Because of the softening of the New England economy in the past two years, the availability of labor has become a less pressing issue for New England businesses. However, projections of slower growth in the working-age population in the 1990s, attributable to changes in the age structure, hold out the possibility of tight labor markets and difficulties finding suitable workers in the future.
This article focuses on the fraction of the working-age population that chooses to work, called the participation rate, and its responsiveness to economic conditions. New England has had persistently high participation rates despite a relatively large population over age sixtyfive. Although regional variations in participation have been remarkably durable, the author finds that participation rates do tend to respond positively to favorable economic conditions and to some extent at least, a strong demand for labor creates its own supply.