U.S. employers again have turned their attention to the shortage of labor they anticipate will occur in the not-too-distant future. Concern about this possibility waned when the historically low unemployment rates from 1998 to 2000 rose during, and for some two years after, the March-November 2001 recession. In 2007, however, the national unemployment rate averaged just 4.6%. This suggests the presence of tight labor market conditions that are related to long-running demographic trends. The oldest members of the baby-boom generation will reach 60 years of age by the end of 2006, and every year thereafter, more of the 76 million persons born between 1946 and 1964 will move into their early 60s, when most workers traditionally have retired. As a consequence, observers—particularly members of the business community—have expressed the belief that the supply of U.S. labor will fall short of employer demand in coming decades. While the public budgetary effects of the aging of the baby-boom cohort have been much studied, the implications for the private economy have been less thoroughly researched. Proponents of the labor shortage scenario assert that the nation's rate of economic (output) growth will slow because worker-starved U.S. firms would be unable to produce the quantity of goods and services demanded by U.S. consumers. They further argue that the competitive position of U.S. industries will suffer because foreign companies would expand sales not only to the domestic market but also to other markets now supplied by U.S. firms. Even if businesses were able to coax more individuals into the U.S. labor force by bidding up wages, it is claimed that a similar end-result could occur. Employers would try to pass the increased cost of production onto buyers, resulting in higher prices that, among other things, would diminish the purchasing power of U.S. workers' wages. The market share of U.S. businesses could shrink as well, if domestic and foreign purchasers react to these higher prices by switching to less costly goods and services from other countries. This frequently voiced view omits actions that employers could take, other than raising wages, to ameliorate the labor market tightness they expect to occur when baby-boomers stop working. It also assumes that baby-boomers will behave similarly to preceding generations of older workers in terms of the rate at which they participate in the labor force and the length of their working lives. The scenario similarly does not consider that Congress might take legislative action to mitigate the effect on the private economy of a perceived shortfall of workers—something it has done in the recent past (e.g., loosening and raising the cap on H-1B visas for foreign workers in professional occupations). In addition, shortage proponents often paint firms with a broad brush, raising the question of whether each firm is as likely as the next to be affected by the baby-boomers' retirement. This report takes a close look at the labor shortage scenario prompted by baby-boomers moving from the work phase to the retirement phase of their lives. It first sets forth past and projected trends in the supply of labor available to U.S. businesses in general. The potential impact of the baby-boom generation's withdrawal from the workforce on different industries, and the occupations within them, is then analyzed. The report concludes with an examination of factors that could affect the likelihood of an imbalance between labor supply and demand in the coming years. With over 153 million persons employed or actively seeking employment in 2007, the labor force more than doubled in size since 1967. (See Table 1 .) Within the 40-year period, however, the pace of growth fell by more than half during the most recent compared to the first 20 years. The diminished rate of labor force growth in recent decades is related, in part, to the substantially reduced number of births in the United States. The cohort of some 76 million individuals born between 1946 and 1964 was aptly dubbed the baby-boom generation. As the members of this very large group entered the workforce 16 or more years after birth, the baby-boomers greatly increased the aggregate supply of labor: by 28.0% between 1967 and 1977, and by 21.1% between 1977 and 1987. (See column 2 of Table 1 .) The baby-boom generation was followed into the labor force by the suitably named baby-bust cohort, which totals some 45 million persons born between 1965 and 1976. The small size of the baby-bust group contributed to the decrease in young workers and the ebbing of overall labor force growth as its oldest members began to enter the workforce during the 1980s. During the 1990s, the baby-boomers continued to buoy the overall supply of labor. By 1989, the youngest baby-boomers had reached 25 years of age, and the oldest members of the group were 43 years of age. The entire cohort thus was in the prime work-age group (25-54 years old), which historically has had the highest rate of participation in the labor force. (The labor force participation rate, shown by age over time in Figure 1 , below, is the share of the civilian noninstitutional population that is employed or actively seeking employment.) In 2007, for example, more than 4 of every 5 persons in the population aged 25-54 were members of the labor force; in contrast, about 3 of every 5 individuals aged 16-24 had a job or were looking for one, while still fewer persons 55 years and older—less than 2 in 5—were attached to the workforce. The advancement of the numerous baby-boomers into the prime work-ages consequently offset, in part, the baby-bust's dampening impact on the supply of labor during the 1990s. After 2000, however, a segment of the baby-boomer population passes into the 55-years-and-older group and thus moves from a group with a high participation rate in the labor force to an age category with a much lower participation rate, causing the overall participation rate to decrease. The aging of female baby-boomers already has contributed to the seeming end of the decades-long rise in women's labor force participation, which "[o]n the basis of the current trend . . . reached its peak at 60 percent in 1999, and the trend will be at best flat in the future." The recent movement of older baby-boomers into the age range of low rates of supply to the labor force is shown in column 5 of Table 1 . The youngest members of the baby-boom cohort will have turned 55 years old by 2019, which could cause the workforce to grow more slowly between 2000 and 2019 than it did between 1980 and 2000. Indeed, the U.S. Bureau of Labor Statistics (BLS) projects that the decelerating rate of increase in the labor supply could continue through 2020. Although the labor force is projected to expand from 141 million people in 2000 to 165 million people in 2020, the gain will steadily dwindle—falling from 1.1% annually over the 2000-2010 period to 0.6% annually over the 2010-2015 period to 0.2% annually over the 2015-2020 period. Further contributing to the slowdown is the progress of the small baby-bust group into the age range with strong attachment to the labor force. The oldest members of the baby-bust generation turned 25 years of age in 1990; the youngest, in 2000. They will be among those replacing the entire baby-boom generation in 2020, when it will have aged out of the 25-to 54-year-old group. Despite the high rate of labor force participation for those in the prime work-ages shown in Figure 1 , the small number of baby-bust workers means that they will not be able to compensate for the large cohorts of baby boomers leaving the prime-aged group and moving into a group with much lower participation rates. The result is a decrease in the overall labor force participation rate and a slower rate of growth of the labor force. The slowdown in the supply of labor that employers have begun to encounter has led them to worry about how much harder it will become to hire replacements for baby-boomers as more of them reach the retirement phase of their lives during the coming decades. The ebbing of labor force growth could present more of a difficulty for some firms than others, depending on the age composition of their current workforces. For example, mature industries (e.g., steelmakers) in contrast with emerging industries (e.g., biotechnology) did much of their hiring many years ago; hence, baby-boomers probably comprise a larger share of the workforces of mature than emerging industries. Still other industries are known for having fairly young workforces (e.g., leisure and hospitality), and are less likely to have many jobs to fill as a result of retirements. (Instead, these other industries probably are more concerned about the relatively small additions to the youth labor force shown in Table 1 , which is affected by more than demographic trends. ) The first step in assessing the comparative hiring needs of employers associated with the retirement of the baby-boom generation was to calculate baby-boomers' share of employment, overall and by industry in 2005, utilizing Current Population Survey (CPS) data. The industries estimated to have employed a significantly above-average percentage of baby-boomers in 2005 (more than 42.1% of 41-to 59-year-olds) are considered the most prone to the effect of the group's withdrawal from the labor force. Within each of the "baby-boom dependent industries," CRS next estimated the baby-boomers' share of employment by occupation to determine the job categories most likely to develop vacancies due to retirements. (The size of the CPS sample limits the degree of detail by occupation within industries that could be estimated accurately.)