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Abstract: A decline in the employment-to-population ratio since 2000 follows several decades of upward trend. The sharp decline in manufacturing employment that started around 2000 has been proposed as the prime contributor to the decline in overall employment. I show that the key factor in the reversal of trend in the employment ratio is a marked slowdown in the growth of service employment. A standard model of structural transformation is broadly consistent with the changing patterns of sectoral employment in the U.S. economy between 1960 and 2019 and highlights the importance of convergence in labor force participation of women.
Keywords: employment, manufacturing, services, productivity, structural transformation, labor force, women.
JEL Classification: E1; E24; J11; J16; J21; J22; O11; O41; O51.