Regional labor force participation is the same as the nation’s
The labor force participation rate is an important measure of economic performance. It reflects the share of people who are engaged with the labor market - by either working or looking for work - among the total population eligible to work.
In 2023, the labor force participation rate in the Kentuckiana region was 65%. So among the region’s adults ages 16 and older who were not living in an institution (such as a prison or nursing home), 65% were either working or looking for work. The region’s labor force participation rate was the same as the nation’s and four percentage points higher than Kentucky during the same time period.
Kentucky regularly ranks among the top ten states with the lowest levels of labor force participation, and has done so for the last forty years (with the exception of three years in the early 2010s when it fell to the 11th spot).
Research from the Kentucky Center for Statistics shows how low levels of labor force participation in Kentucky are largely driven by its Appalachian counties. Kentucky’s urban counties have labor force participation rates that are on par with urban counties throughout the country. Similarly, Kentucky's rural counties, sans Appalachia, have labor force participation rates on par with rural counties throughout the country. (In general, urban areas have higher labor force participation than rural areas.) However, Kentucky's Appalachian counties have very low levels of labor force participation, lower than the rest of Appalachia, dragging down the state's overall labor force participation rate.
Because the labor force participation reflects the population 16 and older, without an upper age limit, it is heavily influenced by an aging population. Since 2000, the nation’s labor force participation rate has fallen by over six percentage points, largely due to an aging population.
To account for the overall aging of the population, it is helpful to focus on the labor force participation rate of people in their prime working years, ages 25 to 54. The labor force participation rate of prime working age adults in the Kentuckiana region was 85% in 2023, the same as the nation. Research from the Kentucky Center for Economic Policy found that caregiving and health are the primary reasons Kentuckians in their prime working years are not in the labor force.
An aging population is expected to contribute to a tight labor market as the new norm. Policy changes that limit immigration will further constrain the pool of potential workers. It is therefore essential that youth and young adults successfully transition into the workforce. KentuckianaWorks programming helps to develop the next generation of talent through efforts such as SummerWorks, After the Tassel, the Academies of Louisville Alliance, and The Spot: Young Adult Opportunity Center. Employer engagement with these efforts helps connect young adults to quality jobs and sets them up for career growth.
