Macro Roundup

"... With this in mind, what is perhaps most dramatic about America’s giant defense budgets is their R&D component. Right now it runs to over $100 billion and makes up 14.6% of overall spending. The overall DoD allocation to “RDT&E” can be somewhat misleading since it includes a large element for testing as opposed to R&D proper.The American Association for the Advancement of Science compiles detailed figures for different types of government research funding. It credits $73 billion to the military account in 2020, below the all-time high reached in 2010, but sharply up from $53.58 billion in 2015. Spending on military R&D matches all Federal government spending on civilian R&D. It runs at twice what the Federal government spends on health and twenty times the Federal government’s spending on energy research. In global competition, the scale of America’s military R&D puts it in a league of its own...."

Chartbook #36 After Afghanistan: No Post-American world

The images from Afghan of American retreat sent shock waves around the world.

They sparked anxious talk of a post-American world.

As I argue in a New Statesman long read, a very different picture emerges if you look at the broader stance of the Pentagon.

What the budgets of the world’s largest military superpower tell us is not only that America’s defense effort is running at a historically high levels, but that its priorities are shifting towards high-tech weaponry for the deployment of military force at a planetary scale.

Since the Pentagon’s budget ebbs and flows, historical perspective is helpful. After the wind down of the 1990s, US military spending was driven to new heights by the Global War on Terror. Much of that spending was on on-going operations and on the Army which was fighting the war on the ground. Overall spending peaked in 2010 at $840 billion.

The latest increase began under Trump as the Pentagon's budget was pushed back to over $700 billion. Whilst spending on personnel and operations continues to decline, procurement and R&D spending have risen 30 percent from their recent lows.

So far, the Biden administration shows no appetite to reverse the direction of Trump’s defense policy. The request for National Defense in 2022 is $752 billion (of which $715 billion is DoD).

The Pentagon and the US military-industrial complex are a giant moloch, driven by many interests that do not map in any simple way onto the visions of military planners. But, nevertheless, in the spending patterns we can see a shift towards the priority of high-tech, great power confrontation with China. The momentum is not with the army but the air force, the new Space Force and the navy. R&D spending is gigantic.

To get a sense of the scale of the ambition, the US navy is a good place to look.

In an era of counterinsurgency wars and American global dominance, the navy lost priority. The number of operational vessels fell to a low in the 270s. The new focus on confrontation with China and the ambition of the Trump administration has kicked naval planning into a new high gear. Reading and writing about it you can’t help feeling transported back to 1900s. Not for nothing the US navy was the incubator for American geopolitical thinking.

Initially, the Trump administration limited itself to endorsing the Navy’s 2016 force structure assessment that proposed growing the fleet to 355 ships. This target was given the force of law by Congress.

But in the last days of the Trump administration in December 2020, Secretary Esper took the unusual step of releasing a detailed new shipbuilding plan - BattleForce 2045 - that called for 403 crewed ships and 143 uncrewed ships by FY 2045.

As the Congressional Budget Office remarked in rather stunned tones: “In CBO’s estimation, over the next 30 years, the Navy would spend a total of a little more than $1.0 trillion (in 2021 dollars) building the ships and unmanned systems in its December 2020 plan—an average of $34.1 billion per year. That amount of funding, each year for 30 years, would be unprecedented since World War II. Half of the funding would be for submarines, about one third would be for aircraft carriers and surface combatants, and the remainder would go toward amphibious ships, combat logistics and support ships, and other items.”

The great technological innovation contained in the Trump-era naval planning is the provision for a large fleet of unmanned vessels. The plan provides for between 119 and 166 unmanned medium surface vehicles (MUSVs) and large surface vehicles (LUSVs) and 24-76 extra-large unmanned undersea vehicles (XLUUVs), for a total of between 143 and 242 systems. As the CBO explains: “The LUSVs would operate in conjunction with other ships, carrying offensive and defensive missiles that manned ships could employ as needed. MUSVs would serve as sensor or command and control platforms, providing information about opponents to other ships in the Navy’s fleet. Although the Navy’s plan is less specific with respect to XLUUVs, they could carry a variety of payloads to support naval operations. The Navy is still developing its concepts of operations for unmanned systems, which increases the risk for both cost growth and delays in their construction and operations.”

In other words, this is a high-tech, futuristic stuff. They are going to have a lot of it. But they don’t know what it is going to do yet.

As the CBO notes: “Although the plan calls for building a significant number of unmanned systems, they represent a small fraction of the overall costs of the plan—an average of about $1.2 billion per year, or 4 percent of all shipbuilding costs.” For sake of comparison a single Ford-class aircraft carrier costs $ 12 billion. So, if an Orca, priced at a few tens of million dollars, can sink an aircraft carrier costing billions ….

How much of this will ever be realized remains unclear. According to analysts at CSIS, the aim of Esper’s maneuver may simply have been to “set a new baseline by which the new administration’s shipbuilding plans would be compared.”

The naval planners of the Biden administration are trying to sort out the mess left by their predecessors. Guestimates as to the final target for the fleet lie between the 320s and the 390s. But the basic focus of the Esper plan is likely to remain: submarines, new classes of smaller vessels, uncrewed ships.

One complicating factor is that the navy does not necessarily agree with the priorities of the DoD. In particular, the admirals don’t want a fleet of small aircraft carriers for launching F35s. Congress for its part is passionately attached to large shipbuilding goals and a minimum carrier fleet of 11 vessels. It is quite likely that advanced missile technology and the development of those cheap unmanned vessels will render the entire plan moot.

But there is no doubting the ambition. The withdrawal from Afghanistan in no way signals a retreat from global ambition.

The navy is only one part of the overall budget. Juggling the different components is a vastly complex business. Relating them to actual strategy even more so.

As think tankers at CSIS point out: “It has been about 15 years since DoD explained, even roughly, how it calculated the force levels that it was proposing. The Trump administration was typical. Its 2018 National Defense Strategy sought to “defeat aggression by a major power, deter opportunistic aggression elsewhere, and disrupt imminent terrorist and WMD threats” while defending the homeland and maintaining nuclear deterrence. That required 58 total Army brigade combat teams, 355 Navy ships, about 1,200 Air Force aircraft, and a Marine Corps of 185,000 personnel. There was no description about how the administration determined these very specific force levels from the very general description of strategic goals that it was proposing. This was not unusual. The Quadrennial Defense Reviews of 2014 and 2010 had the same lack of connection.”

In other words, America’s grand strategists formulate goals, the Pentagon draws up lists of things it wants, those have huge costs but it is unclear how each of these decisions relates to the other.

