The U.S.-Born labor force will shrink over the next decade
Report • By Josh Bivens • October 7, 2025
Introduction
It is often underrecognized how much population aging is currently reducing the growth rate of the U.S. labor force and will continue to pull it down in coming decades. The share of the population that is over the age of 65 (when labor force participation tends to take a steep fall on average) is rising rapidly. This share was 12.4% in 2007, 17.9% in 2024, and will hit 21.2% by 2035 (CBO 2025b). A recent EPI report (Gould et al. 2025) assessed trends in U.S. labor force participation and reviewed the research literature about their drivers and the potential effects of policy changes on these trends. One upshot of this research literature is that even the most ambitious policies to boost the labor force participation rate of the current U.S. workforce would not materially change these trends.
Any decline in labor force growth necessarily leads to a decline in the rate of growth of gross domestic product (GDP). GDP is the product of the number of hours worked in an economy multiplied by productivity (the average amount of output generated in an hour of work). If the number of work hours falls because the labor force shrinks, this essentially translates one-for-one into slower aggregate growth. Policymakers who do not want to see the pace of GDP growth shrink relative to the past history of U.S. growth really only have one option: allowing larger flows of immigration. Absent this, other policies to boost the U.S. labor force—while they might be wise along many margins—will not restore overall GDP growth to anywhere near its historic pace. In the rest of this policy brief, we lay out some of the larger trends in U.S. labor force growth and the implications of population aging for the future path of the labor force and economic growth.
U.S. labor force growth has slowed a lot in recent decades, and U.S.-Born labor force growth has slowed even more
Figure A shows the average annual growth rate of the overall labor force for a number of historical periods. We pick endpoints for these periods that correspond with business cycle peaks to make sure that sharp cyclical differences are not driving these trends. For two recent periods (2007–2019 and 2019–2024), we also show the average annual growth of just the U.S.-born labor force.
Between 1948 and 1979, labor force growth averaged 1.8% annually. From 1979 to 2007, this pace slowed, but only slightly, averaging 1.4% annually. However, in the two business cycles since 2007, labor force growth averaged just 0.5%–0.6% annual growth. For the two most recent business cycles, we have data on growth in the U.S.-born labor force, and this growth is just 0.3% on average.
https://www.epi.org/publication/the-u-s-born-labor-force-will-shrink-over-the-next-decade-achieving-historically-normal-gdp-growth-rates-will-be-impossible-unless-immigration-flows-are-sustained/