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Remembering the startups we lost in 2022

It’s been a year. This roundup is never a particularly fun one to write. No one wants to see startups fail, but we’re all keenly aware that most ultimately…



It’s been a year. This roundup is never a particularly fun one to write. No one wants to see startups fail, but we’re all keenly aware that most ultimately do. A commonly cited figure suggest that 90% of these companies will ultimately fail. But even with that in mind, 2022 just hit different.

The previous two years were unprecedented in startup land, of course. Some startups blossomed and others struggled amid shutdowns and job losses. Then came the rise and fall of the SPAC wave and global supply issues. Now it’s the economy, stupid. According to figures from Crunchbase, Q3 venture capital dropped a mind-boggling 33% from last quarter and 53% from the same time last year.

The days of the $20 million seed round appear to be over — at least for now. It is, frankly, a bad time to be raising and, by extension, a bad time to be running an early-stage startup. Accordingly, this year saw a lot of startups pumping the brakes or pulling the plug. As such, this is by no means a comprehensive list. And with the continued spiral of the crypto firm, it seems we’re not out of the woods yet.

With all of that in mind, let’s take a look at some of the startups that didn’t make it.


Airlift, once one of Pakistan’s most richly valued and funded startups, shut down in July due to lack of capital and an unsuccessful attempt to close a funding round. Before that, the commerce service platform raised $85 million in the country’s largest Series B funding, at a valuation of $275 million. The fall from those heights, thus, didn’t just impact employees and investors, but also general enthusiasm about the Pakistani tech ecosystem.

Argo AI

Image Credits: Argo AI

It wasn’t from lack of interest — or money. Argo AI had the support of two of the world’s largest carmakers: Volkswagen and Ford. Founded in 2016 by Google and Uber vets, the Pittsburgh-based firm managed to drum up $1 billion in funding over its half-dozen-year existence. Back in October, however, management dropped a bombshell during an all-hands: Argo was shutting down.

The technology and some employees would be absorbed into either Ford or VW, and the rest of its 2,000+ employees would be getting severance. Ultimately, it seems, the company failed to bring on new investors and drum up additional funds from existing backers. The dream of autonomous driving certainly isn’t going away any time soon, and both automakers want to get there, whether via in-house development or third-party acquisition. Unfortunately, however, Argo won’t be around to play a part.


Fast, a startup that provided online checkout products, announced in early April that it would shut down after days of chatter that its future was in doubt. Apparently, its 2021 revenue growth was modest — just six figures — and its cash burn was high, with no fundraising prospects in sight.

The company — founded by Domm Holland and Allison Barr Allen — was one of those that had plenty of hype around it, so its demise (especially after raising $124.5 million in three years) caused quite a ripple in the startup world. Notably, as it imploded, the company described itself as a “trailblazer,” saying that not all such parties make it to “the mountain top,” claiming that while it failed, the startup managed to “forever” change the world of online commerce. While the debacle paled in comparison to what would come later in the year when it came to overly confident leaders (ahem, see below), it was perhaps one of the earliest signs that all was not as rosy as it appeared in fintech land.


Sam Bankman-Fried, founder and CEO of FTX, testifies during the House Financial Services Committee hearing titled Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States, in Rayburn Building on Wednesday, December 8, 2021

Image Credits: Tom Williams/CQ-Roll Call, Inc / Getty Images

We debated on whether to include cryptocurrency exchange FTX as it technically has not shut down. But as one staffer pointed out, “We certainly lost it as the company it was.” The once-third-largest crypto exchange FTX on November 11 filed for bankruptcy in the U.S. and announced that CEO and founder Sam Bankman-Fried had resigned from his role. That news came days after a week-long collapse of the FTX empire as the company attempted to keep itself afloat, seeking acquisitions and fresh capital from market players. By December 12, Bankman-Fried had been arrested in the Bahamas. The next day, the U.S. Securities and Exchange Commission (SEC) had officially charged Bankman-Fried with defrauding investors.