To address this issue, a consortium consisting of the Center for Strategic and International Studies, the American Enterprise Institute (yup), and War on the Rocks (the military news and opinion website), have “collaborated to address a shared concern: a lack of understanding about how defense strategy and security objectives are translated into concrete budget choices … The Joe Biden administration’s leaders have asserted that they view China as the “pacing threat” for the Defense Department. Yet how strategic priorities are translated into specific programs in the budget remains largely vague and imprecise. The Defense Futures Simulator will change that, making the process of aligning strategy and resources more accessible, transparent, and engaging.”

They are not the only group to offer you the chance to play grand strategist. The Congressional Budget Office also offers an “Interactive Force Structure Tool”.

Unfortunately, the CBO tool does not cover procurement costs, only operational and maintenance costs. But, with some back of the envelope calculations it can be augmented to provide a full overview of cost.

Last week, noted US security expert Barry R. Posen used the CBO’s force structure tool to devise his own US strategy that would involve stripping America’s commitment to NATO to the bare bones of the strategic nuclear deterrent. This would enable a reduction of 14 US army maneuver brigades, 315,000 personnel, two dozen squadrons of tactical air and littoral combat ships for a total saving of about $78 billion.

A Posenesque strategy would have dramatic implications for European defense. Europeans would have to step up to a considerable degree. It would no doubt produce howls of protests from Atlanticists and be seen as further evidence of “American retreat”. But, it would in fact have no significant impact on America’s strategic nuclear weaponry, its high seas fleet or its air force.

This is one of the insights that emerges from looking into the Pentagon budget. Personnel are very expensive and are getting more so. The Army, as opposed to the navy and airforce, employs a lot of people and that makes it exorbitantly expensive to maintain and operate. To maintain just one Armored Brigade Combat Team complete with National Guard component - numbering 30,000 men and women - at operational readiness, costs c. $ 4.1 billion per annum. That is the same as maintaining and operating America’s entire ICBM nuclear submarine fleet or the eight Minuteman III missile squadrons that provide the first line ground-based nuclear deterrent. Of course, developing and procuring the ultra high-tech submarines and missiles is a different matter.

This distinction between development, capital procurement, operational costs and personnel makes it imperative to break down any spending figures into their different components. As calculations like Posen’s suggest, the US could easily downsize its ground forces and tactical air component, saving tens of billions, whilst substantially increasing its throw weight, its global reach and its high-tech advantage.

********

With this in mind, what is perhaps most dramatic about America’s giant defense budgets is their R&D component. Right now it runs to over $100 billion and makes up 14.6% of overall spending.

In global competition, the scale of America’s military R&D puts it in a league of its own.

In a recent article Gholz and Sapolsky argue that America’s R&D advantage in military technology is so large that it is hard to see its losing its preeminence any time soon. I would not like to make a wager on that one way or another. But if the question is whether or not the shift in posture in Afghanistan implies a more general retreat from global power the answer is clearly no. The intention is the reverse. The US is seriously gearing up for a new era of global military competition. Given the focus on high-tech competition that will have broad implications for economic and industrial policy both in the US and across its alliance network.

Economist Staff, "Flush with billions, Databricks has momentum and big plans,"The Economist, September 4, 2021, https://www.economist.com/business/2021/09/04/flush-with-billions-databricks-has-momentum-and-big-plans

Flush with billions, Databricks has momentum and big plans

Hi, just checking in. Can I put in some more?” The bosses of promising startups are bombarded by such texts these days. Big funds in particular are falling over themselves to grab a piece of the tech pie (see chart). Yet one founder seems to have received more than his fair share of pitches: Ali Ghodsi, the chief executive of Databricks. And he has said yes to many. On August 31st the company confirmed that, only six months after a $1bn financing deal, it had raised another $1.6bn, valuing it at $38bn—$10bn more than after the previous round. Among the Silicon Valley cognoscenti, these numbers cement Databricks’ status as the most hyped company of the hour.

Databricks was founded in 2013 to commercialise Spark, a piece of open-source software that processes reams of data from different sources to train algorithms which then become the engines of ai applications. The firm added features, including code that makes it easier for developers to program the system as well as manage their workflow, and offered the package as a cloud-based subscription service.

Yet Databricks only really took off when it added another component called “lakehouse”. It is a combination of two sorts of databases, a “data warehouse” and a “data lake” (hence the portmanteau). Both have historically been separate because of technical constraints and because they serve different purposes. Data warehouses are filled with well-defined corporate data that allow a firm to look into its past, for instance at how its sales have evolved, something called “business intelligence” (bi). Data lakes are essentially a dumping ground for all sorts of data that can reveal a firm’s future, including whether sales are likely to go up or down. Yet this separation is increasingly inefficient and unnecessary, explains Max Schireson of Battery Ventures, an investor in Databricks. “Doing bi and ai in different systems today is kind of stupid,” he notes.

Firms have jumped on what Databricks offers, in particular incumbents worried about being disrupted by an ai-driven startup. Comcast, an American broadband provider, uses it to allow its customers to use their voice to select movies; abn Amro, a Dutch bank, to recommend services; and h&m, a fashion retailer, to optimise its supply chain. Databricks now claims more than 5,000 customers and annualised subscription revenue of $600m—75% growth year-on-year.

Throwing Databricks at Snowflake

Mr Ghodsi has set his sights even higher. “Ultimately, everything data should be on Databricks,” he says. He is planning on investing the newly raised capital to keep growing and become the leader in lakehouse systems. Nobody should fault Mr Ghodsi, who once taught computer science at the University of California, Berkeley, for his ambitions. Yet realising them will not be easy. Other firms are already pushing into the territory. He will probably be able to fend off the three big cloud-computing providers: Amazon Web Services, Google Cloud Platform and Microsoft Azure. Although they have more than enough resources to compete and provide integrated ai packages, they share one big problem. Firms increasingly prefer not to store all their data in a single cloud, fearing they will get stuck with one vendor. Instead, they opt for products, such as Databricks’, that run across several clouds.

Snowflake is a different story. It, too, is building lakehouses. It is also taking a different approach. Whereas Databricks is adding bi to its ai platform, Snowflake, which has grown up in the data-warehouse world, is adding ai to its cloud-based bi package, meaning that their respective products will increasingly overlap. Whereas most of Databricks’ code is open-source, Snowflake’s is proprietary. And whereas Databricks has mostly stuck to a “land-and-expand” strategy, whereby small software deals grow into bigger ones, Snowflake practises a more conventional top-down sales model that focuses on big deals from the start.

All this will make for a battle over the next few years. But it could be rudely interrupted if Microsoft snaps up Databricks. The software firm is already one of Databricks’ investors and co-operates closely with it. Among other things, Azure offers a version of Databricks’ platform and Microsoft uses its name in presentations about its strategy, something it rarely does with other firms. It would be a good fit. At its core, Microsoft is still a company selling tools for developers to write applications and platforms to run them on. And Databricks represents both a complement and a strategic threat: it lets data, rather than people, write the code.

