:^t. ^;J>^ THE F] H ^XATE UNIVERSITY LIBKittY DOCUMENTS SECTION Economic I Redevelopment 'ESEA^CM U.S. DEPARTMENT OF COMMERCE Redevelopment Population, labor force & unemployment in CHRONICALLY DEPRESSED AREAS Library of Congress Catalog Card Number 64-60085. Uievetopment If; ,",,rife ^k.'f^'i. %:V- S If ion, labor force & unemployment in CHRONICALLY DEPRESSED AREAS U.S. DEPARTMENT Qp COMMERCE Luther H. Hodges, Sectary AREA RE^iVlLOPMENT ADMINISTRATION Wilfe^ L, Bag, JSr, Administrator October j IMk For §ale by the Superintendent of Documents, U.S. Government Printing Office WaSklfigtOfM B*€„ 20402 - Price 20 cents Foreword JL his is one of a series of papers devoid to research on area redevelopment conducted under the economic aii4 social re- search program of the Economic Analysis Division, Office of Planning and Research, by authority of Section %7 of the Area Redevelopment Act of 1961 (PL 87-27), This publication is directed at State and local development groups, social scientists, and regional research groups. It joins the series of useful infor- mational and educational materials published by ARA. This paper is a product of the internal research program of the Economic Analysis Division. The paper was prepared by Martin Segal, Professor of Economics at Dartmouth College and consultant to ARA, and by Richard B. Freeman, formerly of ARA, now at Harvard University. The conclusions of this study are those of the authors. William L. Batt, Jr., Administrator Area Redevelopment Administration Contents Introduction 4 Nature of study 4 Summary of major findings and their implications 5 Scope and method of study 7 Nature of data used 7 Selection of areas . 8 Selection of "control" areas 9 Analysis of population, labor force participation, and the structure of unemployment 11 Population 11 Age distribution ,___ 11 Changes, 1950-1960 1 13 Migration 15 Labor force participation 17 Factors influencing labor force participation 17 Male participation 19 Female participation 25 Structure of unemployment 30 Unemployment, by sex and age 31 Unemployment, by occupation 33 Policy implications 38 Appendices 40 Supplementary tables 40 Further lines of research „ 46 Introduction Nature of S'udy This paper examines selected aspects of human resources in several "chronically depressed areas," areas which for about a decade have been characterized by high rates of unemployment. 1 Specifically, the paper focuses on the composition of population and the rates of labor force participation in these areas. In addition, it contains a brief examination of some key characteristics of the structure of unemployment in the depressed areas. The final section considers some implications of the findings for policy considerations by the Area Redevelopment Admin- istration. The primary analysis in the paper is a cross-sectional study of the aforementioned aspects of human resources in the depressed areas in the census year 1960. This analysis is supplemented by an examination of data pertaining to trends in the structure of population and labor force. Because people adjust to economic conditions, it is reasonable to assume that persistent, heavy unemployment in an area has an effect on the area's human resources; and that ultimately this effect will be reflected in the composition of population, labor force participation, and the occupational and age structure of the unemployed. The influence of chronic labor surplus on these characteristics operates, for the most part, through the decisions of individuals to migrate, to enter the labor force, or to withdraw from it. Since the influence depends on these decisions, it can be expected to vary among different age, sex, and occu- pational groups, who respond dissimilarly to the same stimulus of unemployment. 1 In this paper the terms 'chronically depressed areas," "areas of chronic unemployment," "chronic labor surplus areas," etc. are used interchangeably to describe the same phenomenon. The responses of individuals to heavy unemployment are likely to be particularly strong in those areas where heavy unemployment is per- sistent. For one thing, it takes time for people to recognize and to adjust to changed environmental conditions. The areas considered in this study, unlike cyclically depressed areas, have suffered from an imbal- ance between labor supply and demand for a sufficient number of years to enable people to have adjusted to the adverse economic circumstances. Secondly, given a high rate of unemployment, the strength of the stimu- lus to change habitation or to change labor force participation behavior may be expected to increase with the duration and continuity of the labor surplus. In areas that undergo only short-run cyclical unemploy- ment the recurring periods of prosperity bring about favorable expec- tations of the future. These expectations would naturally limit the strength of labor adjustment through migration or changed labor force participation behavior. Such recurring optimistic expectations are pre- sumably largely ineffective in the chronically depressed areas. These considerations provide the rationale for our analysis. A cross- sectional analysis of the population, the labor force participation and the structure of unemployment is likely to reveal significant differences between chronically depressed areas and areas that have not experienced prolonged periods of labor surplus. Main Findings and Implications 1. Chronic unemployment has had a distinct impact on both the age structure and the size of population in the depressed areas. In 1960 the depressed areas had an older population than the urban United States. The relative aging of the population was taking place to a large extent during the decade of chronic unemployment — apparently because of out-migration of younger people. The population of the areas had also grown at rates much lower than in other urban areas. 2. Men in the depressed areas had lower rates of labor force participa- tion than men in other urban areas in 1960. The differences were par- ticularly large among the very young and among those aged 60 and above. Statistically significant differences between the depressed areas and the urban United States also existed in all the age groups of men 40 years old and above. 3. The 1960 rate of female labor force participation in the depressed areas were influenced mainly by the industrial composition of individual areas. The rates were relatively high in those areas where the industrial composition provided relatively many opportunities for female employ- ment. The participation rates were relatively low where the local indus- tries offered relatively few job opportunities for women. 4. In the depressed areas in 1960, men accounted for a higher propor- tion of the unemployed than in the rest of the country. Moreover, a relatively larger proportion of the unemployed males was concentrated in the middle age bracket. At the same time, the greatest difference in unemployed rates between the depressed areas and the rest of the coun- try existed among the young men aged 20-24. 5. The difference in the male unemployment rate between the de- pressed areas and the rest of the country appears to be mainly a result of the relatively high unemployment rates of the less skilled workers in the areas rather than the result of the occupational composition of the areas. However, in the case of female unemployment, the relatively high rate may be "accounted for" by the occupational composition of the labor force, and, specifically, by the high proportion of "operatives" among the female workers of the depressed areas. 6. The main implications of the study follow from the finding that labor force participation in the depressed areas is likely to be affected significantly by both the number and type of job opportunities. This implies that any development planning pertaining to depressed areas should take into account the possibility of an expansion of the local labor force as a result of creation of new jobs. In many cases this also means that creation of new jobs need not necessarily result in a decrease of unemployment rates among local workers. Scope & Method of Study Nature of the Data Used In spite of wide interest in chronically depressed areas, there appears to be only one recent study that has concerned itself primarily with the subject of this paper. This is a Study prepared by the Bureau of Labor Statistics for the Joint Economic Committee. 