The demise of the once-high-flying startup, which had raised nearly $2 billion in funding and once appeared to be flush with cash, no doubt marked a very low point for the crypto space. For now, Enron turnaround veteran John J. Ray III is serving as FTX’s new CEO, reportedly making $1,300 an hour.

Other crypto companies that also filed for bankruptcy this year but also technically did not shut down include Celsius and BlockFi.


Image Credits: Haus

Haus, a direct-to-consumer aperitif business backed by the likes of Casey Neistat, Homebrew Ventures and Coatue, shuttered earlier this year. What was surprising was that Haus announced this shift after it crossed the $10 million in revenue threshold and announced that it would be hitting national distribution with Winebow — two markers of growth.

Instead, the company’s eventual demise was triggered by an investor kerfuffle. Haus CEO and co-founder Helena Hambrecht said that Constellation committed to leading the startup’s $10 million Series A, and even offered to advance the startup money as runway began to dwindle. Then, last minute, Constellation backed out of the deal without any specific reasoning other than “timing,” she says.

The co-founder said “there’s no villain” in the shutdown story, yet Constellation’s dropout shows another example of how difficult it is to be a venture-backed, direct-to-consumer company.


Proving that home automation can be a tough nut to crack, Insteon abruptly shut down in mid-April 2022, turning off its cloud servers without giving customers any warning. Launched by startup SmartLabs in 2005, Insteon at one point had an agreement with Microsoft to sell its kits at Microsoft Store locations and was one of the two launch partners for Apple’s HomeKit platform, with the HomeKit-enabled Insteon Hub Pro.

Insteon for the first few days didn’t respond to questions about the shutdown and its CEO, Rob Lilleness, deleted his LinkedIn account. Subsequently, however, the company updated its website with a statement that blamed the sudden liquidation on pandemic and supply chain problems. Apparently — if the unattributed statement is to be believed, at least — the goal was to find a parent for Insteon. But while a sale was expected in March, the plans ultimately fell through.

Insteon’s proprietary protocol likely didn’t do it any favors. More widely compatible technologies like Zigbee, Z-Wave and Matter are licensable and widely adopted, giving Insteon little in the way of leverage.


Image Credits: Kite

Kite, a startup developing an AI-powered coding assistant, shut down in November despite securing tens of millions of dollars in venture capital backing. Kite struggled to pay the bills, founder Adam Smith revealed in a postmortem blog post, running into engineering headwinds that made finding a product-market fit essentially impossible.

“We failed to deliver our vision of AI-assisted programming because we were 10+ years too early to market, i.e., the tech is not ready yet,” Smith said. “Our product did not monetize, and it took too long to figure that out.”

Kite’s failure doesn’t necessarily bode well for the other companies pursuing — and attempting to commercialize — generative AI for coding. Smith estimated that it could cost over $100 million to build a “production-quality” tool capable of synthesizing code reliably. That said, Kite’s rivals, including GitHub, Tabnine and DeepCode, believe it’s premature to become bearish on the market.

Kitty Hawk

Sebastian Thrun at TechCrunch Disrupt SF 2017. Image Credits: TechCrunch

Kitty Hawk had understandably high hopes when it launched in 2010. Founded by and piloted by self-driving car pioneer Sebastian Thrun, the eVTOL maker had some prominent backers, including, most notably, Google co-founder, Larry Page. In September, the startup announced its closure courtesy of a curt tweet, noting, “We have made the decision to wind down Kittyhawk. We’re still working on the details of what’s next.”

What comes next still isn’t entirely clear. Plenty of folks remain bullish on the eVTOL category, but Kitty Hawk couldn’t stick the landing. After flying 111 of its crafts a total of 25,000 flights, the firm shuttered that specific program, ultimately resulting in 70 layoffs. Further progress was made, “by 2022, however, the mission was less clear,” as Kirsten notes in her news report. A  commercial air taxi was apparently still in the works by the time the company began winding down operations in September.


drawing of empty office chair

Image Credits: Bryce Durbin / TechCrunch

In late June, Modsy, on online interior design services startup, abruptly ceased offering design services, laid off its designers and left customers with unfinished renovations and project orders in process. By July, Modsy had shut down entirely — a surprising turn of events for a startup that raised $72.7 million from investors including Comcast Ventures and NBCUniversal. So what went wrong?

