Growth of the Welfare State Has Fueled Declines in the Labor Force

A massive labor shortage continues to grip the nation and hold back our economic recovery. With countless pandemic and policy factors influencing the shortage, there’s a heated debate over what’s keeping so many workers out of the labor force. But a new study confirms that the growth of the welfare state is playing a massive role—and that this trend began long before the pandemic.

Published by experts on the Republican side of the Senate Joint Economic Committee, the analysis reports, “the U.S. has witnessed an unprecedented rise in disconnected prime-age workers over time.”

As shown in the graph below, the men’s labor force participation rate has fallen from more than 97 percent in 1955 to 89 percent prior to the pandemic, while the …

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