Databricks’ ipo is not meant to take the firm public, according to some analysts, but to put a price on it, so that negotiations can start somewhere. But the hype surrounding the company could thwart such plans. Snowflake is now worth about $90bn. If Databricks’ ipo outdoes Snowflake’s, its asking price may well be north of $100bn. And like Pinterest, a social-media firm which Microsoft considered buying earlier this year, it may become too pricey even for a company as loaded as world’s biggest software firm.

Economist Staff, "Finding living planets,"The Economist, September 4, 2021, https://www.economist.com/schools-brief/2021/09/04/finding-living-planets

Finding living planets

Most pieces in this series of briefs have stayed within the realm of the biological, examining life at the levels of the species, the individual, the organ and the cell. But the first dealt with a subject central to biology but not inherently of it: molecules. No molecule can be said to be truly alive, and not all molecules are biological. But some are, and they are biological in distinctive, illuminating ways, revealing how life gets things done and passes information down the generations.

This last brief takes on a similar, though far vaster subject. Like molecules, planets do not have to be biological. But at least one is, and in a distinctive, illuminating way that reveals how life has consequences far beyond the organisms embodying it. Earth’s past, present and future cannot be understood without appreciating the planet’s biological aspects. And that appreciation is, in turn, crucial to finding other planets on which biology plays a role.

The idea that Earth is in some way alive, or can be treated as if it were, is common to many mythologies and sensibilities, and has been a theme in science for centuries. Its modern form, though, dates from the 1960s and the insights of James Lovelock, a British scientist then working at jpl, a laboratory in California that is responsible for most of America’s planetary science.

In thinking about the detection of life on other planets Dr Lovelock turned to a broad definition of the phenomenon: one offered by physicists and based on thermodynamics, the science of heat, work and order. This is that life uses, or creates, flows of matter and energy that allow it to increase and maintain complexity within itself. In doing so it deals with the universe’s natural tendency to break down complexity, thus creating disorder (known in thermodynamics as entropy), by actively increasing the entropy of the rest of the universe while reducing its own—exporting disorder, as it were.

Armed with this definition, Dr Lovelock proposed detecting life elsewhere by looking for signs of order, particularly in the form of chemical disequilibria—namely, intrinsically unlikely mixtures of chemicals that would have to be maintained by the persistent export of entropy. He concluded that the most detectable such order, at a planetary level, would be found in the composition of the atmosphere.

On Earth, a variable amount of water vapour aside, 99% of the atmosphere is nitrogen and oxygen. Most of the last 1% consists of argon, helium and neon (“noble” gases that demonstrate their nobility by being inert and fundamentally pointless), and other trace gases such as carbon dioxide and methane.

As Dr Lovelock pointed out, this mixture is way out of equilibrium. Oxygen and methane react with each other. Such reactions take place constantly in the atmosphere. For these gases to be present simultaneously requires active sources of one or both. On Earth, life provides these. Plants, algae and some photosynthetic bacteria produce oxygen. Single-celled archaea called methanogens produce methane.

What is more, with energetic encouragement (as offered, for example, by bolts of lightning), oxygen and nitrogen will react with each other too, creating nitrogen oxides. Again, it turns out that life provides a countervailing process which lets the levels of both gases stay constant, despite the lightning. De-nitrifying bacteria produce the energy they need by turning nitrogen-bearing compounds like those oxides back into gaseous nitrogen, thus continuously topping up the level in the atmosphere.

The atmospheres of Earth’s neighbours, Mars and Venus, provided a stark contrast to this picture of biologically driven instability. They contained no pairs of gases that, at concentrations observed, would be likely to react. They were in equilibrium. This led Dr Lovelock to two conclusions: that there was no life on Mars and Venus; and that Earth’s atmosphere was, to a certain degree or in a certain sense, alive. It was not made of cells or enclosed in a membrane. Nor could it reproduce. But the flow of energy and matter through the living bits of the planet kept the atmosphere in disequilibrium and held entropy at bay. Life’s imposition of order and disequilibrium thus operated beyond the boundaries of cells, individuals and species.

The first of these conclusions was not popular. Many scientists wanted to send robots to Mars to look for life. To be told from the off that such searches would be fruitless served no one’s interests. But fruitless they have proved so far to be.

The second conclusion led Dr Lovelock to hypothesise that Earth behaves, to some extent, as a living organism, in that biology-based processes provide it with a degree of self-regulation which the system as a whole uses in order to keep itself to life’s liking. This “Gaia hypothesis” was highly controversial in the 1970s and 1980s. The views of Dr Lovelock, his followers and his opponents have since evolved. The idea that life actively seeks to keep the environment to its liking, a crucial feature of the hypothesis in its early days, is not now widely held. It is, however, universally agreed that the composition of Earth’s atmosphere depends on biological activity and that various feedback mechanisms which maintain the planet’s habitability have biological components.

The idea of Earth’s environment being a creation of its evolving inhabitants, rather than a background against which they evolve, seems on the face of things quite unlikely. Earth’s living organisms are estimated to contain about 550bn tonnes of carbon. Add in the other elements and remember that living things are, by weight, mostly water, and you might get up to a few trillion tonnes all told. The atmosphere weighs 5,000trn tonnes. How could a thin green smear of life which weighs less than 0.1% of that be calling the shots?

Most of what life does with this energy is chemical: building molecules up, breaking them down and dumping some of the eventual waste products into the environment. And this chemical activity is persistent. The cycling which moves carbon from the atmosphere into living things (through photosynthesis) and back to the atmosphere (through respiration) has been fundamental to the planet’s workings for billions of years. The same goes for the cycling of nitrogen. The great biogeochemical cycles are older than any mountain range, ocean or continent. Their work mostly done by bacteria and archaea, they predate the dawn of animals and plants.

The composition of Earth’s atmosphere before the prokaryotes got their membranes on it is a subject on which there are few data. But the geological record makes one thing clear: it contained almost no oxygen. Significant amounts of free oxygen entered the air only after the relevant form of photosynthesis had evolved. At that point the level of bacterially produced methane—which, in the absence of oxygen, could be quite high—crashed. Because methane is a greenhouse gas, so did the temperature. Roughly 2.5bn years ago the “great oxidation event”, as it is known, plunged Earth into an ice age that saw ice sheets spread to the equator.

The subsequent history of the atmosphere, during which oxygen levels have increased episodically, is coupled to life in various ways. There seems to be a link between oxygen reaching a threshold level about 700m years ago and the evolution of the first animals—it is hard, perhaps impossible, to lead an energetically profligate animal lifestyle without the extra power that oxygen provides to a metabolism.

