Weakness in the labor market doesn't adequately explain why fewer men are working or seeking jobs, according to a new paper published by economist Scott Winship and the Mercatus Center at George Mason University.
One big contributor is the rising number of men in their prime working years–aged 25 to 54–who are getting federal disability benefits, or report being disabled, and who are not actively searching for jobs, Mr. Winship concludes.
This suggests there is less slack in the labor market—such as people who could be drawn in off the sidelines—than many policy makers believe.
His research suggests there is a “much smaller segment of inactive men who want a job than people realize,” said Mr. Winship, who is also the director of a research initiative called the Social Capital Project for Sen. Mike Lee (R., Utah).
The fall in labor-force participation—the share of adults holding or seeking jobs—gained more attention last year when President Donald Trump questioned official unemployment statistics, which he said understated labor-market weakness because they didn't count as unemployed the millions of Americans who weren't actively looking for jobs.
Mr. Winship's research suggests this is true to a relatively limited extent, and not by nearly the magnitude that Mr. Trump and others suggest has been the case.
The research finds that adjusting the unemployment rate for the rising numbers of workers who say they want a job but who are not looking for one doesn't show significantly more labor slack right now than during past periods in which the overall unemployment rate dropped to the low levels seen over the past year.
Mr. Winship focuses on the share of prime-aged men who are not actively in the labor force–not holding or seeking jobs. This inactivity rate has increased to around 11.5% in 2016, from 4% in 1970 and 2% in 1930, he writes.
Could some of this rise in inactivity reflect men who are quitting the workforce because they're frustrated with job opportunities? Mr. Winship says yes, but that's only part of the picture.
Mr. Winship estimates that a quarter of inactive men wanted a job in 2014, and that just 25% of the rise in inactivity from 1969 to 2014 involved men who wanted a job.
Meanwhile, some 58% of prime-age inactive men report being disabled, and though this is a smaller share than in the past, inactivity overall has been on the rise, making this group of disabled and inactive men a significant cause of rising inactivity.
Wage data provides further evidence, he says, that the increase in inactivity has been driven primarily by men who say they don't want a job. He estimates median pay among all men is 23% to 31% higher than in 1967, and 10% higher for less-skilled workers, after adjusting for inflation.
Mr. Winship says disability programs and other private safety nets that may have made it possible for men who are not used to a very high standard of living to maintain that standard without working.
Other men are inactive in the labor force because they are students, homemakers, caregivers and retirees.
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