The Jobs and Workers of Tomorrow

The aging of the U.S. population will drive demand for health-care jobs, and nearly one-quarter of the American workforce in ten years will be 55 or older.

The latest employment projections from the Bureau of Labor Statistics reveal the effect of the aging population on both labor demand and labor supply. These projections, updated every two years, were released this morning and provide a comprehensive view of how the labor market might change over the next decade. I’ll be looking at these and related data as part of a new research project with Bloomberg Beta.

The fastest growing and declining occupations

Looking first at occupational groups, the fastest growing are projected to be healthcare support occupations (like nursing assistants and home health aides) and healthcare practitioners and technical occupations (like doctors and nurses). Many high-tech jobs are classified under computer and mathematical occupations, which are projected to grow quickly though not as quickly as the health-related occupations. Production occupations — two-thirds of which are in manufacturing firms — are expected to decline, as are farming, fishery, and forestry occupations.

major occupational group chart

At a more detailed level, the fastest-growing occupations are mostly health-related, led by large increases in physical therapy, occupational therapy, and nursing. Tailwinds are strong for wind turbine service technicians — whose ranks are expected to double — and the numbers are adding up for statisticians, too.

fastest growing occupations

The fastest-declining occupations include many that produce or transport physical goods, including locomotive firers. Plus, modern communication technologies continue to displace mail-processing, telephone, and switchboard operators.

fastest declining occupations

Faster-growing occupations require more education

Alongside its employment projections, the BLS reports the level of education needed to enter each occupation. I combined occupations requiring the same level of education and compared the total projected growth across the groups. The fastest growing are projected to be those needing a master’s, doctorate, or professional degree. Many of the fast-growing healthcare jobs require these advanced degrees. But the slowest-growing occupations aren’t those needing the least education. Rather, occupations requiring a high school degree are projected to grow more slowly than those requiring no formal credential. Occupations requiring a high-school degree accounted for 36% of jobs in 2014 and are important for middle-class opportunity. The slow growth of jobs requiring high school degrees will cause the labor market to continue to polarize into jobs requiring more education and those requiring less.

job growth by education

The fastest-growing occupations have something else in common. Six of the ten fastest-growing occupations — all of the therapy and nursing occupations — are dominated by women. Just three — wind turbine service technicians, commercial divers, and ambulance drivers — are mostly male. (Statisticians are roughly 50/50.) This pattern holds across the full set of jobs: female-majority occupations are projected to grow 7.7% over the next ten years, versus 5.1% for male-majority occupations. (Of course, the sex ratio of occupations could change in the future as well.)

Breaking it down further, by sex and educational requirements, the slowest-growing occupations are projected to be those that require a high school degree and are traditionally male — including many production (i.e. manufacturing) occupations. Employment in those occupations is projected to grow just 3.0% over ten years — less than one-fourth the growth rate of female-majority occupations requiring a master’s, doctorate, or professional degree.

job growth by education and sex

The aging workforce

Just as the aging population will change the types of jobs we’ll need, the workforce itself will age. Two trends will work together to make this happen. First, of course, is that baby boomers will be aging into their 60s and 70s. The number of adults 55+ is projected to increase 21% between 2014 and 2024. In contrast, the number of 25-54 year-olds — the “prime working-age population” — is projected to increase just 4% over the same period, despite the large number of young millennials (age 20-24) moving into prime working age.

Second is that labor force participation is projected to rise most for age groups 55+, especially those 65-74. The BLS projects that the share of 55-64 year-olds who are in the labor force (that is, people who are either employed or unemployed but actively looking for work) will rise from 64.1% in 2014 to 66.3% in 2024. For 65-74 year-olds, the labor force participation rate is projected to rise from 26.2% to 29.9%. In other words, people will be retiring later. In contrast, the BLS expects the labor force participation rate for younger age groups to stay flat or decline.

change in LFPR by age

The combination of faster population growth and rising labor force participation among older adults and means that nearly one-quarter (24.8%) of the workforce in 2024 will be 55+. That’s up from 21.7% in 2014 and just 11.9% twenty years earlier, in 1994. Seniors (65+) will be 8.2% of the labor force in ten years — nearly three times their share of 2.9% twenty years ago.

share of older adults in labor force

These projections reveal the significant impact the aging population will have on labor demand and labor supply. Health-care jobs will grow fastest, and nearly one-quarter of the labor force will be older than prime working-age (a term that might itself need to be retired). More generally, job growth will favor women and those with advanced degrees, while men with high school degrees may face the biggest labor-market challenges.