Vaster than empires, and more slow

The advent of trees, which were able to store carbon both in greater quantities than previous photosynthesisers and in forms that were hard for other organisms to break down, saw carbon-dioxide levels in the atmosphere fall far enough to trigger another global ice age. The recovery and utilisation of some of that hard-to-get-at carbon, now transformed to coal, is seeing life alter the atmosphere in yet another way a few hundred million years on—again with climatic consequences.

Over the decades which saw this new understanding of the role life had played in Earth history develop, Dr Lovelock’s associated insights about atmospheres as signals of life elsewhere made little progress. This was partly because of a lack of atmospheres. Aside from Earth’s, the solar system contains only seven thick enough to count. There have been reports of out-of-equilibrium trace gases on Mars (methane) and Venus (phosphine), but in both cases the evidence is shaky. The most recent orbital survey found no evidence at all for methane in the Martian atmosphere.

Happily, the past two decades have revealed thousands of planets orbiting other stars. Telescopes that can examine the atmospheres of some of these which look promisingly habitable should be available soon. One, the much delayed James Webb Space Telescope, is supposed to launch this Hallowe’en. If any of the orbs it studies suggest Gaia has been working her magic there, too, then the ideas these briefs discuss may one day undergo an intriguing examination. Some will probably turn out to be universal biological truths. Others, though, may just be chance properties of life on one particular planet.

“…Here, we consider every U.S. patent assigned to U.S. inventors since 1926, and show thatthe proportion of patents relying on federally funded science has outstripped the overall increase in patenting, plateauing since a high of 30.0% in 2011(see the first figure). Despite this plateau,the absolute number of patents that rely on federally supported research has almost doubled recently, from 22,647 in 2008 to 45,220 in 2017. We count reliance when a patent is owned by the government, acknowledges government support, or directly cites a patent or science paper that acknowledgessupport….Federal support
for U.S. invention gets routed through a variety of agencies. In 2017, for example, the Department of Defense (including the armed services) supported 6.2% of the total of U.S. inventions, HHS 5.4%,Department of Energy 3.9%, National Science Foundation 2.9%, NASA 1.0%,and Department of Agriculture 0.50% (others 5.5% and unspecified 2.5%; see SM for illustrations of R&D investment and patenting by agency and by technology class)….Large, small, and micro firms all draw upon government research, as observed in patent-renewal data. Startups also depend heavily on government research, as 34.6% of the 121,765 patents assigned to venture-backed companies from 1976 to 2016 cited federally supported research; by comparison, for all corporate patents during the same time period, only 21.7% rely on federally supported research. The higher reliance of startups on government supported research may be explained by resource constraints, which inhibit internal R&D expenditure in young ventures and encourage identification and external licensing of promising technologies. It also illustrates the intended consequence of the Bayh-Dole Act and an important path of commercialization for federal science and technology research….The average percentage of prior art citations within each patent that are supported by federal research fell from a high of 15.8% in 2003 to 9.9% in 2017. By contrast, citation of scientific papers that are supported by federal research reached a historical high of 10.7% in 2017, up from 6.9% in 2004 (see SM)….”

L Fleming, H Greene, G Li and D Yao, "Government-funded research increasingly fuels innovation,"Science, June 2019, https://www.science.org/doi/10.1126/science.aaw2373

"...Men are abandoning higher education in such numbers that they now trail female college students by record levels. At the close of the 2020-21 academic year, women made up 59.5% of college students, an all-time high, and men 40.5%, according to enrollment data from the National Student Clearinghouse, a nonprofit research group. U.S. colleges and universities had 1.5 million fewer students compared with five years ago, and men accounted for 71% of the decline. This education gap, which holds at both two- and four-year colleges, has been slowly widening for 40 years. The divergence increases at graduation: After six years of college, 65% of women in the U.S. who started a four-year university in 2012 received diplomas by 2018 compared with 59% of men during the same period, according to the U.S. Department of Education. In the next few years, two women will earn a college degree for every man, if the trend continues, said Douglas Shapiro, executive director of the research center at the National Student Clearinghouse. No reversal is in sight. Women increased their lead over men in college applications for the 2021-22 school year—3,805,978 to 2,815,810—by nearly a percentage point compared with the previous academic year, according to Common Application, a nonprofit that transmits applications to more than 900 schools. Women make up 49% of the college-age population in the U.S., according to the Census Bureau....At Baylor University, where the undergraduate student body is 60% female, the admission rate for men last year was 7 percentage points higher than for women. Every student has to meet Baylor’s admission standards to earn admission, said Jessica King Gereghty, the school’s assistant vice president of enrollment strategy and innovation. Classes, however, are shaped to balance several variables, including gender, she said....The college gender gap cuts across race, geography and economic background. For the most part, white men—once the predominant group on American campuses—no longer hold a statistical edge in enrollment rates, said Mr. Mortenson, of the Pell Institute. Enrollment rates for poor and working-class white men are lower than those of young Black, Latino and Asian men from the same economic backgrounds, according to an analysis of census data by the Pell Institute for the Journal....."

Douglas Belkin, "A Generation of American Men Give Up on College: ‘I Just Feel Lost’," Wall Street Journal, September 6, 2021, https://www.wsj.com/articles/college-university-fall-higher-education-men-women-enrollment-admissions-back-to-school-11630948233

A Generation of American Men Give Up on College: ‘I Just Feel Lost’

Men are abandoning higher education in such numbers that they now trail female college students by record levels.

At the close of the 2020-21 academic year, women made up 59.5% of college students, an all-time high, and men 40.5%, according to enrollment data from the National Student Clearinghouse, a nonprofit research group. U.S. colleges and universities had 1.5 million fewer students compared with five years ago, and men accounted for 71% of the decline.

This education gap, which holds at both two- and four-year colleges, has been slowly widening for 40 years. The divergence increases at graduation: After six years of college, 65% of women in the U.S. who started a four-year university in 2012 received diplomas by 2018 compared with 59% of men during the same period, according to the U.S. Department of Education.

In the next few years, two women will earn a college degree for every man, if the trend continues, said Douglas Shapiro, executive director of the research center at the National Student Clearinghouse.

No reversal is in sight. Women increased their lead over men in college applications for the 2021-22 school year—3,805,978 to 2,815,810—by nearly a percentage point compared with the previous academic year, according to Common Application, a nonprofit that transmits applications to more than 900 schools. Women make up 49% of the college-age population in the U.S., according to the Census Bureau.

“Men are falling behind remarkably fast,” said Thomas Mortenson, a senior scholar at the Pell Institute for the Study of Opportunity in Higher Education, which aims to improve educational opportunities for low-income, first-generation and disabled college students.