2 The major differences between the results of this paper and those of the BLS report reflect the fact that the two studies examine different types of data. The BLS study based its analysis on the data tabulated from the Momhly Report on the Labor Force (MRLF) for April and May 1959. Although the MRLF sample' provides reliable estimates for the country as a whole, it does not furnish statistically reliable data for individual areas. In order to make use of this sample the BLS study had to group data for 115 of the 145 major labor market areas into three broad classes. The criterion for grouping areas was the rate of unemployment from January 1957 to May 1959. The three classes of areas were then com- pared with respect to the characteristics of population, labor force, and unemployment. The major limitation of the above procedure was that the groups of areas with heaviest unemployment (designated as Group 3 areas) com- bined data for areas suffering from cyclical unemployment with those pertaining to chronically depressed areas. As a result, the impact of chronic unemployment, as distinct from temporary unemployment, may not be revealed clearly in the BLS study, 3 2 Joint Committee Print, Study Paper No. 23, The Structure of Unemployment in Areas of Sub- stantial Labor Surplus, Washington: U.S. Government Printing Office, 1960. 'For the purpose of examining labor force participation the MRLF sample was actually viewed as large enough to permit the separation of data for the chronically depressed areas from data tor the cyclically depressed areas. However, in the examination of population and structure of unemployment the two types of areas were combined. In general, because of the small sample inappropriate to individual area studies, and the necessary combining of cyclically and chronically depressed areas, the BLS study should be viewed, as its authors indicate as "an experiment rather tnan ... a definitive work in the field of depressed areas." (Study Paper No. 23, op. cit., p. 2). This paper uses statistics published in the U. S. Census of Population for 1960 and 1950. Census data are more suitable for the analysis of chronically depressed areas than are the data used by the BLS. First, the Census data contains statistically reliable information for individual areas. Thus there is no Itvss of information because of excessive aggrega- tion. Moreover, the availability of data for individual areas makes possible an application of tests of statistical significance, Second, the census data permit comparisons of relevant variables with the informa- tion contained in the 1950 census. As will be S6en> ill tht analysis of some aspects of population and labor force participation such compari- sons provide useful insights. Selection of Areas In selecting the areas that have had relatively high unemployment for a long and continuous stretch of time prior to 1960, we used the dassi- fications of the Bureau of Employment Security (BES) , The BES has been classifying major labor markets according to the relative adequacy of labor supply bimonthly since 1950. Since its inception, the BES sys- tem of classifying has changed slightly. Nevertheless, it was still possible to compare the relative unemployment status of the areas during the decade. The fourteen areas chosen as depressed areas in this paper are those labor market areas that had "relatively substantial unemployment" in 1960 and throughout most of the 1950-60 decade. This means that the areas were in the D, E, or F categories (according to BES terminology) in 1960, and in these or equivalent categories in earlier years. 4 The selected areas, together with the year in which they were first designated as "substantial unemployment" localities are listed below. Unless otherwise noted, the areas remained Continuously in the D, E, or F categories (or their equivalents) from the time they were first so designated until and ineluding> April I960. 5 All of the areas — with the exception of Providence — are medium-sized metropolitan areas. 6 They are all in the Eastern section of the U.S. — primarily the New England and Middle Atlantic Regions. As may be 4 The unemployment rates for these categories are as follows: D-6-8.9%, E— 9-1 1.9%, F-12+ %- See "Explanation of Area Classifications" in Area Labor Market Trends, U.S. Department of Labor, Bureau of Employment Security. 5 It should be noted at this point that -the BES estimates of unemployment differ from those indicated for the census year by the Census' of Population. To some extent this is a result of a difference in the concepts of unemployment and the method of estimating it. As Ullman pointed out recently, there is a definite regional pattern in the Census and BES differences, with the BES unemployment rates being higher in the Northeast and other slow growing regions, and 'ower in the. fast growing West. The rates of unemployment indicated (for April 1960) for the selected fourteen areas by the Census of Population were lower than those given by the BES. In fact, according to the census, three of these areas had in April 1960 unemployment rates lower than the national average. While this difference between the two estimates is disconcerting, this paper can do little more than make note of the problem. See Joseph C. Ullman, "How Accurate Are the Estimates of State and Local Unemployment," Industrial and Labor Relations Revtexv (April 1963) for a discussion of this issue. 6 All of the fourteen areas are classified by the Census as Standard Metropolitan Statistical Areas. expected, they differ from each other in many respects — economic history before the 1950-60 decade, industrial mix, ethic composition, etc. The characteristic common to all of them is relatively severe unemployment in the 1950's. Fourteen Chronically Depressed Areas Area Altoona, Pennsylvania Atlantic City, New Jersey Charleston, West Virginia Durham, North Carolina Erie, Pennsylvania Evansville, Indiana Fall River, Massachusetts Johnstown, Pennsylvania Lawrence, Massachusetts Lowell, Massachusetts Providence, Rhode Island Scranton, Pennsylvania Terre Haute, Indiana Wilkes Barre-Hazleton, Pennsylvania Month and Year of First Designation As Substantial Unemployment Area December 1951 December 1951 July 1953 September 1951 September 1953 (with a one-year excep- tion) May 1953 (with an 8-month exception) November 1951 (with two exceptions: one for 12 months, the other for 14. In both cases area was classified in C (3-5.9%) unemployment group) September 1952 January 1950 January 1950 (with a one-month exception in 1951) January 1950 January 1950 November 1950 January 1950 Selection of "Control" Areas In order to analyze the impact of chronic unemployment on human resources it is necessary to compare specific characteristics of the popu- lation or labor force of the depressed areas with the corresponding characteristics in non-depressed areas, areas that may be said to play the role of "controls" in the analysis. Since the fourteen selected areas differ both among themselves and from any other area in many socio- economic characteristics, it is impossible to choose an "ideal" control — i.e., an area that differs from the selected localities only in its lack of chronic labor surplus. From a pragmatic point of view the most generally applicable control appeared to be "urban United States." 7 This control is used through- 7 For the definition of the concept of "urban United States" see U.S. Census of Population, 1960: "General Social and Economic Characteristics," Final Report, P. C. (1)—1C, U.S. Government Printing Office, Washington, D.C., 1962. out the paper — in the discussions of population, labor force, and the structure of unemployment in the depressed areas. In the more detailed analysis of the labor force participation we use this control along with a somewhat more refined control concept — urban United States, adjusted for racial mix of the depressed areas. s It will be noted, however, that any comparison of the depressed areas with the adjusted urban U.S. gave essentially the same results as an equivalent comparison with urban U.S., unadjusted for racial composition. Two other controls are also used in the discussion. In the analysis of population, comparisons are made with the data for the United States as a whole. Whenever possible, we use for comparison purposes the data indicating relevant averages for all Standard Metropolitan Statistical Areas. Unfortunately, the information pertaining to SMSAs is tabulated by the Census for only a limited number of variables dis- cussed in this paper. 