Remote learning and elder care appear to explain why thousands of Pennsylvania residents have exited the labor force during the pandemic.
The number of Pennsylvanians aged 16 or older who are neither working nor looking for work has risen by 120,000 compared to three years ago, according to the state’s Independent Fiscal Office. The agency published research earlier this month on reasons why the workforce contracted.
It shows that Pennsylvania’s labor force participation rate reached 61.7% in May, even lower than the level to which it had plunged at the outset of the pandemic, when it stood at 61.9%. The state has been slower than the rest of the country to approach pre-pandemic rates, which hovered around 63% in May 2019.
The disappearance of Pennsylvania workers since then has resulted primarily from population losses. But the new study shows it also coincides with a 55% increase in the number of K-12 students who are being homeschooled or are enrolled in cyber charters. This school year, some 100,700 students are receiving those forms of remote instruction, according to the research.
“So we … think that some parents are leaving the labor force and providing in-home instruction. And that could be somewhere, we think, around 10,000 workers who departed the labor force,” said Matt Knittel, the director of the Independent Fiscal Office.
The analysis found that enrollments at public schools, non-public schools, and brick-and-mortar charters fell from almost 1.9 million to about 1.8 million between the fall of 2019 and the fall of 2021.
At the state’s nursing homes, meanwhile, the number of residents has declined by 15% amid COVID-19. By this June, assisted living facilities housed 64,000 people, down from 76,000 in June of 2019. The analysis also shows that nursing homes and residential care centers have purged more employees than any other sector of the economy since the spring of 2019.
Knittel said those reductions likely prompted some people to quit their jobs to care for elderly family members. Some could afford that decision during much of the pandemic, he said, thanks to federal stimulus money and stock market gains. But, the study notes, rising inflation could begin to eat into those savings.
“For other folks, I think they were in a two-earner household,” Knittel said, “and they decided to go with one earner and have the other spouse stay at home and provide care.”
His office noted that other factors that are harder to quantify have also steered Pennsylvanians away from the workforce. They include lifestyle changes and early retirements as well as increased government benefits and the ongoing student loan moratorium. In addition, some workers have struggled to secure childcare while others continue to experience lingering health problems stemming from COVID-19.
But in a trend that predates the pandemic, the state’s population continues to age and shrink. It contracted by an estimated 48,000 residents between 2019 and 2022, according to the new analysis.
COVID-19 appears to have accelerated the losses: In February, the Independent Fiscal Office released research that found the virus directly or indirectly caused a rise in deaths among Pennsylvanians between ages 45 and 84.
The study shows that between 2020 and 2021 deaths increased across age groups in Pennsylvania. They exceeded the number of births in the Keystone State during the same period, contributing to the net loss in population.
Knittel said people have moved away from Pennsylvania, too, with retiring Baby Boomers especially likely to relocate to southern states such as Florida and North Carolina. A falloff in international migration during the pandemic has made it more difficult for the Keystone State to replenish its population.
A smaller workforce continues to strain Pennsylvania employers who cannot fulfill their labor needs. But the new data shows that the state’s businesses have had a relatively easier time with hiring than the rest of the country.
While there were 1.25 job openings for every unemployed person in Pennsylvania in April, the national ratio amounted to two jobs for each unemployed worker.
“Our economy is just growing more slowly than the average U.S. state,” Knittel said. “So if we go down to the southern states where they're having population gains and things are moving more quickly, that economic growth is stronger, and you'll see that that [job openings-to-unemployed] ratio is higher.”
On Wednesday, the U.S. Bureau of Labor Statistics reported that Pennsylvania was one of just three states to experience an increase in unfilled jobs in May, when it added 30,000 openings. It was one of only two states where quitting was up during the same month, with an additional 38,000 workers opting to leave their jobs.
Despite those monthly shifts, Knittel predicted that over the next decade the state will continue to experience the trends that emerge in his office’s research.
“So we do think if nothing changes, that the labor force will continue to contract. And of course that presents challenges for economic growth,” he said.
