The Great Financial Crisis (GFC) has been blamed for many things over the past 10 years. Narratives have been created that appeal to our desire for a specific cause to what ails our economy, financial system and income growth rates. The cause for many of these observed effects can really only be known in hindsight, often after many years of hindsight.
There was a very interesting post on the New York Fed’s blog yesterday analyzing the labor force participation rate that uses data to explain the variation in the participation rate trend. Spoiler alert: the GFC isn’t the main culprit behind the lower participation rate we’ve observed in recent years.