American colleges, which are embroiled in debates over racial and gender equality, and working on ways to reduce sexual assault and harassment of women on campus, have yet to reach a consensus on what might slow the retreat of men from higher education. Some schools are quietly trying programs to enroll more men, but there is scant campus support for spending resources to boost male attendance and retention.

The gender enrollment disparity among nonprofit colleges is widest at private four-year schools, where the proportion of women during the 2020-21 school year grew to an average of 61%, a record high, Clearinghouse data show. Some of the schools extend offers to a higher percentage of male applicants, trying to get a closer balance of men and women.

“Is there a thumb on the scale for boys? Absolutely,” said Jennifer Delahunty, a college enrollment consultant who previously led the admissions offices at Kenyon College in Gambier, Ohio, and Lewis & Clark College in Portland, Ore. “The question is, is that right or wrong?”

Ms. Delahunty said this kind of tacit affirmative action for boys has become “higher education’s dirty little secret,” practiced but not publicly acknowledged by many private universities where the gender balance has gone off-kilter.

“It’s unfortunate that we’re not giving this issue air and sun so that we can start to address it,” she said.

At Baylor University, where the undergraduate student body is 60% female, the admission rate for men last year was 7 percentage points higher than for women. Every student has to meet Baylor’s admission standards to earn admission, said Jessica King Gereghty, the school’s assistant vice president of enrollment strategy and innovation. Classes, however, are shaped to balance several variables, including gender, she said.

Ms. Gereghty said she found that girls more closely attended to their college applications than boys, for instance making sure transcripts are delivered. Baylor created a “males and moms communication campaign” a few years ago to keep high-school boys on track, she said.

Among the messages to mothers in the campaign, Ms. Gereghty said: “ ‘At the dinner table tonight, mom, we need you to talk about getting your high school transcripts in.’”

Race and gender can’t be considered in admission decisions at California’s public universities. The proportion of male undergraduates at UCLA fell to 41% in the fall semester of 2020 from 45% in fall 2013. Over the same period, undergraduate enrollment expanded by nearly 3,000 students. Of those spots, nine out of 10 went to women.

“We do not see male applicants being less competitive than female applicants,” UCLA Vice Provost Youlonda Copeland-Morgan said, but fewer men apply.

The college gender gap cuts across race, geography and economic background. For the most part, white men—once the predominant group on American campuses—no longer hold a statistical edge in enrollment rates, said Mr. Mortenson, of the Pell Institute. Enrollment rates for poor and working-class white men are lower than those of young Black, Latino and Asian men from the same economic backgrounds, according to an analysis of census data by the Pell Institute for the Journal.

Yet the stakes are too high to ignore, she said. “If you care about our society, one, and, two, if you care about women, you have to care about the boys, too. If you have equally educated numbers of men and women that just makes a better society, and it makes it better for women.”

The pandemic accelerated the trend. Nearly 700,000 fewer students were enrolled in colleges in spring 2021 compared with spring 2019, a Journal analysis found, with 78% fewer men.

The decline in male enrollment during the 2020-21 academic year was highest at two-year community colleges. Family finances are believed to be one cause. Millions of women left jobs to stay home with children when schools closed in the pandemic. Many turned to their sons for help, and some young men quit school to work, said Colleen Coffey, executive director of the College Planning Collaborative at Framingham State University in Massachusetts, a program to keep students in school.

“The guys felt they needed to step in quickly,” Ms. Coffey said.

It isn’t clear how many will return to school after the pandemic.

No plan

Over the course of their working lives, American college graduates earn more than a million dollars beyond those with only a high-school diploma, and a university diploma is required for many jobs as well as most professions, technical work and positions of influence.

Yet skyrocketing education costs have made college more risky today than for past generations, potentially saddling graduates in lower-paying careers—as well as those who drop out—with student loans they can’t repay.

Social science researchers cite distractions and obstacles to education that weigh more on boys and young men, including videogames, pornography, increased fatherlessness and cases of overdiagnosis of boyhood restlessness and related medications.

Men in interviews around the U.S. said they quit school or didn’t enroll because they didn’t see enough value in a college degree for all the effort and expense required to earn one. Many said they wanted to make money after high school.

Daniel Briles, 18 years old, graduated in June from Hastings High School in Hastings, Minn. He decided against college during his senior year, despite earning a 3.5 grade-point average and winning a $2,500 college scholarship from a local veterans organization.

He took a landscaping job and takes home about $500 a week. Mr. Briles, a musician, also earns some income from creating and selling music through streaming services, he said, and invests in cryptocurrencies. His parents both attended college, and they hope he, too, will eventually apply. So far, they haven’t pressured him, he said.

“If I was going to be a doctor or a lawyer, then obviously those people need a formal education. But there are definitely ways to get around it now,” Mr. Briles said. “There are opportunities that weren’t taught in school that could be a lot more promising than getting a degree.”

Many young men who dropped out of college said they worried about their future but nonetheless quit school with no plan in mind. “I would say I feel hazy,” said 23-year-old Jay Wells, who quit Defiance College in Ohio after a semester. He lives with his mother and delivers pallets of soda for Coca-Cola Co. in Toledo for $20 an hour.

“I’m sort of waiting for a light to come on so I figure out what to do next,” he said.

Jack Bartholomew, 19, started his freshman year at Bowling Green State University during the pandemic, taking his classes online. During the first weeks, he said, he was confused by the course material and grew frustrated. Finally, he quit. “I don’t know what I’m going to do,” he said. “I just feel lost.”

Mr. Bartholomew’s parents and one older sister have college degrees. He was a solid student in high school and was interested in studying graphic design. Yet while working online from his second-floor bedroom, his introductory courses seemed pointless for how much he was paying, he said.

He works 40 hours a week, at $15.50 an hour, packing boxes at an Amazon warehouse not far from his house in Perrysburg, Ohio. It isn’t a long-term job, Mr. Bartholomew said, and he doesn’t know what to do next.

“College seems like, to me at least, the only logical path you can take in America,” he said. But for now, he said, it is too big a struggle, financially and academically.

Tomorrow’s leaders

Men dominate top positions in industry, finance, politics and entertainment. They also hold a majority of tenured faculty positions and run most U.S. college campuses. Yet female college students are running laps around their male counterparts.

The University of Vermont is typical. The school president is a man and so are nearly two-thirds of the campus trustees. Women made up about 80% of honors graduates last year in the colleges of arts and sciences.

One student from nearly every high school in Vermont is nominated for a significant scholarship at the campus every year. Most of them are girls, said Jay Jacobs, the university’s provost for enrollment management. It isn’t by design. “We want more men in our pipeline,” Dr. Jacobs said, but boys graduate from high school and enroll in college at lower rates than girls, both in Vermont and nationwide.

