Best of Blogs for Week of May 31st

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

DQYDJ covers Personal Finance 101

The Big Picture shares TrendSpotting: Rentaling vs Owning 
which has a very interesting graph showing the increase of renters / owners over the past 6 years

--

College Enrollment versus Labor Force Participation for Age 18 to 24

I've been discussing labor force participation lately.   My first look at the recent trends in labor force participation was only for ages 25 to 54.  I excluded people age 18 to 24 with the belief that people in that age range are going to college more which skews their labor force participation rates.

I got figures for college enrollment by age at the Census site.  The census has data by decade going back to 1980 and the latest numbers are from 2009 so I'll look at dates for 1980, 1990, 2000 and 2009.      I used a BLS database lookup to find the total population and the labor force size.   Add it all up and I get the charts below:

First lets look at men age 18 to 24.

Those lines seem to slope in the opposite directions at about the same rate.    In fact from 1980 to 2009 the percent of population in college was up 14% and the labor force rate was down 12%.  

Now the women age 18 to 24.

Women went to college at a faster rate.   They went from 24% to 45% an in crease of 21% of the population.   At the same time their labor force rate waffled and dropped and is down 3% net.    The trend here is a little different than for men as the college enrollment rate is up a lot but the labor force is less changed.

You might have noticed in the two charts above that if you add the college attendance rate and the labor force participation rates that you get more than 100%.    We can assume that is due to overlap with a certain group that both attends college and works.

If we add the percent in college and the percent in the labor force per gender then we get the following trends:

As you can see there, the total percent of the population working and/or in college has just recently about hit parity between the sexes.

For men I would conclude that the increased college attendance and decreased labor force are equal and opposite.    More men are going to college than joining the workforce.    On the other hand for women I'd say that rather than joining the workforce at a higher rate as is the general trend for women, more young women are instead going to college at even higher rates than their male peers.


--

Stay At Home Parents and the Labor Force

I recently looked at the overall trends for labor force participation for men and women for the past few decades.   That data was narrowed down to 25-54 year old group to set aside people in college and boomers nearing retirement or going into disability.    The 25-54 group should normally be the peak of labor force participation.    The trend for the past few years has been a decrease in labor force participation.   Why is that happening?

One theory I came up with is that there may be more people staying home to raise their kids instead of working.   As more and more women work full time, I've heard that theres been somewhat of a reverse in trends with more women deciding to stay at home to raise their children instead of working.   I've seen this called the 'opt out revolution'.    At the same time with more women working there is also more men who are becoming stay at home Dads.   

I decided to check out this theory and see if there has been a change in the number of stay at home parents and what impact that might have on the labor force participation rate.


More Stay-at-home Dads

A Boston College study 'The New Dad : Right at Home' from 2012 talks
The BC study also said specifically that "This translates to an increase of at-home dads from 81,000 in 2001 to 176,000 in 2011"    Thats a NET increase in SAHDs of +95,000.     From '01 to '11 the population increased from 59.5M to 61.5M.   Therefore the % of SAHD went from just 0.13% to 0.28%. 

Thats an increase of 0.15% of the male population opting to be SAHDs.

 More Stay-at-home Moms

The Census report Historical Changes in Stay-at-Home Mothers : 1969 to 2009 has data on the number of SAHM over the decades.   Table 1 on page 24 shows the total number of SAHM and other mothers over the decades.    In 1999 there were 5.2M SAHM's and by 2009 the number had increased  to 5.7M.   Thats an increase of 500k SAHMs.      During that period from '99 to '09 the population of women age 24-54 went from 60.1M to 63.4M.   Therefore the % of SAHM went from 8.65% to 8.99%.

That gives us an increase of just about 0.34% SAHMs.

Is 'opt out revolution' real?

A slight side note here.   I mentioned the 'opt out revolution' which is the idea that more women have decided to not work and instead be SAHM's.    The Census report I found the SAHM questions that idea.   They say that the phenomenon may be over reported or overstated by the media.   Also they point out that a higher % of SAHM's are Hispanic or foreign born.   It may be then that the increase in SAHM's from 1999 to 2009 is simply a demographic shift due to a larger Hispanic or foreign population.



