What’s causing low labor force participation in Ohio, Pennsylvania, Kentucky, and West Virginia?
Aging populations, high disability rates, and other population characteristics are holding down labor force participation in the four states served by the Federal Reserve Bank of Cleveland, according to a new report from the Cleveland Fed.
West Virginia had the lowest labor force participation rate in the nation in 2021 while Kentucky was 44th. Both states have older, more rural, and less educated populations, as well as high disability rates. Even so, their labor force participation rates are even lower than those characteristics would suggest, policy economist Joel Elvery writes in the report.
The story is different for Ohio, which was 29th, and Pennsylvania, which was 30th. Though both states had slightly lower labor force participation rates than the nation as a whole, those rates were higher than one would expect based on demographics.
“In Ohio and Pennsylvania, labor force participation is stronger than it appears on the surface,” Elvery writes.
Read the District Data Brief: The Influence of Population Characteristics on the Labor Force Participation Rates of Fourth District States
Federal Reserve Bank of Cleveland
The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.
The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
Chuck Soder, firstname.lastname@example.org, 216-672-2798