The young men who enroll lag behind. Among University of Vermont undergraduates, about 55% of male students graduate in four years compared with 70% of women. “I see a lot of guys that are here for four years to drink beer, smoke weed, hang out and get a degree,” said Luke Weiss, a civil engineering student and fraternity president of Pi Kappa Alpha at the campus.

Female students in the U.S. benefit from a support system established decades ago, spanning a period when women struggled to gain a foothold on college campuses. There are more than 500 women’s centers at schools nationwide. Most centers host clubs and organizations that work to help female students succeed.

Young women appear eager to take leadership roles, making up 59% of student body presidents in the 2019-20 academic year and 74% of student body vice presidents, according to W.H. “Butch” Oxendine, Jr., executive director of the American Student Government Association.

“Across all types of institutions, particularly two-year institutions, but also extending into public and private four-year institutions, women dominate student government executive boards,” Mr. Oxendine said.

Many young men are hobbled by a lack of guidance, a strain of anti-intellectualism and a growing belief that college degrees don’t pay off, said Ed Grocholski, a senior vice president at Junior Achievement USA, which works with about five million students every year to teach about career paths, financial literacy and entrepreneurship.

“What I see is there is a kind of hope deficit,” Mr. Grocholski said.

Young men get little help, in part, because schools are focused on encouraging historically underrepresented students. Jerlando Jackson, department chair, Education Leadership and Policy Analysis, at the University of Wisconsin’s School of Education, said few campuses have been willing to spend limited funds on male underachievement that would also benefit white men, risking criticism for assisting those who have historically held the biggest educational advantages.

“As a country, we don’t have the tools yet to help white men who find themselves needing help,” Dr. Jackson said. “To be in a time when there are groups of white men that are falling through the cracks, it’s hard.”

Keith E. Smith, a mental-health counselor and men’s outreach coordinator at the University of Vermont, said that when he started working at the school in 2006 he found that men were much more likely to face consequences for the trouble they caused under the influence of drugs and alcohol.

In 2008, Mr. Smith proposed a men’s center to help male students succeed. The proposal drew criticism from women who asked, “Why would you give more resources to the most privileged group on campus,” he said.

Funding wasn’t appropriated, he said, and the center was never built.

The University of Oregon has one of the few college men’s centers, which offers help for mental and physical health. “Men don’t need to pull themselves up by their bootstraps,” said Kerry Frazee, director of prevention services, who works with the center. “No one can do it all by themselves.”

https://www.brookings.edu/research/how-can-we-track-trends-in-educational-attainment-by-parental-income-hint-not-with-the-current-population-survey/

Note, a 2015 post from Matthew Chingos and Susan Dynarski implies that the WSJ report on college entry we by parental income highlighted yesterday is likely wrong, "....To put it bluntly, these statistics are wrong. They are based on data from the monthly Current Population Survey (CPS). It would be wonderful if the CPS provided the income of young adults’ parents, but as a rule it does not. Parental information is present in the CPS only if the young adult is currently living at home, or is temporarily away from home. The primary reason a young adult is temporarily away from home is to attend college. Once a child forms her own household, she disappears from her parents’ CPS record. If we limit our analysis of the educational attainment of young adults to those who are linked to their parents’ CPS records, we have committed the mortal sin of selection bias: selecting the sample on the variable of interest...."

Properly trained talent as a potential limiting constraint to infrastructure, “…The issue underscores a perennial challenge for the skilled trades. Not enough young people are entering the sectors, a concern for companies as older workers retire from construction, carpentry and plumbing jobs. And although many skilled trade positions have competitive wages and lower educational barriers to entry, newer generations tend to see a four-year college degree as the default path to success. Infrastructure workers tend to be older than average, raising concerns about workers retiring and leaving behind difficult-to-fill positions. The median age of construction and building inspectors, for instance, is 53, compared with 42.5 for all workers nationwide. Only 10 percent of infrastructure workers are under 25, while 13 percent of all U.S. workers are in that age group, according to a Brookings Institution analysis…. Nicholas Kadavy, a third-generation mason who owns Nebraska Masonry in Lincoln, Neb., has seen his workload triple since April. He said his company had already scheduled out work until June 2022. He wants to hire more skilled masons to finish the projects sooner, but he can’t find enough people to fill the dozen positions he has open, even though he is willing to pay up to $50 an hour — twice what he offered before the pandemic. He checks his email daily, waiting for more applications to come in. “My biggest struggle is finding guys that want to work,” Mr. Kadavy said. Even when he does hear from applicants, Mr. Kadavy said, he is unable to hire many of them because they are not qualified enough. He was already seeing a shortage of skilled masons before the pandemic, he said, and he worries that the craft is “dying” because newer generations are not pursuing the field. The nation’s public transit systems would receive $39 billion under the infrastructure bill, allowing agencies to expand service and upgrade decades-old infrastructure. But transit agencies are dealing with worker shortages of their own, facing a dearth of bus drivers, subway operators and maintenance technicians. Metro Transit in Minneapolis is trying to hire about 100 bus drivers by the end of the year, said Brian Funk, the agency’s acting chief operating officer. The agency had originally aimed to hire 70 workers by the end of June, but it met only about half of that goal….”

Madeleine Ngo, "Skilled Workers Are Scarce, Posing a Challenge for Biden’s Infrastructure Plan,"New York Times, September 12, 2021, https://www.nytimes.com/2021/09/09/us/politics/biden-infrastructure-plan.html

Skilled Workers Are Scarce, Posing a Challenge for Biden’s Infrastructure Plan

WASHINGTON — The infrastructure bill that President Biden hopes to get through Congress is supposed to create jobs and spur projects for companies like Anchor Construction, which specializes in repairing aging bridges and roadways in the nation’s capital.

But with baby boomers aging out of the work force and not enough young people to replace them, John M. Irvine, a senior vice president at Anchor, worries there will not be enough workers to hire for all those new projects.

“I’d be surprised if there’s any firm out there saying they’re ready for this,” said Mr. Irvine, whose company is hiring about a dozen skilled laborers, pipe layers and concrete finishers. If the bill passes Congress, he said, the company will most likely have to double the amount it is hiring.

“We will have to staff up,” Mr. Irvine said. “And no, there are not enough skilled workers to fill these jobs.”

Mr. Biden has hailed the $1 trillion infrastructure bill as a way to create millions of jobs, but as the country faces a dire shortage of skilled workers, researchers and economists say companies may find it difficult to fill all of those positions.

The bill could generate new jobs in industries critical to keeping the nation’s public works systems running, such as construction, transportation and energy. S&P Global Ratings estimated that the bill would lift productivity and economic growth, adding $1.4 trillion to the U.S. economy over eight years. But if there is not enough labor to keep up with the demand, efforts to strengthen the nation’s highways, bridges and public transit could be set back.