Total Impact to Labor Force

Unfortunately the date ranges I have for the data for men and women are off by 2 years with '01 to '11 for men and '99 to '09 for women.    So I can't get an exact total number, but I'll just ignore that and figure it out as if the years did match and we'll pretend its close enough.   At the start of the decade we had 81k SAHD and 5,200k SAHM.   The total population was 59.5M men and 60.1M women.  That gives a combined stay at home parent % of 4.4%.    Then at the end of the decade there were 176k and 5,700k SAH's and 54.6M +| 63.4M population.   That results in 4.7% population.    

The total increase in stay at home parents over the decade was about +0.3%.

Now if you look at the same period roughly 2000 to 2010 then the overall labor force participation rate dropped from 84.4% to 82.4%.    Thats a 2% decline in the population thats in the labor force.

We could conclude then that about 15% of the people who left the labor force are now staying at home with their kids.    That doesn't account for much of the population that is no longer in the labor force but its a factor.

What Caused it?  Was it choice or not?

The data shows that there are in deed more stay at home parents and that number has grown faster than the population.   However we don't know what caused what.    Its possible that individuals decided that they did not want to work, quit their jobs and dropped out of the labor force to stay home with their children.   Its also possible that individuals lost their jobs due to the poor economy, struggled to find work for 1-2 years, finally gave up and are now staying at home with the kids.   Or maybe its just shifting demographics like the Census report pointed do more Hispanic and foreign born mothers.    The statistics don't tell us the "why" of the change.   


--

Considering Energy Use When Shopping for a TV

While browsing at Costco I notice that most of the TVs now seem to show their energy usage guide.   The numbers don't seem very high and are usually around $25 a year ballpark.   It seems like a pretty small figure compared to spending $500-$1000 on a TV.    However the amount of electricity used by TVs should not be ignored when comparing models.   If you add up the electricity cost over a 5 year lifespan the differences between models can be significant. 

To illustrate the point I grabbed the retail prices and electricity costs for a few TV models off the BestBuy website.   I then figured the NPV (Net Present Value) of purchasing the TV at the advertised price and the energy consumption over a 5 year period.   I used an arbitrary 4% discount rate for NPV.

Here is a selection of 55" TVs :

Brand	Tech	Retail	Energy	NPV
Insignia	LCD	$600	$47	($786)
Haier	LED	$649	$24	($731)
TCL	LED	$700	$15.5	($742)
Vizio	LED	$800	$16	($840)

The LCD based Insignia model is the cheapest to buy at just $600.   However if you figure in 5 years worth of electricity costs then the LED based Haier model is cheaper in the long run.   Another detail to notice is that between 3 different m manufacturers we see a fairly significant spread of energy costs among the LED models.   The costs ranged from $15.5 to $24 per year for the same size and technology.   You can see a pretty large difference in energy use between brands.  

And here are some 50" TVs:

Brand	Tech	Retail	Energy	NPV
Panasonic	Plasma	$500	$26	($597)
TCL	LED	$530	$10	($554)
Insignia	LCD	$550	$39.00	($702)

In this case again an LED model has the lowest NPV but not the lowest Retail price.    The plasma from Panasonic is cheaper to buy but has higher electric use.

In both examples I looked at buying the cheapest TV would result in higher overall costs once you figure in the cost of electricity.

Keep in mind these are just examples to illustrate the point.   You may do better overall with a bargain sale price on a Plasma model.   But the point is to look at both the initial purchase price cost of buying the  TV as well as considering the long term energy usage costs.

It should be pointed out that the energy guide figures are based on 11¢ kWh electricity rates and 5 hours of daily usage.   Your electricity cost and viewing habits are likely to vary so you should probably adjust the figures to match.

Bottom Line:   Don't ignore the energy consumption for large screen TVs.   Paying a little more for a more energy efficient model can save you in the long run.
--