Long-Term Dynamics of the 

Employment-to-Population Ratio

Karen Glenn, Deputy Chief Actuary

Social Security Administration

NBER Summer Institute 2023: Economics of Social Security

July 26, 2023
Why Does Employment Matter for Social 

Security Projections?

• First order: a higher employment-to-population ratio leads to more 

workers who make payroll tax contributions—and therefore an 

increase in payroll tax revenue

• Second order: over time, more contributing workers means more 

workers who receive benefits, and/or more total years of work per 

worker—and therefore an increase in benefit payments

• The net effect of higher E/P on financial status tends to be positive, 

because the increase in payroll tax revenue is realized before the 

increase in benefit payments

2
Factors in the OCACT (Trustees) Model

• Age

• Sex

• Marital status

• Presence of children under age 6

• State of the economy

• Disability prevalence

• Educational attainment

• Social Security benefit replacement rate

• Social Security retirement earnings test

• Cohort effects: lagged cohort effects for those age 75 and older

• Time trend: used only for some (younger) groups

3

For more detail, see Actuarial Study 127, Employment Projections in the 2022 Social Security Trustees Report, by 

Polina Vlasenko and Judith Aboagye (https://www.ssa.gov/OACT/NOTES/pdf_studies/study127.pdf)
Ratio of 

Employment to 

Population

Recovered strongly 

from the brief but steep 

2020 recession. 

After the assumed 

slowdown in growth in 

2023, the ratio is 

projected to return to 

about the peak level of 

2019.

4

0.45

0.50

0.55

0.60

0.65

0.70

0.75

1981 1991 2001 2011 2021 2031 2041 2051 2061 2071 2081 2091

Ratio of Employment to Population 

(16 and older, age-sex-adjusted to 2011 population)

2022 TR

2023 TR

Age-sex-adjusted

Men (age-adjusted)

Women (age-adjusted)

Historical Projected
Has the Labor Market Fully Recovered?

5

Employment and labor force participation have recovered to pre-recession peak for women, 

but not for men

0.50

0.55

0.60

0.65

0.70

0.75

0.80

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Labor Force Participation Rates

2023 TR

Age 16+, Age-Sex Adjusted

Women 16+, Age Adjusted

Men 16+, Age Adjusted

Historical Projected

0.50

0.55

0.60

0.65

0.70

0.75

0.80

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Ratio of Employment to Population 

2023 TR

Age 16+, Age-Sex Adjusted

Women 16+, Age Adjusted

Men 16+, Age Adjusted

Historical Projected
Ratio of 

Employment to 

Population vs. 

Quits Rate

The quits rate represents the 

number of voluntary separations 

(when an employee voluntarily 

leaves a job, regardless of 

whether it is followed by taking a 

job with a different employer) as 

a percentage of total 

employment.

Elevated quits rates suggest a 

tight labor market, in which 

workers are able to switch jobs 

easily, and usually correspond to 

periods of a high (or rising) ratio 

of employment to population.

6

0

0.5

1

1.5

2

2.5

3

3.5

0.50

0.55

0.60

0.65

0.70

2001Q12001Q32002Q12002Q32003Q12003Q32004Q12004Q32005Q12005Q32006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q12014Q32015Q12015Q32016Q12016Q32017Q12017Q32018Q12018Q32019Q12019Q32020Q12020Q32021Q12021Q32022Q12022Q3

Quits Rate versus Ratio of Employment to Population

(16 and older, age-sex adjusted)

Quits Rate

E/Pop 
Employment of 

the Disabled

Employment of individuals 

self-identifying as disabled 

appears to be gradually rising 

from low rates experienced in 

2013-15.

Current rates of employment 

are at the highest levels since 

the beginning of 2008. Will 

this continue to increase or 

level out?

Note that this is selfidentification of disability by 

CPS survey respondents, so 

the definition of disability may 

greatly differ from what is 

used for the OASDI program.

