A decline in social status relative to better-paid peers is a key reason why so many American men have dropped out of the labor force, according to the latest paper to examine a conundrum that’s baffled economists for decades.
Men’s sense of their status in the labor market is highly dependent on how much they earn compared with male peers of similar age, according to the research by Pinghui Wu, an economist at the Federal Reserve Bank of Boston.
And as their wages got left behind by the earnings of their better-educated peers, men without a college degree have been more likely to exit the labor force, Wu wrote. Younger white men in particular are more inclined to leave the job market when their expected wages fall in relative terms, she wrote.