9 8 The method of adjusting for racial mix is a simple one. For each of the fourteen areas we constructed a weighted average of urban U.S. white and non-white data (on labor force participa- tion rates). The weights were the proportions of the population accounted for by whites and non-whites in the individual depressed area. 9 Since most of our depressed areas are located in the Eastern section of the U.S., we also made comparisons using a specially constructed regional control. The results of these comparisons corroborated the findings presented in the text. For simplicity of exposition we have omitted the discussion of this regional control. 10 Analysis of Population, Labor Force Participation, & the Structure of Unemployment In this section we discuss the empirical findings of the study. The sec tion is subdivided into three parts. The first part is concerned with the population of the chronically depressed areas; the second examines the pattern of labor force participation; the third deals with some key aspects of the structure of unemployment. POPULATION It is reasonable to expect that the population of the chronically de- pressed areas would tend to be older than in the control areas. As is well known, young people are characterized by a relatively high geo- graphical mobility. Accordingly, under the impact of high and prolonged unemployment young people are likely to leave the depressed areas. 10 Age Distribution A comparison of the age distribution of population in the depressed areas with that of population in the controls confirms the above expec- tation. 11 For instance, when compared with the U.S. as a whole, the depressed areas had in April 1960 a higher proportion of individuals of age 35 years or older. In the U.S., 42.7 percent of the population was 35 years or older; in the depressed areas, the percent was 46.6. A more appropriate comparison of population can be obtained by using the urban U.S. as the control (See Table 1) . Here again the tendency is for the chronically depressed areas to have an older popula- tion. For example, in terms of percentage distribution, the proportion of men 65 years or older in depressed areas was 1.3 percentage points higher than in the urban U.S. 12 Among women, the difference in per- 10 Analogously any in-migrants to the areas would be expected to be motivated largely by non- economic reasons and would not be expected to include many "economically active" young people. 11 For a similar finding see Study Paper No. 23, op. cit., p. 15. 12 Considering the fact that this age group constitutes less than 9% of the male population in urban U.S., this difference is sizeable indeed. 11 centage points was the same. Conversely for the young, the 14 SMSAs are underpopulated — especially among the 20-34 age group. Males in Table 1 Percentage Distribution of the Population, by Age and Sex, April 1960 Percentage Distribution a 14 Chronically Age and Sex Depressed Areas Urban U.S. U.S. Males 48.2 b 48.5 b 49.2 b Less than 14 29.1 30.1 30.6 14-19 8.9 8.5 9.2 20-24 5.2 6.0 6.0 25-29 5.3 6.3 6.0 30-34 6.1 6.9 6.6 35-39 7.1 7.2 6.9 40-44 6.8 6.6 6.4 45-54 12.3 11.6 11.5 55-59 5.2 4.8 4.7 60-64 4.2 3.9 3.8 65-69 3.8 3.2 3.3 70-74 2.9 2.4 2.4 75 + 2.8 2.5 2.6 Females 51.8 b 51.5 b 50.8 b Less than 14 26.1 27.4 28.6 14-19 8.4 8.3 8.8 20-24 5.4 6.3 6.1 25-29 5.4 6.2 6.1 30-34 6.6 6.9 6.7 35-39 7.2 7.3 7.0 40-44 7.0 6.7 6.5 45-54 12.8 11.8 11.5 55-59 5.4 5.0 4.9 60-64 4.7 4.2 4.1 65-69 4.2 3.7 3.6 70-74 3.3 2.9 2.8 75 + 3.8 3.4 3.4 a The percentage figures for a specific age group refer to the proportion that age group is of the sex group to which it belongs, i.e., the percentage it is of total males or females. b This percentage figure represents the proportion of the total population accounted for by males or females. Source: U.S. Bureau of Census. U.S. Census of Population: 1960 12 this age category accounted for 19.2% of the male population in the urban U.S. but for only 16.6% in the chronically depressed areas. The difference was slightly smaller for females aged 20 to 34. Taken individually most of the fourteen areas conformed to the age distribution of the depressed areas as a whole. The only exceptions were Durham and Charleston. (The data for Durham show a relatively large number of young people because the Census includes college students — in this case Duke students — as residents of the SMSA.) Population Change, 1950-1960 We turn now to the changes in the population of the selected areas during the 1950-1960 decade. Table 2 shows that the impact of pro- longed unemployment was also reflected in the rates of growth of popu- Table 2 Population Changes in Chronically Depressed Areas Population Percent Change April, 1960 1950-1960 U.S. 179,323,175 18.5 Urban U.S. 125,268,750 29.3 All SMS As 112,885,178 26.4 All Chronically Depressed Areas 3,383,646 3.0 Individual Chronically Depressed Areas (in order of percent increase) Atlantic City, New Jersey 160,880 21.5 Lowell, Massachusetts 157,982 16.2 Erie, Pennsylvania 250,682 14.3 Durham, North Carolina 111,995 10.2 Providence-Pawtucket, Rhode Island- Massachusetts 816,148 7.4 Charleston, West Virginia 252,925 5.5 Evansville, Indiana 199,313 4.3 Terre Haute, Indiana 108,458 3.1 Lawrence-Haverhill, Massachusetts, New Hampshire - 187,601 2.8 Fall River, Massachusetts 138,156 0.6 Altoona, Pennsylvania 137,270 -1.6 Johnston, Pennsylvania 280,733 -3.6 Scranton, Pennsylvania 234,531 -8.9 Wilkes-Barre-Hazleton, Pennsylvania 346,972 I960. — 11.5 Source: U.S. Bureau of Census, U.S. Census of Population: \ It lation. Taken as a group, the depressed areas experienced population growth at a rate much below that of the U.S., urban U.S. or all SMSAs; and the rate of population growth of each individual depressed area was below that of the urban U.S. or of all SMSAs. The four areas in Penn- sylvania — Altoona, Johnstown, Scranton and Wilkes Barre-Hazelton — actually experienced during a population decline the 1950-60 decade. During the same period the population of Pennsylvania as a whok grew by 7.8 percent. An examination of the changes in the age structure of the population of the selected areas in the 1950-60 period indicates that the existing relative imbalance between the young and the old was either created or Table 3 Trend in the Age Distribution of the Population of Depressed Areas Relative to the Trend in Urban U.S. (1950-60)* A B Number of areas with relative Number of areas with relative decline in the proportion of increase in the proportion of the age group in the area's the age group in the area's population (relative to urban population (relative to urban Age Group U.S.) U.S.) 1 3 2 2 10 11 11 11 9 11 13 9 12 * For reasons indicated in footnote 12, only thirteen of the areas are compared in this table. Source: U.S. Bureau of Census, Census of Population: 1950; Census of Population: 1960. Note: This table essentially compares the 1950-1960 changes of the proportion of each age group in the depressed areas' population with the change in the proportion of the same age group in the population of the urban U.S. Column A indicates either the number of depressed areas in which a given age group increased its proportion of population by fewer percentage points than the same group in urban U.S.; or the number of areas in which a given age group decreased its proportion of population by more percentage points than the same group in urban U.S. Column B indicates either the number of depressed areas in which a given age group increased its proportion of population by more percentage points than the same group in urban U.S.; or the number of areas in which a given age group decreased its proportion of population by fewer points than the same group in urban U.S. 14 Less than 14 12 14-19 10 20-24 11 25-29 11 30-34 3 35-39 2 40-44 2 45-54 2 55-59 4 60-64 2 65-69 70-74 4 75 + 1 increased during the years of chronic unemployment. 