7

0

5

10

15

20

25

30

35

40

45

0

5

10

15

20

25

30

35

40

45

Jan-08 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Dec-21 Dec-23

Unemployment rate

LFPR, employment-to-population, and "prevalence"

Disabled Employment Data: Men+Women 18-64 

Disability prevalence Disabled LFPR Disabled employ-pop ratio Disabled U/E rate

0

5

10

15

20

25

30

35

40

45

45

50

55

60

65

70

75

80

85

Jan-08 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Dec-21 Dec-23

Unemployment rate

LFPR, employment-to-population, and "prevalence

Non-Disabled Employment Data: Men+Women 18-64 

Non-disabled LFPR Non-disabled employ-pop ratio Non-disabled U/E rate
Employment Over Age 65...

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declined briefly with the 2020 recession, but is projected to continue rising. How much of this is 

from changing the NRA and earnings test? Is the best retirement approach a job (Paul Samuelson)?

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Ratio of Employment to Non-Institutionalized Population, Men, by Age

25-54

55-59

60-64

65-69

70 and older

Start of 2008 

recession

Start of 2020 

recession

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Ratio of Employment to Non-Institutionalized Population, Women, by Age

25-54

55-59

60-64

65-69

70 and older

Start of 2008 

recession

Start of 2020 

recession
Long-Term Dynamics of the 

Employment-to-Population Ratio

Steve Goss, Chief Actuary

Social Security Administration

NBER Summer Institute 2023: Economics of Social Security

July 26, 2023
Goods and Services Produced by Those Employed Support 

the Entire Population—So Age Distribution is Key

10

With the drop in birth 

rates after 1964, we 

have long known that 

the share of the adult 

population (and of the 

total population) at 

traditional working 

ages 20-64 would be 

shrinking in the future.
Goods and Services Produced by Those Employed Support 

the Entire Population—So Age Distribution is Key (cont.)

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• After 1970, the share of the adult 

population under age 45 rose 

quickly through 1990, lessening 

relative demand for workers at 

higher ages. 

• But this reversed dramatically 

after 1990, with the share of the 

population under age 45 

shrinking. 

• There was a similar shrinking 

share under age 65 after 2010. 
Since 1970, Employment Rates by Age Have Changed 

Substantially, and Very Differently for Men and Women 

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• Women have 

responded, 

increasing 

employment at 

all ages. 

• But men have 

fallen from their 

employment 

rates in 1970. 
Between 1970 and 1990, Increased Employment by Women 

Under Age 55 and Drop in Population Under Age 20 

Caused Employment as a Percent of Total Population to Increase

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• However, due to DI 

maturing through 1990, 

and the changing adult age 

distribution after 1990, 

employment is steadily 

falling behind growth in 

OASDI beneficiaries.

• In order to maintain the 

ratio of workers to OASDI 

beneficiaries, we would 

need a much larger 

increase in employment.
What If the Employment Rate for Men Had Not Changed 

Since 1970?

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• This would not have 

been nearly enough. 

• To avoid the need for 

increasing taxes or 

reducing benefits, 

employment would 

need to increase above 

current expectations 

by over one-third. 
A One-Third Increase in Average Weekly Employment for All Ages Above 

Current Expectation (63% for Men and 54% for Women) Seems Implausible 

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So, What Are Our Options, Given the Dramatic Change in 

Population Age Distribution We Are Experiencing? Not Just 

Social Security, But Overall Standard of Living Is at Risk

1. Increasing population will increase demand for goods and services, and thus demand for workers, as 

we are now seeing in current tight labor markets. Will increased E/P above current expectations 

materialize as a result? Will the nature of work evolve to facilitate and encourage people to continue 

working to ever older ages?

2. Will there be increases in births and immigration due to future national policy, resulting from public 

understanding of the implications of the changing age distribution? 

3. Will there be an increased demand for workers in the face of aging infrastructure and the need to 

address the challenges of climate change?

4. Will there be innovations to greatly increase labor productivity far beyond growth in recent years? Will 

this help or hurt employment demand?

5. Or will we need to increase scheduled taxes, lower scheduled benefits, or some combination of these 

approaches—as in most past major legislation?

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Questions? Comments? Discussion?

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