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Falling jobless rate might not be good news.

April 9, 2007

Joblessness is ebbing in Indiana, but the reason might be driven more by people dropping out of the labor force than by workers soaking up new jobs.

The state’s unemployment rate stayed stubbornly above 5 percent for four years. In the past few months, though, the rate mostly has stayed below 5 percent, U.S. Bureau of Labor Statistics figures show.

That’s nowhere near the 3 percent that characterized the final years of the go-go ’90s, but nevertheless is an improvement.

Or is it?

Two economists—Bill Witte of Indiana University and Patrick Barkey, Ball State University’s expert on the state economy—suspect the decline is driven by baby-boomers who are laid off and then decide to quit working. Therefore, because they aren’t looking for jobs, they aren’t classified as unemployed.

Though hard to document, Witte and Barkey say, anecdotal evidence suggests boomers might stop working altogether particularly after losing factory jobs.

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