13 The 1950-60 trend toward relatively older population in the depressed areas is indi- cated by Table 3. As explained in the accompanying note, this table compares the change in the age distribution of the population of the depressed areas with the change in the age distribution of population in the urban U. S. The data in Table 3 show a tendency for the age groups containing young people (less than 30 years old) to decline as a propor- tion of population in most of the depressed areas as compared to the change in the proportion of young people in the population of the urban U.S. At the same time, the relative proportion of older peo- ple — particularly those 65 years old and older — increased in the de- pressed areas. Again this change is in relation to the equivalent change in the urban U.S. The trend toward relatively older population in the depressed areas is statistically significant according to the binomial test at the 5% level. 14 Migration Both the age distribution of the depressed areas' population and its rela- tively slow rate of growth may be explained to a large extent by eco- nomically motivated migration. The relevant — and available — data on this mode of response to persistent unemployment are presented in Table 4. Two aspects of migration should be noted. First, with the exception of Atlantic City, all the areas experienced net out-migration during the 1950-60 decade. Second, a comparison of the 1950-60 migration rates with those in the preceding decade shows a distinct change toward increased out-migration (See Column C of Table 4) . Summary All told, the preceding examination of the relevant data indicates that chronic unemployment has had a distinct impact on both the age struc- ture and the size of population in the depressed areas. In 1960, the areas had an older population than the urban U.S. This relative aging of the population was taking place, to a large extent, during the decade of chronic unemployment — apparently because of the out-migration of younger people. The population of the areas has also grown at rates 13 In the examination of the changes in the age structure of the depressed areas we had to omit the Lawrence-Haverhill area. Changes in the definition of this SMSA made impossible the inter-censal comparison. The definition of the Evansville SMSA was also changed for 1950 to 1960. However the availability of county data permitted a necessary adjustment of the data for 1950. 14 In this context the trend is measured by the number of areas where the proportion of 65 year olds or older in the population increased in relation to changes in urban U.S.; and where the proportion of less than 30 year olds decreased in relation to urban U.S. The trend in the 65 years and older group was actually significant at 1% level. The binomial test used in this and other comparisons is a non-parametric test testing whether a sample has a specific distribution. 15 Table 4 Net Total Migration From and To Chronically Depressed A re as a 1950-1960 1940-1950 Change in Migration Rate (The 1950-60 Number Rate Number Rate rate mi?ius the Area of people 1940-50 rate) Altoona — 16,000 — 11.5 -14,000 - 9.7 — 1.8 Atlantic City 19,000 14.2 5,000 4.0 10.2 Charleston — 34,000 -14.0 - 1,000 - 0.3 -13.7 Durham — 7,000 - 6.5 3,000 4.1 -10.6 Erie — 6,000 - 2.6 15,000 8.5 -11.1 Evansville -23,000 -11.8 14,000 8.8 -20.6 Johnstown —49,000 — 16.8 -43,000 -14.4 - 2.4 Scranton -39,000 -15.2 —57,000 -17.1 3.9 Terre Haute - 7,000 - 6.6 - 3,000 - 3.1 - 3.5 Wilkes-Barre- Hazleton —69,000 -17.6 -77,000 -17.6 — Fall River a c - 4.7 c - 1.8 - 2.9 Providence- Pawtucket a c - 5.9 c - 1.5 - 3.4 :i Because New England SMSAs are defined in terms of towns rather than counties, not all of the basic data needed to estimate migration from these SMSAs is readily available. Thus the Census has not estimated net migration for Fall River, Cowell, Lawrence-Haverhill, or Providence. The Census has suggested, however, that an approximation of migration from these areas can be obtained from the estimates of migration for the nearest equivalent State Economic Area (SEA). Massachusetts SEA E is the nearest equivalent SEA for Fall River. The data in the table pertain- ing to migration from Fall River, are, therefore, actually data for Massachusetts SEA E. Similarly, the data for Providence- Pawtucket are the data for the Rhode Island State Economic Area which is most equivalent to it, namely Rhode Island SEA A. Because the SEA suggested by the Census as the one which best approximates both Lawrence-Haverhill and Fall River includes Boston, whose large population dominates the area, we have not included Lawrence-Haverhill and Fall River in the table. b The net migration rate for an area is the ratio of net migrants in the decade to the area's population in the beginning of the decade. The sign, ( _)_ ) or ( — ), refers to in-migration and out- migration respectively. e Data on the amount of migration for Fall River and Providence-Pawtucket are not presented in this table because of differences in the size of population of these SMSAs and the State Economic- Area most equivalent to them. This difference in population size makes the numerical estimates of migration for these areas not comparable to those for the other depressed areas. Source: U.S. Bureau of the Census; Current Population Reports, Components of Population Change, 1950-60, For Counties, Standard Metropolitan Areas, State Economic Areas, and Economic Subregions, Series P-23, No. 7. much lower than in other urban areas. Again this seems to be attrib- utable largely to net out-migration during the 1950-60 decade. From the viewpoint of the country as a whole, the above phenomena may be said to reflect the adjustment of human resources to differing economic opportunities. Nevertheless it is obvious that the adjustment has not operated with sufficient force to eliminate, in fact, the centers of substantial unemployment represented by the selected fourteen areas. Whether, interpreted in this sense, the adjustment would have been 16 more effective if the country as a whole experienced higher aggregate demand during the past decade is a question that cannot be considered here. Labor Force Participation Factors influencing labor force participation. Participation in the labor force is a work variable directly controlled by individuals. Changing participation behavior is, therefore, an important way in which an individual adjusts to adverse economic conditions. Since participation depends on human decisions, it is affected by numer- ous economic, social, and demographic factors. Among these factors, chronic unemployment may be viewed as one of the more important environmental influences. Nevertheless, the total nature of this influence is by no means obvious. On the basis of past studies and a priori analysis one can expect that chronic depression may create pressures leading to divergent results in labor force participation behavior. (a) One such pressure results from low family income. As Douglas and Long indicated, 15 there is an inverse relation between low incomes and labor force particfpation of both males and females. Since house- holds in depressed areas have median family incomes below those of the urban U.S. or the nondepressed SMSAs, this factor should presumably lead to relatively high labor force participation. (b) High rates of unemployment in the selected areas reflect, of course, relative inadequacy of demand for labor. This lack of job oppor- tunities, in turn, may be expected to discourage to some extent participa- tion in the labor force among both men and women. (c) Unemployment among the chief breadwinners of the family may also have a positive effect on labor force participation. The reason is that other members of the households are impelled to enter the labor market in order to maintain or supplement family income. This influ- ence should be particularly strong among women, and perhaps also among the very young and the very old males. It is this kind of reasoning that underlies the so called "additional worker" hypothesis. Quite apart from the preceding influences which reflect the chronic depression, there is an additional factor affecting labor force behavior. For any given level of labor demand, labor force participation of women is likely to be influenced by the nature of the jobs available. This in turn depends on the industrial composition of the labor market area. Some industries, because of technological and other factors, rely to a very limited extent on female labor. Areas dominated by these types of 15 Clarence D. Long, The Labor Force Under Changing Income and Employment, Princeton, 1958; Paul H. Douglas, The Theory of Wages, New York, 1934. 