Nevada’s Labor Landscape: Post-Pandemic Shifts in Workforce Engagement

The labor force participation rate (LFPR) measures the percentage of people aged 16 and older who are either working or actively looking for work. This is different from the unemployment rate, which only includes those currently seeking jobs but not employed.

The COVID-19 pandemic triggered a recession that uniquely impacted Nevada, worsening the state's labor force imbalances. 

• Nevada's unemployment rate soared to 30.6 percent in April 2020 before falling to 5.5 percent by February 2023. 
• The labor force participation rate (LFPR) remained 2.9 percentage points lower than pre-pandemic levels; it was 64.3 percent in February 2020 and 61.4 percent in February 2023. 
• This was the third-largest decline among all U.S. states during this period. Nevada’s LFPR ranking also dropped from 20th to 32nd. 
• Over the same period, eight states—Alaska, Illinois, Louisiana, New Jersey, North Dakota, Oklahoma, Oregon, and Utah—experienced an increase in their LFPR.

This report, a collaboration between UNLV’s Center for Business and Economic Research (CBER) and the Guinn Center, builds on a previous study to explore whether Nevada’s LFPR remains affected by the pandemic’s impact. Using updated data from 2022, the report investigates whether Nevada’s reliance on the leisure and hospitality industry and the workforce’s relatively low levels of higher education are contributing to the state’s lagging LFPR. Note that 2020 data is excluded because the U.S. Census Bureau did not release its usual dataset due to the pandemic.

The Guinn Center also contributes actionable policy considerations at the end of the report. 

Key Findings

• Labor force participation rates in Nevada declined from 2019 to 2022 among most age groups except those 55 and older. 
• Considering the labor force participation rate in 2019, we estimate that Nevada had approximately 10,900 fewer workers in the labor force in 2022. 
• The LFPR for individuals ages 16 to 34 enrolled in school in Nevada decreased from 53.0 percent in 2019 to 50.0 percent in 2022, partly contributing to the overall decline in the LFPR for this age group. This might reflect higher unemployment rates among this group when they were in the labor force or increased average personal income among those neither enrolled in school nor in the labor force. 
• An additional year of data indicates that educational attainment is not the primary factor behind the lower labor participation rate in 2022 compared to the pre-pandemic level. Nevertheless, educational attainment remains closely linked to labor participation. 
• Married males experienced the largest decrease in LFPR. 
• A lack of economic diversification may continue to explain why Nevada’s labor participation rate in 2022 was lower than in 2019. At the industry level, the labor force in the leisure and hospitality sector plummeted by 11.8 percent from 2019 to 2022, while most other sectors experienced gains during the same period. 
• We estimate that approximately 10,800 former workers in the leisure and hospitality sector remained out of the labor force. This represents all but 100 of the 10,900 statewide lost workers mentioned above. Data suggests some workers viewed the pandemic as an opportunity for early retirement, some had difficulty finding childcare in the wake of market contractions caused by the pandemic, and others previously had jobs that were temporarily or permanently eliminated. 
• Nationally, the leisure and hospitality sector had the highest unemployment rate at  6.6 percent in 2022, followed by the retail  sector at 5.2 percent. These two industries represented over 30 percent of Nevada’s labor force in 2022, compared to about  20 percent for the U.S.

Policy Considerations

There is a range of policy strategies that Nevada might consider, and all have proven successful in other states and nations. 

• When a local economy can strengthen the alignment between its system of education and the career pathways available, new workforce entrants are better prepared and have more fulfilling and lucrative career options. 
• People with disabilities are an underappreciated labor force segment, and bringing them into the fold can yield additional individual and societal benefits. 
• Reforming the State’s occupational licensing could also open the door for underemployed individuals to fully contribute to the economy and for workforce shortages to be filled. 

There is work to do, but a variety of proven options are available to Nevada’s policymakers.

If you have questions or comments about this report, please contact us: info@guinncenter.org.

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