Aging of the Indiana workforce.

• Author: Evans, Thea

The number of unemployed workers per job opening is dropping steadily as the U.S. economy continues to rebound from the Great Recession. In June 2015, there were 1.6 people looking for work for every job available-lower than the pre-recession December 2007 ratio of I.8. (1)

This positive economic trend may have some troubling implications for businesses. A 2015 survey revealed that one in three employers reported difficulty in filling open positions within the past year. (2) Factor in dropping labor participation rates (see Figure 1) and baby boomers nearing retirement, and one begins to understand the warnings of impending labor shortages.

Here we take a closer look at stable employment in Indiana and our development of an aging-out indicator to investigate whether there may be future labor shortages, and identify which industries and regions are the most vulnerable.

Methodology

Ideally, this analysis would use longitudinal data containing age, occupation, industry and county information on all individuals employed in Indiana to gain a comprehensive look at occupation, industry and regional shifts in labor force ages.

The unavailability of these data on an annual basis necessitated the use of national Quarterly Workforce Indicator (QWI) data, which measures the longitudinal work history-including age range, industry of employment and county-of individuals over time, as reported by their employers through the unemployment insurance system.

QWI data are compiled by the U.S. Census Bureau from Longitudinal Employer-Household Dynamics (LEHD) microdata, Unemployment Insurance (UI) earnings data, Quarterly Census of Employment and Wages (QCEW), Business Dynamics Statistics (BDS), the 2000 Census, Social Security administrative records, and individual federal tax returns.

QWI counts of stable employment were used at the North American Industry Classification Systems (NAICS) subsector level (three-digits) for two time periods: 2001-2003 and 2011-2013. Stable employment is defined as an individual being employed with the same employer for at least three consecutive quarters. The quarterly stable employment counts were aggregated to the economic growth region (EGR) level, and were then averaged by year to arrive at annual estimates.

Industry and EGR combinations with less than an average of 10 stable employees per year were suppressed in order to avoid magnifying small shifts in employee ages over time. An aging-out score was determined for all...