The rise of the employment-population ratio in the United States is most likely explained by

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To understand the rise of the employment-population ratio in the United States, we need to consider what drives the proportion of the population that is employed.
Option a: an increase in female participation in the labor force. This is the most direct and plausible explanation, because if more women enter or re-enter the workforce, the number employed rises while the denominator (the working-age population) remains the same, leading to a higher employment-population ratio. This aligns with many labor market observations showing rising female labor force participation over recent decades.
Option b: a decrease in unemployment benefits. While shorter-term unemployment benefits can affect transition dynamics, a reduction in benefits does not inherently raise the employment-population ratio in a sustained way. The ratio is about who is employed versus who is of working age, not about the generosity of unemployment insurance, so this would be a less direct, weaker driver.
Option c: an increase in young people because of the baby boom. A larger cohort of young people could temporarily boost the labor force, but the baby boom era was largely in the past relative to the typical framing of the recent rise in the ratio. Moreover, young people’s participation rates tend to be lower than prime-age workers, so the effect on the overall employment-population ratio is not as strong or persistent as broad female participation gains.
Option d: improvements to capital. Better capital stock can raise productivity and potentially create more employment, but improvements to capital primarily affect output per worker rather than the share of the population that is employed. The employment-population ratio depends more directly on how many of the working-age population are employed, not just on productivity gains.
Option e: decrease in depreciation rate. A lower depreciation rate affects the stock of capital and the economy’s long-run growth path, but it does not directly determine the share of people who are employed today. This would be a more indirect and weaker channel for changing the employment-population ratio.
In summary, the most straightforward and widely supported explanation among the options is that more women entering the labor force increases the employment-population ratio, making option a the strongest candidate. The other options describe factors that are either more indirect, less persistent, or less directly tied to the measured ratio.

ECON2102-Macroeconomics 2 - T3/2025

The rise of the employment-population ratio in the United States is most likely explained by

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