Elevator pitch
The global economy is full of progress paradoxes. Improvements in technology, reducing poverty, and increasing life expectancy coexist with persistent poverty in the poorest countries and increasing inequality and unhappiness in many wealthy ones. A key driver of the latter is the decline in the status and wages of low-skilled labor, with an increasing percentage of prime-aged men (and to a lesser extent women) simply dropping out of the labor force. The trend is starkest in the US, though frustration in this same cohort is also prevalent in Europe, and it is reflected in voting patterns in both contexts.
Key findings
Pros
There are surprising differences in the well-being of prime-aged males outside the labor force across regions, with some regions experiencing less severe issues than others.
While training can facilitate the re-integration of younger low-skilled workers, policies to address the future of those who are no longer employable will be more challenging.
Developing economies offer some potential lessons for creative solutions to enhance the productivity of those outside the labor force.
Cons
The trend of prime-aged males dropping out of the labor force has high economic, social, and political costs, particularly in rich countries.
The trend of prime-aged males dropping out of the labor force is likely to be exacerbated in the future, creating increased burdens for social insurance systems.