Note: all data, with the exception of the sex ratio of occupations, are from the Bureau of Labor Statistics. Sex ratio by occupation was calculated from the American Community Survey (ACS) Public Use Microdata Sample (PUMS), 2012-2014. The BLS provides more detailed occupation codes than the ACS, so in some cases the sex ratio for a broader occupation reported in the ACS was assigned to multiple, more detailed occupations reported in the BLS projections. ACS data were downloaded from IPUMS, which requests to be cited as: Steven Ruggles, Katie Genadek, Ronald Goeken, Josiah Grover, and Matthew Sobek. Integrated Public Use Microdata Series: Version 6.0 [Machine-readable database]. Minneapolis: University of Minnesota, 2015.

Why Millennials Still Live With Their Parents

The entire increase in young adults living with their parents over the past twenty years can be explained by demographic shifts. That means the high share of millennials living with parents today might be the new normal.

This morning the Census reported that more young adults are living with their parents in 2015 than during the recession. Despite widespread expectations (including my own) that young people would move out as the job market recovered, they are not. The share of 18-34 year-olds living with parents was 31.5% in 2015, up from 31.4% in 2014. (These Census data are from March of each year. See note at end of post on data and methods.) Using different Census data, Pew recently reported that in 2014 the share of young adults living with parents or relatives was at its highest level since 1940 for men and even earlier for women.

The chart below shows the trend. (The charts in this post differ slightly from the newly published Census tables. See note for why.) After dropping a bit from the late 1990s to the early 2000s, the share of 18-34 year-olds living in their parents’ home rose steadily from 2005 to 2012 and has remained near this post-recession high even as the economy has recovered and unemployment for young adults has dropped sharply.

in parents home 1834 112215

Because the share of young adults living with their parents rose suddenly after the housing bubble of the mid-2000s burst, it’s natural to explain this trend in terms of recent housing and labor market dynamics. After all, young adults with jobs are much less likely to live with their parents than young adults without jobs are. Plus, rising rents and student debt burdens might be holding young people back from moving out of their parents’ homes.

However, alongside recent swings in the housing and job markets, there have been profound long-term demographic shifts that are related to young adults’ living arrangements. For instance, an unusually high share of 18-34 year-olds are at the young end of that range, and younger young adults (18-24) are much more likely to live with parents than older young adults (25-34). An especially important trend is that people are waiting longer today than in the past to get married and have kids — so the share of 18-34 year-olds who are married with kids has plummeted from 49% in 1970 to 36% in 1980, 32% in 1990, 27% in 2000, 22% in 2010, and just 20% in 2015. Unsurprisingly, married young adults and those with children are far less likely to live with their parents than single or childless young adults.

married with kids 1834 112215

How much have these longer-term demographic shifts contributed to the increase in young adults living with their parents? Using regression analysis, I estimated how much these demographic shifts contributed to changes in young adults living with parents in order to extract the demographics-adjusted trend. I included a standard set of demographic variables: five-year age subgroup, marital status, presence of children, sex, race, ethnicity, nativity (i.e. native- or foreign-born), current school enrollment, and educational attainment.

Adjusted for demographic shifts, the share of young adults living in their parents’ home was actually lower in 2015 than in the pre-bubble years of the late 1990s. In other words, young people today are less likely to live with their parents than young people with the same demographics twenty years ago were. To be sure, even the demographics-adjusted share of young adults living with their parents has climbed back up since the housing bubble burst around 2006, but it remains below pre-bubble levels from the 1990s.

in parents home 1834 demographics adjusted 112215

In this kind of analysis it’s important not to explain too much away using demographics, especially if demographic trends might themselves be an effect of living with parents or of the recession. For instance, it’s possible that living with parents might delay marriage: sleeping in your childhood bedroom probably doesn’t help your social life. In fact, though, the decline in young adults being married with kids long pre-dates the recession and the rise in living with parents, and has been relatively steady for decades (see chart above). That means marrying later is not the effect of the post-2005 increase in living with parents.