“Do we have the work force ready right now to take care of this? Absolutely not,” said Beverly Scott, the vice chair of the President’s National Infrastructure Advisory Council.

A recent U.S. Chamber of Commerce survey found that 88 percent of commercial construction contractors reported moderate-to-high levels of difficulty finding skilled workers, and more than a third had to turn down work because of labor deficiencies. The industry could face a shortage of at least two million workers through 2025, according to an estimate from Construction Industry Resources, a data firm in Kentucky.

The pandemic has compounded labor shortages, as sectors like construction see a boom in home projects with more people teleworking and moving to the suburbs. Contractors have also faced a scarcity of supplies as prices soared for products like lumber and steel.

Job openings in construction have picked up at a rapid clip after the sector lost more than one million jobs at the beginning of the pandemic. According to an Associated Builders and Contractors analysis, construction job openings have increased by 12 percent from prepandemic levels. But the sector is still down about 232,000 jobs from February 2020, according to data from the Bureau of Labor Statistics.

The issue underscores a perennial challenge for the skilled trades. Not enough young people are entering the sectors, a concern for companies as older workers retire from construction, carpentry and plumbing jobs. And although many skilled trade positions have competitive wages and lower educational barriers to entry, newer generations tend to see a four-year college degree as the default path to success.

Infrastructure workers tend to be older than average, raising concerns about workers retiring and leaving behind difficult-to-fill positions. The median age of construction and building inspectors, for instance, is 53, compared with 42.5 for all workers nationwide. Only 10 percent of infrastructure workers are under 25, while 13 percent of all U.S. workers are in that age group, according to a Brookings Institution analysis.

“The challenge is, how are we going to replace — not just grow, but replace — many of the workers who are retiring or leaving jobs?” said Joseph W. Kane, a fellow at the Brookings Institution. “A lot of people, especially younger people, just aren’t even aware that these jobs exist.”

Community colleges, which offer a variety of vocational training programs, have suffered steep declines in enrollment. A recent estimate from the National Student Clearinghouse Research Center found that community colleges were the hardest hit among all colleges, with enrollment declining by 9.5 percent this spring. More than 65 percent of the total undergraduate enrollment losses this spring occurred at community colleges, according to the report.

Nicholas Kadavy, a third-generation mason who owns Nebraska Masonry in Lincoln, Neb., has seen his workload triple since April. He said his company had already scheduled out work until June 2022.

He wants to hire more skilled masons to finish the projects sooner, but he can’t find enough people to fill the dozen positions he has open, even though he is willing to pay up to $50 an hour — twice what he offered before the pandemic. He checks his email daily, waiting for more applications to come in.

“My biggest struggle is finding guys that want to work,” Mr. Kadavy said.

Even when he does hear from applicants, Mr. Kadavy said, he is unable to hire many of them because they are not qualified enough. He was already seeing a shortage of skilled masons before the pandemic, he said, and he worries that the craft is “dying” because newer generations are not pursuing the field.

The nation’s public transit systems would receive $39 billion under the infrastructure bill, allowing agencies to expand service and upgrade decades-old infrastructure. But transit agencies are dealing with worker shortages of their own, facing a dearth of bus drivers, subway operators and maintenance technicians.

Metro Transit in Minneapolis is trying to hire about 100 bus drivers by the end of the year, said Brian Funk, the agency’s acting chief operating officer. The agency had originally aimed to hire 70 workers by the end of June, but it met only about half of that goal.

Although he is optimistic that the agency will be able to fill those remaining positions after ramping up efforts to promote the openings, he said he was still wary about some workers choosing to leave.

“We know that every day that goes by, there’s the potential that somebody else is looking at either retirement or another job,” Mr. Funk said.

Some are optimistic that policymakers will be able to scale up work force development programs to keep up with the demand the infrastructure bill would create. Projects could take several months to get started, economists said, giving the country time to train workers who are not yet qualified.

“These problems are not insurmountable,” said Nicole Smith, the chief economist at the Georgetown University Center on Education and the Workforce. “Not having a sufficiently trained work force is something that can be addressed.”

But others are worried that the bill does not do enough to draw more people into infrastructure fields, especially historically underrepresented groups like women and people of color. Although Mr. Biden originally proposed a $100 billion investment in work force development, that funding was left out in the latest version of the bipartisan infrastructure bill. The funding would have invested in job training for formerly incarcerated people and created millions of registered apprenticeships, among other things.

Last week, the National Skills Coalition and more than 500 other organizations sent a letter to congressional leadership calling on it to include the funding in a separate reconciliation bill.

“President Biden promised that economic recovery was going to be predicated on equity,” said Andy Van Kleunen, the chief executive of the National Skills Coalition. “Work force training has to be part of that answer.”

Bart Hobijn and Ayşegül Şahin, "Maximum Employment and the Participation Cycle," National Bureau Of Economic Research, September 2021, https://www.nber.org/papers/w29222

Bart Hobijna and Aysegul Sahin argued that labor force participation is cyclical and lags the unemployment cycle; that LFP is driven by upticks in employment stability, for example lower job-loss risk and tight labor markets as opposed to labor force entry and exit. Unemployed workers are more likely to drop out of labor force than employed worker, ultimacy employment stability (or instability) is driving the participation cycle, "....The decomposition reveals thatthe source of the participation cycle is fluctuations in job-loss and job-finding rates, rather than cyclical movements in labor force entry and exit rates. The magnitude of the participation cycle is large. Cyclical downward pressures on employment from participation are two-thirds that of unemployment. Moreover,the participation cycle delays the recovery in employment because it lags the unemployment cycle. It also amplifies the unevenness of the impact of recessions. Groups that see large increases in their unemployment rates also experience more pronounced participation cycles. Despite differences in their magnitudes, the source of the participation cycle is the same for all groups..."