17 industries (for example, the railroad industry in Altoona) can be ex- pected to have low labor force participation among women. The reverse is likely to be true in areas with large textile or apparel industries. The four influences discussed above may lead to a complex pattern of labor force behavior. It is reasonable to expect that the relative strength of the individual factors will differ between different age and sex groups in the depressed areas. Among the males, for instance, one would expect that the impact of factor (b) — overall scarcity of jobs — would be greatest among the very young and the very old age groups. The men in these groups face rela- tively less social or economic pressure to participate in the labor force than men in the other age groups. For younger men an alternative is to stay in school. Older men may prefer early retirement to a fruitless search for jobs or to shifts to unfamiliar or low paid occupations. Men in the 20-64 age bracket normally face strong economic and social pressures to participate in the labor force. In view of the relatively low household incomes in the depressed areas, one could expect that the shortage of available jobs would have little negative influence on the rate of labor force participation in this broad age group. Still, the areas selected for our study have experienced unemployment for many years. This condition may discourage some men, particularly those in the older end of the age spectrum, from seeking work. The pattern of female labor force participation in the depressed areas is likely to be a result of a more complex combination of influ- ences. As in the case of men, the overall lack of employment oppor- tunities may lead to a reduction of participation rates among both the very young and the older women. On the other hand, women in the 20-60 age bracket may be primarily motivated in their labor force par- ticipation decisions by low family incomes and by the fact that male heads of households are without jobs. It is also possible that the effect of these factors in individual areas may be overshadowed by the nature of the area's industrial composition — i.e., by whether the area's industries provide relatively many or few jobs that can, in fact, be held by women. These a priori considerations do not provide a clear-cut answer to the question of labor force participation, even among specific age groups of women in the depressed areas. It is apparent from the above that an analysis based on published census data will not supply either a complete or a detailed picture of the pattern of labor participation in the fourteen selected areas. Some of the factors discussed may interact in a complex manner, one that can- not be deduced easily from the available statistical material; other fac- tors, for which data are not available, may contribute an important influence. Nevertheless, in spite of the limitations inherent in the nature of the present study, it is believed that the following discussion throws 18 considerable light on the pattern of labor force participation in the areas characterized by chronic unemployment. Male Participation In 1960 the pattern of male labor force participation in chronically depressed areas differed considerably from the patterns in the control areas. The tendency was for low participation among all age groups relative to the control areas. This difference in male participation is illustrated in Table 5, which presents overall male participation rates for the urban U.S. and each of the fourteen areas. In computing the labor force participation rates shown in this table, the age distribution of the males in each of the depressed areas has been standardized to conform to the age distribution of the urban U.S. As a result, the differences in overall participation rates reflect only nondemographic factors. As can be seen in Table 5, with the exception of Lawrence and Erie, the depressed areas have a lower overall male participation rate than Table 5 Overall Male Participation Rates, Standardized by the Age Distribution of Urban U.S., April 1960 a Participation Area Rate Urban U.S. 78.7 Altoona 75.7 Atlantic City 72.2 Charleston 75.1 Durham 73.1 Erie 79.2 Evansville 78.3 Fall River 78.3 Johnstown 73.9 Lawrence 80.8 Lowell 77.7 Providence 78.2 Scranton 73.5 Terre Haute 73.6 Wilkes-Barre - Hazleton 71.3 a The "overall participation rate, standardized by the age distribution of Urban U.S." for an individual area is a weighted average of the participation rates of specific age groups in the area. The weights are the proportions of the male population 14 years or older accounted for by the specific age groups in urban U.S. Source: U.S. Bureau of Census. U.S. Census of Population: 1960. 19 the control areas. This difference is statistically significant at the 1% level according to both the binomial and the t test. More insight into the pattern of male participation in the depressed areas is obtained by examining participation rates among various age groups. Relatively low participation rates were most noticeable among the very young and the older workers. Young Workers. For young males, aged 14-19, the difference between the proportions of population participating in the labor force in the chronically depressed areas and in the control areas was indeed substan- tial. This can be seen in Table 6 which indicates the differences (in percentage points) in labor force participation between individual de- pressed areas and urban United States, adjusted for racial composition. (The actual labor force participation rates for each depressed area, tabu- lated by sex and age, are shown in Table A-l in Appendix A.) In the fourteen depressed areas the average rate of male participation in the 14-19 age group was 32.7%. This was 6 percentage points below the rate of the urban U.S. (adjusted) . All areas but two — Lawrence-Haverhill and Lowell — had a smaller proportion of young men in the labor force than the control did. According to both the binominal and the t test, this difference was significant at the 1% level. A similar result is ob- tained when the comparison is made with the urban U.S., not adjusted for racial composition. These results corroborate the finding of the BLS study. That study, although not able to judge the statistical significance of the difference in the participation rates, also found that the areas of large unemploy- ment have a relatively low rate of participation among the very young males. The 20-59 Years Age Bracket. As implied by the previous discussion, the seven age groups in this broad bracket (20-24, 25-29, 30-34, 35-39, 40-44, 45-54, 55-59) would not be expected to show significant differences in labor force participation between the depressed areas and the con- trols. Surprisingly enough, however, this expectation has not been en- tirely confirmed by the data (See Table 6) . For the three oldest age groups in the bracket, the 40-44, 45-54, and 55-59 groups, participation in the depressed areas was significantly lower than in the urban United States (adjusted) . 1G Although the mean differences in participation for these age groups were relatively small, the consistency of the pattern resulted in statistical significance according to the t test and the bino- mial test. 17 It is of some interest to note that the mean difference between par- ticipation rates in the depressed areas and in the control increases with 10 This result also holds for a comparison with unadjusted urban U.S. 17 For all three age groups the differences between the depressed areas and the control were significant at the 1% level. 