Are Video Games Luring Young Men Out of the Workforce?

Are Video Games Luring Young Men Out of the Workforce?

One of the most challenging and puzzling trends in the US labor market since the Great Recession has been the persistently high number of long-term unemployed Americans of working age. Even as the economy has improved and the labor market has tightened, labor force participation remains at a lull, and many of those who dropped out of the workforce in the past decade appear unwilling or unable to re-enter it. That’s particularly true of prime-age men without college degrees, who have lost ground in the job market as traditional blue-collar jobs have disappeared or become less lucrative—and will most likely continue to disappear in the coming decade as roles mostly held by women grow in availability and importance.

Employers and policymakers have begun to think harder about how to get these men re-engaged in the workforce, whether through earning college degrees or transitioning into traditionally female-dominated professions like health care. There is, however another possible explanation for the decline of work among young men: What if they’re not working as much because they don’t want to? What if they’d rather be playing video games? That’s the provocative conclusion of a new paper by economists Erik Hurst, Mark Aguiar, Mark Bils, and Kerwin Charles, released recently by the National Bureau of Economic Research. The New York Times‘ Quoctrung Bui goes over the paper’s findings in detail:

By 2015, American men 31 to 55 were working about 163 fewer hours a year than that same age group did in 2000. Men 21 to 30 were working 203 fewer hours a year. One puzzle is why the working hours for young men fell so much more than those of their older counterparts. The gap between the two groups grew by about 40 hours a year, or a full workweek on average. …

Hurst and his colleagues estimate that, since 2004, video games have been responsible for reducing the amount of work that young men do by 15 to 30 hours over the course of a year. Using the recession as a natural experiment, the authors studied how people who suddenly found themselves with extra time spent their leisure hours, then estimated how increases in video game time affected work.

Between 2004 and 2015, young men’s leisure time grew by 2.3 hours a week. A majority of that increase — 60 percent — was spent playing video games, according to government time use surveys. In contrast, young women’s leisure time grew by 1.4 hours a week. A negligible amount of that extra time was spent on video games. Likewise for older men and older women: Neither group reported having spent any meaningful extra free time playing video games.

In a convocation speech at the University of Chicago’s Booth School of Business last June, Hurst previewed some of the paper’s preliminary findings, noting that 22 percent of lower-skilled men aged 21-30 had not worked at all during the prior 12 months, and stressing his emerging conclusion that the growing value of leisure time, provided by technology like video games, was a significant factor in this decline:

How do we know technology is causing the decline in employment for these young men? As of now, I don’t know for sure. But there are suggestive signs in the data that these young, low-skilled men are making some choice to stay home. If we go to surveys that track subjective well-being—surveys that ask people to assess their overall level of happiness—lower-skilled young men in 2014 reported being much happier on average than did lower-skilled men in the early 2000s. This increase in happiness is despite their employment rate falling by 10 percentage points and the increased propensity to be living in their parents’ basement.

These video games and technology innovations—iPhones, Facebook, and Instagram—are both cheap in relative terms, and fun. These technological innovations, therefore, have made leisure time more enjoyable. This acts like an increase in an individual’s reservation wage. For lower-skilled workers, with low market wages, it is now more attractive to take leisure. However, for higher-skilled workers, even though the value of leisure has increased, our wages are still high enough that we continue to work.

It’s hard to say just how employers should respond to this trend, if Hurst and his colleagues’ findings turn out to be accurate, but it is interesting to see this research come out at a time when a growing number of employers are trying to attract a younger, more technologically savvy cohort of employees by making their recruiting processes, skills assessments, and training programs more like video games.

Princeton economist Alan Krueger also pointed to video games as a driver of lower workforce participation among prime-age men in a paper (pdf) presented at the Boston Federal Reserve Bank’s annual conference last October. But Krueger identified another culprit as well, as Fortune’s Chris Matthews noted at the time—namely, poor health and dependency on prescription painkillers:

The drugs explanation is derived from the fact 43% that working-age men out of the labor force report poor health at a much larger rate than other men, and that 44% of this group reported taking pain medication on a regular basis. Two-thirds of the medication takers were taking prescription medications, and though we can’t know for sure whether these medications are addictive opioids, it’s likely that a large share are, given the four-fold increase in prescription of these drugs since 1999.

We also don’t know whether these workers are being kept out of work by dependency on drugs, or whether use of these drugs is merely the result of pain that would keep these workers out of of the labor force anyway. But data on social security disability use shows a doubling of growth in use of that program since 2000, suggesting that some workers would perhaps decide to work through whatever pain they have if job opportunities were better.