This implies that, "...the bulk of the drop in the participation rate since the onset of the pandemic is cyclical and that the cyclical recovery in participation likely will trail that of the unemployment rate.....They result in the estimate that 1.5 percentage points of the 1.7-percentage-point decline in the participation rate from February 2020 to June 2021 is due to the cyclical drag on the participation rate associated with the deterioration of job-loss and job-finding prospects since the onset of the pandemic. This result holds not just for the aggregate data. For all groups in our sample, the bulk of the decline in their participation rates is due to the participation cycle...."
Their dynamic, “..The entry and exit component captures the part of changes in the participation rate that can be traced back to changes in the probabilities of workers flowing across the participation margin, i.e., into and out of the labor force. This component puts upward pressure on participation at the beginning of recessions when the likelihood that the employed and unemployed drop out of the labor force goes down. Mostly, however, it captures the time-varying long-run trend behavior of the participation rate. The procyclical pressures on the participation rate come from the cycle component, which we call the participation cycle in the rest of this paper. These are the pressures exerted on labor force participation by job-loss (flows from employment to unemployment), and job-finding (flows from unemployment to employment). At first glance, it might sound puzzling that the flows that do not involve crossing the participation margin are the source of the procyclicality of the labor force participation rate. The intuition comes from recognizing that those who are unemployed are substantially more likely to drop out of the labor force than the employed.Specifically, the exit rate from the labor force for the unemployed averaged around 25 percent in 1978-2019. This is almost an order of magnitude larger than the labor force exit rate of employed workers which averaged 2.8 percent during the same period. The difference in these exit rates from the labor force creates a wedge that we refer to as the attachment wedge. The higher the fraction of the labor force that is unemployed, i.e., the higher the unemployment rate, the more likely workers are to drop out of the labor force in the future, which lowers the participation rate going forward. Since movements in job-loss and job-finding are the main drivers of fluctuations in the unemployment rate (Elsby et al., 2015), the unemployment cycle and the participation cycle are closely tied together. In terms of magnitude, we find that the procyclical forces that affect the labor supply during business cycles are large. Our analysis reveals that the downward pressure that the participation cycle puts on the employment-to-population (EPOP) ratio is about two-thirds that of the unemployment cycle. Moreover, the participation cycle lags the unemployment cycle. On average, the participation cycle bottoms out nine months after the unemployment rate peaks. This lag is even longer for deeper recessions. The participation and unemployment cycles tend to converge during labor market recoveries, moving in tandem especially in later phases of expansions. When the unemployment rate gets close to or is below its natural rate, declines in unemployment and cyclical upward pressures on participation have about the same effect on the EPOP ratio. This observation is consistent with the Perry-Okun rule that during strong labor markets a 1-percentage-point decline in the unemployment rate results in cyclical upward pressure of 0.65 percentage point on the participation rate. Using a very different methodology and more recent data we find a rule of thumb very similar to Perry (1971) and Okun (1973)... Our results establish that increases in employment stability for those in the labor force during strong labor markets put upward pressure on participation. That is, the reductions in job-loss and increases in job-finding when labor market conditions improve result in fewer and shorter periods of unemployment (see Marston, 1976), which reduces the likelihood that participants drop out of the labor force...."

Implications, "...The source of the upward pressures on participation during expansions has important policy implications especially in light of the maximum employment mandate being a broad based and inclusive goal. If the prevailing view were true, progress towards maximum employment when the labor market is hot and the unemployment rate is low mainly would be made through the re-entry into the labor force of workers from marginalized groups. Therefore, it would be important for policymakers to focus on movements in the participation rates of the groups of workers that bear the brunt of labor market downturns when the unemployment rate is low. Instead, our results suggest there is little need to shift the attention from the unemployment to the participation rate, especially of marginalized groups, at the tail end of expansions because the same forces are at play for all groups in the labor market. For all groups, the Perry-Okun rule is a reasonable rule of thumb. This means that, during the latter stages of the business cycle when the unemployment rate is low, cyclical upward pressures on participation move almost in lockstep with changes in unemployment rates. This is because for all groups the main procyclical forces on participation are driven by fluctuations in job-loss and job-finding rates that also account for the bulk of the movements in the unemployment rate. However, the magnitude of the participation cycle is highly uneven across groups as a consequence of the differences in the cyclicality and levels of unemployment rates. We find that the participation cycle amplifies the well-documented unevenness of recessions, as captured by different increases in group-specific unemployment rates. Groups with a higher increase in the incidence of unemployment also have larger procyclical pressures on their participation rate. Therefore, the groups hardest hit during recessions have the largest cyclical upward pressures on participation during recoveries and expansions. This includes low-skilled workers and workers who identify as Black, or African American, and Hispanic. Our new finding complements Wolfers’ discussion of Aaronson et al. (2019) where he shows that disadvantaged groups with higher unemployment rates also tend to have more cyclical unemployment rates….”

Evidence"... Figure 7 plots the cumulative contribution of the entry/exit and cycle to the change in the LFPR since the start of 1978 for the total population for 1978-2019 in panel (a).25 The entry/exit component is the main driver of the long-run trend in the LFPR. Interestingly, it also exhibits a countercyclical pattern putting upward pressure on the LFPR during recessions and a downward pressure later in expansions. This finding challenges the popular view that the procyclicality of the participation rate has its origins in discouraged workers leaving the labor force during recessions and re-entering the labor force as labor market conditions improve. We find that the net contribution of labor force entry and exit is not procyclical at all. On the contrary, the entry/exit component is decisively countercyclical, pushing against the procyclical forces we identify. It is the exit component that is responsible for the upward trend in participation from 1978 through 2000, largely driven by women (panel (c)). The increase in labor force participation among women was not because women was not because those who were not part of the labor force became more likely to join. Instead, it was driven by the increased attachment to the labor force of those women who already were part of it. While the entry component was relatively muted for women until the 2000s, it accounts for most of the decline since early 2000 in the participation rate of both men and women...."

"...The results are reported in the bottom half of Table 3. The “cycle” column of the row labeled “Total” shows that the estimated cyclical downward pressures on participation in 2021 are 0.4 percentage points lower than those in 2014. This finding has three important implications. First of all, in spite of a lower participation rate, the cyclical downward pressures on participation in 2021 are close to those in 2014. Thus, the similarities between early fall 2014 and the summer of 2021 extend beyond the unemployment and labor market flow rates to the participation cycle. The second is that it provides information about the average annual trend decline in LFPR. If the participation cycle now is comparable with that in September 2014, as the table suggests, then this implies that most of the 1.2-percentage-point decline in the participation rate from September 2014 through June 2021 is due to the secular downward trend in the participation rate. This observation suggests that the annual average decline in trend participation was about 0.17 percentage points a year during that period.41 This is in line with the estimate of the CBO of around 0.2 percentage points a year and slightly lower than the cohort-based estimates presented in Figure 3. The third implication is that the cyclical gains in participation that accumulated from 2014 through 2019 have not completely been erased by the COVID-19 Recession. On the contrary, the results by group in the “cycle” column of the second half of Table 3 show that cyclical downward pressures on the participation rates of young workers, those with less than a high school education, as well as Black or African Americans are all estimated to be a percentage point or more lower now than in the wake of the Great Recession. Put differently, the expansionary labor market in the 2014-2019 period helped create employment stability for these groups, which increased their attachment to the labor force. Even though the COVID-19 shock brought the participation cycle to a similar point as in September 2014, these groups still carried over part of the gains of the previous expansion, as evident in the differences in the cycle component in the second half of Table 3...."