20 \o C/3 •111 tj 1/3 ^ b s ~*> ^" -r^ 8 53 *■ s ^ c 9 s s o • ~ S> *> N 111- 8f) ^ CO ~H ^H © t£5 00 I 00 to to CO °i ^ n O eo tF I I I tO i-i C7> q cn tH iri i-J t^ I I I CM m ■-* xn iq oq t-H till _4 TjH cm oi ©n C5 M^ 00 I I I I I I I I I I I I O) l> "H CM in OS i>- m © xri mi cm oo on CM i-5 I I I I as rtj "^ oi t^ rj^ tO --5 I I I I I I I I I ! r-J 0O © 0O >-H ^' m 00 t^ f-J © iri m 00 f-h on III Ml °5 ""3 ^ © cm ©ri -* 1 © rtj ^ P-< TjH t> © © od to m i 7 CM t-; Tt? od © cri I I I I III I I I I 5 I I I I I M CM 7~ CM SO I © Tf 00 CM i-H © I I i-i »n w p-5 © >-5 I oo on *n ©■©'©' to in in on -h' cm I I •00 t-~ m p4 © -H I I to on Tt" CM i-H O oo ©. © tH I I xn © © en t* oq © on I I I in h n in in h —I © © i-h © © I I © CM I I I m © CM t^ m oo on on I I on © < on rj* | I oi in I I M^ocMWHNNqooinxin - '©'iri~^^t<©cM^^H^cM"'^ I I I I I I Tfii^in0^o^tqeni>.cMinononcMCvl on <— i © CMonon>-HT^©— I cm cm -*' I I I I onoo©°0 T t . T ^ T:,H . i> w <« cc oj cm odtdonC^tdcM©onoo^©i— loooo I I I I I I I I I I U c 3 cu as J2 cs *5 ,S rt 3 13 ^3 3 '5 > ps > cu ^ < < Qh O « » 518 a 3S ■B§s 55 s 1 a f g OJS ^J2 M S W 3 <«_UJ SgQ-S|° ft o ^ x e.c-B^ 2 -S tUfJlJ a ape 2 w a. • <£ •rru age. Thus, the difference was higher in the 45-54 group than in the 40-44 group and highest in the oldest group (55-59) . In the other age groups contained in this bracket participation was also lower, on the average, in the depressed areas than in the control. However, as can be seen in Table 6, the pattern of differences is not as consistent as in the older age groups. Indeed the observed differences were not statistically significant. 21 Older Men. The data for participation of older males — those aged 60 and above — indicate a definite tendency for these men to withdraw from the labor market to a greater extent in the depressed areas than in the urban U.S. (both adjusted and unadjusted for racial mix) . We consider first the males 65 years and older. Additional data for this group are presented in Table 7. (The average labor force par- ticipation rate for all SMSAs is computed by the Census only for this particular age grouping.) The average participation rate in the de- pressed areas is noticeably lower than in any of the three controls listed in Table 7. When tested both by the binomial and the t test, the differ- ence between participation rates in the depressed areas and the control areas turns out to be significant at the 1% level. Table 7 Labor Force Participation Rates of Males Aged 65 or Older, April 1960 Area Percent in the Labor Force All SMSAs 30.8% Urban U.S. 30.4% Urban U.S. (adjusted) a 30.6% Average in Depressed Areas 25.5% a This is the participation rate in the urban U.S. adjusted for the average racial mix of the 14 depressed areas. Sourse: U.S. Bureau of the Census, U.S. Census of Population, 1960. The tendency for fewer older men to be "economically active" in the depressed areas extends also to the 60-64 years age group. The data show that men in this group have a lower labor force participation rate in the depressed areas than in control areas (See Table 6) . Both the t test and the binomial test indicate that the differences in participation rates between the depressed areas and the urban U.S. — adjusted and unad- justed for racial mix — are statistically significant at the 5% and 1% level respectively. Interpretation of the Results. May we attribute the relatively low participation rates in the several age groups of males to the presence of significant unemployment in the fourteen areas during the 1950-60 decade? A comparison of the 1950-60 changes in participation rates in the areas with the analogous changes in the urban U.S. (adjusted and unadjusted) indicates that, with the exception of two age groups, there were no significant differences between the 1950-60 course of participa- tion rates in the areas and the controls. The data relevant to this com- parison are in Table 8 and Table A-2 in Appendix A. Table 8 refers to the urban U.S. and the selected areas; the appendix table shows the 22 °o <*3 fJ ^ «-0 '"5 fl °S fH fe.s O O ^^ .s ^ •* ^ £*- fc.g HO •Sec; a -^ s 6fJ S o v. O + On . © Cn go i if) if) © CM fh rjn oj r oo od oi CM I I I I I I I 1 I th en « Oi tH l> CM N r>» en p p Cn if) ""^"i CO 1 I I I I I I I I q so h cm © in i i i CO o p o en © 7 i 7 en r)^ oo GO CM SO i-H fH CM I I I en oo © cm ! I tH oo i-H IT) -H TtJ p f-h CO CO p © in in in © — <* © CM I © t^ . en r-. © i-h | cm © CM p oo r> "?h j> I-H © GO* i— < ©" GO Tf t> CO tH CM © CM © © in cm »« i| C4 rf< -h GO » »ft H FH © r-J CM © iq oo p go CM CM © © rH © r^ 7 ~ 7 »-j © © H 00 (O CM © © m . m in Ttj co en r-i I CM SO CM ^ CM © CM I © !>• © I>> f-3 CM I CM h CM O TjH p If) 00 ^ If) ""J i-h i-h »— I CM CM rH tH ^ If) H ts H O ^ H b CM O) H ^ CM CO fh d CM CO ^' rH ^' t^ fh S ~ -? 13 Jh 3 Ph oo t! .— ti I 2 CM in CM ^CMOiifi^io^soqooifiTjH en © i-h rt< © CM CM Tt^" © CO if) 00 CM r^ p0OCM0Op0OCMCOif)CM0O© CO CM fh' CM © CM © CM CM © CO CM rh ^ I I I I I I 22 fh FH FH G FH ^ O JS pq fS i * I U ,H H b< r ■o c U If) FH CO © jC ^j o oo PQ ^ 23 results for the urban U.S. (adjusted for racial mix) and the areas. Be- cause of changes in the definitions of the SMSAs, two areas had to be excluded from the comparison. But it is doubtful that the overall results would be changed if the data for these areas were available. The two age groups in which labor force behavior of the depressed areas was significantly different from that of the controls were the 14-19 and the 20-24 year olds. In these two groups the rate of labor force participation of the areas increased during 1950-60 less than in the urban U.S. (both adjusted and unadjusted) . This difference in behavior was statistically significant at the 3% level by both the t test and the binomial test. In the other age groups the 1950-60 changes in participation rates were roughly the same in the areas and in the urban U.S. Such differences as are shown in the data were not significant statistically even at the 5% level. Even considering the outcome of the 1950-60 comparison it is still reasonable to interpret the overall results as supporting the view that persistent job scarcity in depressed areas has had a negative effect on labor force participation of males. For one thing, most of the areas have had a history of relatively high unemployment that precedes 1950 — the beginning year of our comparison. As a result, the 1950 participa- tion rates of several age groups were already below those of the urban U.S. Second, the fact that the participation rates of the fourteen areas were particularly depressed in the very young and the older (i.e., 60 and above) age groups is, as suggested before, consistent with the expected negative impact of chronic unemployment. 18 Whatever the cause, the data examined above indicate that male labor force participation is significantly lower in the chronically depressed areas than in the rest of the urban U.S. The differences revealed were more extensive than those in the findings of the BLS study. Although the BLS study showed lower labor force participation for men over 65, the difference was "comparatively small." 19 Moreover, the MRLF data, analyzed by the BLS, revealed no tendency for relatively low participa- tion in the 60-64 age group or among the older age groups of the 20-59 bracket. 18 It should be noted that measuring the difference in labor force participation by percentage points understates the relative size of the differences for the very young and the very old. The reason is that in these age groups, the labor force participation rates are themselves relatively low. If the differences in percentage points are converted into percentage differences by dividing them by the participation rate, the resulting picture gives a clearer indication of the effect of job scarcity on the different age groups. For instance, among the 14-19 year olds, the mean difference in par- ticipation rates between the depressed areas and the urban U.S. (adjusted) was 6 percentage points. This means that the average depressed area participation rate was 15.7% below that in the control. For the age groups in the 20-59 years bracket, which also had significant differences in participation, the differences were in the neighborhood of 2-4%. Finally for the older males the differences in participation rates were in the 7-16% range. The relevant data are shown in the last row of Table <>. M Study Paper No. 23, op cit., page 16. It should be noted that, because of the nature of the data used, the BLS study could not apply any of the tests of statistical significance. 