The other demographic variables we might not want to adjust for are school enrollment (i.e. are you currently in college) or educational attainment (i.e. what’s the highest degree you’ve earned). School enrollment and educational attainment are affected by the economic cycle and affect whether you live with your parents. Plus, the Census counts full-time students in dorms as living with their parents in the data used in this analysis. As a check, I dropped the school enrollment and educational attainment variables and limited the sample to 25-34 year-olds only, few of whom are still in school. The story remains the same: while the demographics-adjusted share of young adults living with parents has increased since the mid-2000s, it remains slightly below the pre-bubble level of the 1990s.

in parents home 2534 demographics adjusted 112215

So that’s the punchline: the increase in young adults living with parents over the past twenty years can be explained entirely by demographic changes. The increase since 2005 is not an aberration; once demographics are taken into account, the aberration is the bubble years of the mid-2000s, when an unusually low share of young adults was living with parents.

Adjusting for demographics doesn’t make the recent increase in young adults living with parents — or the implications for today’s housing market — any less “real.” The increased share of young adults living with parents means that household formation is being driven not by millennials but by baby boomers, and helps explain the low share of first-time home-buyers.

But adjusting for demographics does change what we should expect from the future. Because the demographics-adjusted share of young adults living with parents today is similar to pre-bubble levels, long-term demographic shifts may simply have pushed up the share of young adults living with parents to a new normal. Unless demographic trends reverse, the share of young adults living with parents is unlikely to fall much. Today’s millennials will leave their parents’ homes as they age — they’re not going to live there forever. But it won’t be the sudden unleashing of pent-up demand we might have expected if the increase of living with parents were only about the housing bust and recession and not about longer-term demographic shifts.


  • All original data and charts in this post are based on my analysis of the Current Population Survey’s (CPS) Annual Social and Economic Supplement (ASEC). For 2014, when the ASEC used a split sample, I combined the 5/8 and 3/8 samples and weighted them appropriately. The published Census tables on families and living arrangements, available here, are based on the same underlying data but with minor differences in how living at home or with parents is calculated.
  • The pre-bubble years (1994-1999) are the baseline, so the actual and demographics-adjusted shares of young adults living with parents, averaged over those years, are equal by construction. The analysis begins in 1994 because that’s the first year when the complete set of demographic variables is available.
  • I downloaded the CPS-ASEC data from IPUMS, which requests to be cited as: Sarah Flood, Miriam King, Steven Ruggles, and J. Robert Warren. Integrated Public Use Microdata Series, Current Population Survey: Version 4.0. [Machine-readable database]. Minneapolis: University of Minnesota, 2015. 
  • The Pew report cited in the blogpost used data from the American Community Survey and decennial Censuses, which yield different estimates than the CPS-ASEC but the same broad trends.

Bay Area Leads the U.S. in Job Growth

The Bureau of Labor Statistics just posted data on metro-level job growth for October 2015. (Their report on these data, however, won’t be published until December 7.) Two trends stand out.

First: looking at large metros — those with one million or more people — the San Jose and San Francisco areas have the fastest job growth in the country.

fastest oct 2015

Sure, the tech industry is booming, which boosts Bay Area employment. But fast employment growth in San Jose and San Francisco is nonetheless striking because limited housing construction in the Bay Area holds back growth and adds to housing costs. (Last week, the President’s chief economist, Jason Furman, gave a speech on how land use regulations hold back local economies. And this academic paper shows how housing-supply constraints restrict growth in productive cities and hurt national economic growth.)

All of the 10 large metros with the fastest job growth were in the South and West, including several in states that suffered the worst of the housing bust.

The second notable fact is that Houston — after years of fast growth — is now among the slowest-growing large metros, hurt of course by the decline in oil prices.

slowest oct 2015

None of the slowest-growing large metros are in the West, and half are in the Northeast & Midwest.

One last point: Texas has both fast (San Antonio, Dallas, and Austin) and slow (Houston) growing metros. Texas — like other large states — is economically diverse, and it makes little sense to look at job growth, unemployment, or other economic indicators at the state level because it obscures huge differences in economic activity within the state.

Note: data shown are for metro areas and metro divisions (where defined) with one million or more people. These data are from the Bureau of Labor Statistics.