stayed constant.