24 More generally, the 1960 data suggest that, quite apart from relatively heavy unemployment, the depressed areas are characterized to some extent by underemployment, or underutilization, of their human re- sources. Although not reflected in the usual unemployment statistics, this underutilization has an obviously negative influence on incomes and welfare of the areas' inhabitants. Female Participation In contrast to the case of male participation, a comparison of overall female participation rates in the depressed areas with those in the con- trol areas does not reveal any obvious pattern of differences. This can be seen in Table 9 which is analogous to Table 6 for males — i.e., it shows overall participation rates for each of the fourteen areas standardized by the age distribution of the urban U.S. As Table 9 indicates, six of the depressed areas had overall rates higher than those in the urban U.S. while eight had rates which were lower. The general picture is one of relative diversity rather than of an obvious pattern. Table 9 Overall Female Participation Rates, Standardized by the Age Distribution of Urban U.S. a Area Participation Rate Urban U.S. 37.3 Altoona 30.2 Atlantic City 38.2 Charleston 28.0 Durham 44.5 Erie 33.6 Evansville 32.8 Fall River 44.6 Johnstown 26.2 Lawrence 45.0 Lowell 40.5 Providence 39.2 Scranton 35.4 Terre Haute 34.2 Wilkes-Barre-Hazleton 36.6 a The "overall participation rate, standardized by the age distribution of urban U.S." for our individual area is a weighted average of the participation rates of specific age groups in the area. The weights are the proportions of the female population 14 years or older accounted for by the specific age groups in urban U.S. Source: U.S. Bureau of Census; U.S. Census of Population: 1960. 25 In most of the individual age groups participation rates show the same diversity of behavior in relation to control areas as the overall rates. But as shown in Table 10, there is one noticeable exception — the 60 and above age bracket. The four age groups within this bracket — 60-64, 65-69, 70-74, and 75 plus — all have participation rates significantly below those of the control area. While Table 10 shows a comparison with the urban U.S., adjusted for racial composition, a similar result is also obtained when depressed areas' rates for older women are com- pared with the unadjusted urban U.S. 20 In terms of percents rather + •^ t^ >t- t^ *-s o^ On «^ £ vo ion R April Urba MS '2 £ £ '42 "> "3 0\ v- 3 PC «^\ 0- ^ tf *j -~ te to •*■» £ £ <3 << > o -g -o, ■&, V fe,a--G s o "N 03 \£ V. *- £ o ^ § o -O te rd >■ te ^ £ ^ C5 > £ a "d Cn *A in F< d Ur Area I Q % £ c, 3 te 5j JO k 4) ^ On CM •A CM ** te £ 8 2 " M» O ^ q i> 00 CM — TJH © Tfl ift ^ © | r " 1 | cm | d ] d | 1 | J | © j © © CM | ! 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C/5 O i* in CD 2 >5 IB 5i y a o a & 29 As can be seen in Table 11, the data show the existence of some tend- ency for women in the 65-69 years age group to increase their labor force participation in the depressed areas by fewer percentage points than the equivalent group in the urban U.S. While the tendency is not statistically significant, 28 it may be reasonably interpreted as reflecting the influence of general job scarcity. Of greater interest is the fact that the participation of women in the middle range — 30-34, 35-39, 40-44, 45-54, and 55-59 — increased to a greater extent in the depressed areas than in the urban United States. This trend, which is statistically sig- nificant, 29 appears to lend some support to the considerations under- lying the "additional workers" theory. 30 Apparently, regardless of the differences in the industrial composition of the individual areas, the common element of persistent unemployment has been eliciting an analogous response from these economically active age groups. In sum, the pattern of female labor force participation in the de- pressed areas reflects an interaction of several variables. After years of persistent unemployment the participation of older women appeared to be negatively influenced by the overall job scarcity. The participa- tion of other female age groups seemed to be influenced primarily by the relative availability of jobs that could be held by women — this avail- ability reflecting, in turn, the industrial composition of individual areas both in the present and in the immediate past. Finally the 1950-60 changes in female participation suggest that unemployment among the main breadwinners stimulated relatively large increases in female par- ticipation among women in the 30-59 years bracket. This phenomenon took place regardless of the industrial composition of individual areas. Structure of Unemployment 31 In the following paragraphs we concentrate on bringing out some key facts pertaining to the structure of unemployment in the depressed areas rather than on an analytical interpretation. This change in the focus of the study is due largely to the limitation of time and of data published by the Census. Such value as the following discussion has derives then 28 In a comparison with the urban U.S., the tendency is significant only at the 10% level. 29 For these age groups the difference in the change in labor force participation was significant, according to the t test, at the 5% level. In comparison with the urban U.S. (adjusted), the significance for most of the age groups was actually at the 1% level. 30 A check of relevant data indicated that the relative increase of labor force participation rates in the areas cannot be interpreted as a result of increased favorableness of employment oppor- tunities for women as compared with those in the urban U.S. 31 The following analysis of unemployment in depressed areas uses, for the most part, data for the 14 areas as one group, rather than individual area data. This was done because the figures giving the number of unemployed in some age or occupation groups in certain areas were very small, and thus had a relatively high standard error. In some cases, however, it was still fruitful to use individual area data. 30 essentially from the fact that, unlike in most other studies of unemploy- ment, the data pertain specifically to the unemployed in areas charac- terized mainly by chronic rather than short-run cyclical surpluses of labor supply. Unemployment by Sex and Age The data pertaining to the sex and age structure of unemployment in the depressed areas are shown in Table 12. This table indicates that in the fourteen areas taken as a group men represented a higher proportion of all unemployed than in the urban U.S. As can be seen (first row, columns C and D) , this difference amounted to 4.4 percentage points. The relatively high proportion of men among the unemployed was not prevalent, however, in all of the areas. In five of the areas women act- ually represented a higher proportion of unemployed than in the urban U.S. The men constituted a relatively large proportion of all unem- ployed in those areas where a persistently high level of unemployment was caused primarily by a decline of industries that employed mostly male labor, for example, coal mining. A somewhat analogous picture emerges when we consider rates of un- employment among men and women. When the fourteen areas are taken as a group, they have higher unemployment rates for men than for women — 6.9% as against 6% (Columns A and E in Table 11) . This contrasts with the pattern of unemployment rates throughout the coun- try. In the urban U.S., for instance, the female unemployment rate in 1960 was 0.3 percentage points higher than that for males. However, in this case also there were differences among individual depressed areas. Unemployment rates for men were particularly high in areas whose economic depression resulted from a decline in a primarily male-employ- ing industry. Table 12 also contains data on the age distribution of the unem- ployed. The data indicate that, in comparison with the urban U.S., a relatively large proportion of the male unemployed in the depressed areas was concentrated in the middle age groups. This fact appears to be largely related to the previously described characteristics of popula- tion and labor force in the fourteen areas. The out-migration and com- paratively low labor force participation of the very young have reduced their relative importance among the unemployed. Similarly it will be recalled that older men had relatively low participation rates in the depressed areas. As a result their proportion of the unemployed was low as compared with that in the urban U.S. 32 The age distribution of the female unemployment in the depressed areas is roughly analogous to that of males. As compared with the con- 32 This result agrees with the findings of the B. L. S. study. 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Lawrence 1 Fall River 2 Durham 3 Lowell 4 Providence 5 Atlantic City 6 Wilkes-Barre- Hazelton 7 Scranton 8 Terre Haute 9 Erie 10 Evansville 11 Altoona 12 Charleston 13 Johnstown 14 44 1- *j *-h -51 s ^ *J 2» £ 2 .2 g «.