Consumer Morsel

Understanding the missing millions

Headshot of Anna Zhou

Anna Zhou

February 2023

Key takeaways

  • With the labor force participation rate currently one percentage point below February 2020 levels, we estimate that more than two million workers should have come back to the labor force but haven’t. Who are they and what has happened to them? We shed some light by analyzing data on Bank of America customers who stopped receiving paychecks during the pandemic.
  • BofA data corroborates the well-documented view that many of these “missing workers” are older and have likely taken early retirement, especially those with poor health. What is interesting is that prime-age workers (Millennials and Gen X) are exiting the labor force too, specifically lower-income workers in the restaurant and retail sectors.
  • What is keeping prime age workers away? Deteriorating health (both related and unrelated to COVID), caregiving responsibilities and migration to areas with lower cost of living are some of the potential explanations, in our view. Given these challenges are unlikely to be resolved in the near term, we think labor supply could face more persistent headwinds.

Read our full analysis for a more in-depth look at these trends.