Answer to Question #224678 in Macroeconomics for Wjdhhd

Question

Beginning in the late 1960s, the number of entrants to the labor market increased as the 

baby boom generation reached working age. In addition, labor force participation rates for 

women began to increase in the mid-1960s. What effect do you think these demographic 

factors had on the U.S. natural rate of unemployment at the time? What effect did they 

have on the natural rate of output?

Answer 1

The influx of baby boomers and women in the job market in the United States exerted considerable upward pressure on the unemployment rate during the 1960's ; maturing of this large population group helped lower the rate in 1980's and did so again in the 1990's. Baby boomers are remaining in workforce for longer and holding onto jobs that would be filled by the next generation.

The natural rate of out put increased due to injection of new blood into the economy of US in 1960's.This was characterized by availability of labor.