-§■> ^ ^i "£ ^ ^ c2 1 l-s g ^ ss •IS 5o ^i r* ^S J 5 s i •a* + ^N 7 7 O) cr> l-H CM go 7 O CM © cn o ^ w i t>« 00 W CO ^ ^ © _; I © © ^ p-h MM 1 i I ~ 7 7 ~~7 7 7 00M^HO>Nt>;O CO Sfj p-h' <^i i-H CM CM i-5 00 i-H M M M I ^ ^ so c^ © q i cm oq gsj _; i-h *-! ©0 i-h J CO CM I I I I I I ^p i> © q oo m ^ o r^j fj, M Q _' so c\[ VT5 CM © CO xCi rjn © !>; ih 00 © © C^j _h* _h* SO CO CM ^ CM 00* I I i>.CM^^qcMcqr^oq go C5 CO T^ CO CO CM CO* CO © CM r- 5 ©' lO iTi CO 00 CM* © CO CM © CM ^t< r-4 I I ^ io (£) »o q i> -h oo to ^ w irJcMcocoirJThirjr^coT^O I J I I Mil tH >— | i— lOOiOcO'— < co © © -— | CM CM CO rt< © rjH i-h © CM i-h ©' I I I I I Oi^t^THyjioqooqoiq co i>I © © -^ o" rh © © © r-5 © «*< QJ Pi -.Is o ra o W5 4J w „ o ^2& |,2 g 12 ;§ a -9 £ < II o o 23 W 2 If 8 n .2^ -as oU e o SH-5 45 Appendix B Further Lines of Research In the course of the present study, it became obvious that several topics discussed above could be examined fruitfully in greater depth and de- tail. The following indicates briefly the lines of inquiry most relevant to the contents of the paper. A. Population In the study of the population of depressed areas, the most obvious gap in the available data pertains to the characteristics of in-migrants and out-migrants — their age, sex, and race. As a result of the work done by the U.S. Department of Agriculture, the data on 1950-60 internal migra- tion — classified by race, sex, and age — will soon become available. These new data will be of great value in an analysis of the adjustments of depressed areas' inhabitants to chronic job scarcity. In particular, the data could be used fruitfully to throw further light on the mechanics of changes in the structure of population, labor force and unemploy- ment in these areas. To cite just one example, net out-migration of a specific age and sex group from an area may be directly related to the rate of labor force participation of that group. If the out-migrants can be assumed to represent, in the main, potential labor force participants, net out-migration may lead to relatively low labor force participation in the depressed area for that specific group. B. Labor Force Participation The question of the relation between labor force participation and the number and nature of job opportunities in a given area constitutes the key aspect of our discussion. The preceding analysis has suggested a number of questions that can be answered only through further exami- nation of data relevant to this issue. (1) Trend of male labor force participation in the depressed areas. As indicated in the paper, the 1950-60 comparison of male labor force participation showed a significant difference of behavior in the depressed areas only for the two youngest age groups of male workers. In spite 46 of this resujt, we still interpreted the low participation rates of the depressed areas as reflecting the influence of persistent unemployment. Our argument was based largely on the fact that most of the areas were already siaffpring from substantial unemployment in 1950. (2) The relation between areas' industrial composition and female labor force participation. The analysis in this paper indicates that the nature of the industrial composition of a depressed area is an important factor influencing female labor force participation. This suggests a question of general importance to any agency concerned with public policy toward unem- ployment: Is the observed relation between industrial mix and labor force participation of women peculiar only to chronically depressed areas or does it characterize all or most of urban labor markets? A priori reasoning does not provide an obvious answer to this ques- tion. It is possible to argue that, ceteris paribus, the nature of the available jobs should affect female labor force participation regardless of the degree of unemployment prevailing in an area. But there is also a reasonable argument providing a different answer. If, as a result of out-migration, the depressed areas have a relatively large number of women who are either less enterprising or less committed to active search for work than the women of other areas, the overall labor force partici- pation in depressed areas may be more strongly affected by the local demand for female labor than is the case elsewhere. Accordingly, to provide the answer to this question it would be necessary to examine industrial composition and labor force participation in a large number of areas, holding several other variables, such" as income or unemploy- ment of males, constant. (3) Labor force participation of married women in depressed areas. The Census of Population contains data for all SMSAs on the labor force participation rates of married women. For SMSAs with population of 250,000 or more there is additional information giving the same data cross-tabulated by age. However, only five of the selected depressed areas were in the 250,000 or more group. 4-n examination of the data published for all fourteen areas suggests a hypothesis that merits further investigation. It appears from the data that in triose areas where female participation in general is higher than participatipri ip the control, participation rates for married women are proportionately still higher than the equivalent rates in the control. Analogously, in areas where participation of women is low in relation £0 the c§ntrpj, participation of married women is proportionately lower than in the control. This pattern of behavior suggests the hypothesis that the influence of favorable or unfavorable industry mix on female participation is greatest among the married women. 47 Since the population of the depressed areas is older than that of the control, a thorough test of the above hypothesis would involve stand- ardization for age. This can be done only by examining data similar to those now published only for the large SMSAs. As in the case of the overall relation between industry mix and female labor force participation, the narrow issue of participation of married women can be examined fruitfully with respect to all urban areas, (4) Measures of areas' industrial composition. As indicated previously (See footnote 22.) , the procedures used in this paper could result only in a rough measure of the relative favor- ableness of areas' industrial mix to female employment. Even on the basis of the published Census of Population data a more detailed index of relative favorableness could be constructed. But a still more sensitive measure could be constructed by using data from other sources — the Census of Business and materials published by the Department of Labor. These more detailed measures could be fruitfully used in further tests of the significance of industrial composition as a factor influencing female labor force participation. C. Structure of Unemployment (1) Industry of the unemployed, by sex Data showing the industry of the unemployed, cross-tabulated by sex, are now published only for areas with a population of 250,000 or more. As a result, the present paper was unable to consider this important aspect of the structure of unemployment in the depressed areas. An analysis of data giving the composition of the experienced unem- ployed by industry should provide insight analogous to that obtained from the analysis of the unemployed by their occupations. Specifically, these data can be used to estimate the importance of the industrial mix in the depressed areas as a factor accounting for heavy unemployment. (2) Trends in occupational structure A cursory examination of data on the change in the occupational structure of experienced workers in the fourteen areas suggests a reason- able hypothesis concerning adjustment to chronic unemployment. The hypothesis is that the members of occupations most heavily affected by unemployment in depressed areas will respond more strongly — through migration, withdrawal from the labor force, or change in occupation — to job scarcity than workers in equivalent occupations in other areas. The testing of this hypothesis will involve an examination of the trend in the occupational structure in depressed areas and in the urban United States. Such an examination can be made on the basis of data presently available in a published form. 48 ^° . - * U. S. GOVERNMENT PRINTING OFFICE : 1964 O - 748-247 PEf !. N .?Ji A . TE UN| VERSITY LIBRARIES AD0DD7D 1 4ESE1