Modsy took a major bottom-line hit on the logistics side during the pandemic as global supply chains ground to a halt. Amanda Kwan-Rosenbush, the former senior director of finance and accounting at Modsy, described shipping as a “significant cost” and said that Modsy’s furniture and décor partners often struggled with long delays.

But the e-design platform space is a tough nut to crack. Rivals like Laurel & Wolf and Homepolish shuttered in 2019, while Décor Aid, a smaller company, closed up shop in 2021.

Modsy made a series of aggressive cuts two years prior to its shutdown, slashing designer pay and reducing both salaried employees and its network of designers. Business of Home’s reporting revealed that the startup — in addition to piloting its own furniture line — at one point experimented with outsourcing design work to the Philippines and Bulgaria as a way to reduce operating expenses. But the pivots weren’t enough in the end to prevent Modsy’s demise. 


NopeaRide, Kenya’s first fully electric vehicle service, shut down in November after scaling to 70 vehicles and building a charging network all across Nairobi. It closed after parent company EkoRent Oy was unable to raise additional funding.

The closure came after the startup raised an undisclosed amount of funding since its 2018 launch. It was seeking to build more solar charging hubs in Nairobi and expand the radius in which it operated within.

Onward Mobility

blackberry grave

Image Credits: Bryce Durbin / TechCrunch

Some startup failures are unexpected from the outside. Others you can see coming from a mile away. In spite of once sharing a blog post titled, “Contrary to popular belief, we are not dead,” Onward Mobility wasn’t fooling anyone. The Austin-based firm entered the mobile scene with an already risky proposition: bringing the BlackBerry back once again. The titular firm behind the original line struggled for years and TCL’s revival didn’t last particularly long.

Onward promised things would be different this time. It announced its intentions to the world, fell completely silent for some time and less than two years later, admitted that rumors of its death were no longer greatly exaggerated. That news arrived approximately one month after the company was publicly insisting otherwise. It’s frankly extremely hard to launch a brand new company even when there isn’t a global pandemic. And it seems like a fairly safe bet that, 15 years after the first iPhone turned the market upside down, there just isn’t enough of an appetite in the U.S. to serve as the foundation of a brand new phone maker.


Real estate fintech startup Reali began its shutdown in August in a surprise move, considering it had just raised $100 million one year prior. After a boom in home buying, the real estate tech sector found itself struggling as inflation and mortgage interest rates climbed, leading to a major slowdown in the housing market.

Even as it was winding down, Reali described itself as “one of the pioneering companies to offer the ‘buy before you sell’ and ‘cash offer’ programs to homeowners.” It seems that even being a pioneer doesn’t guarantee success and the news left us — and our readers — wondering how companies can burn through so much cash, so fast.


store clerk assisting customer

Image Credits: Halfpoint Images / Getty Images

India-based ShopX filed for bankruptcy in August after failing to generate enough cash flow and running into challenges raising capital. The startup, which provided software to connect brands, retailers and in-person shoppers, had raised over $66 million in funding from Fung Group, NB Ventures and others, and was last valued at about $175 million. 

ShopX competed mainly with business-to-business vendors such as 1K Kirana Bazaar and SuperK but ventured into the business-to-consumer space in 2021, offering incentives — including cash back and cash-saving offers — to customers while they browsed their neighborhood kirana shops. (In India, “kirana” are small independently owned shops that make up a major part of India’s physical retail economy.) ShopX also rewarded purchases on select bike and car-related services, salon visits, grocery, medicines and more.


Graduation cap as a part of laptop; edtech investor survey 2022

Image Credits: Boris Zhitkov (opens in a new window) / Getty Images

Edtech has had a rough year. That rings especially true for Udayy, which shut down after raising millions from investors, reported the Economic Times. The Indian edtech sold live learning courses to kids, a use case that isn’t as bright as it used to be. As Natasha has said in the past, we now know that the startups that most enjoyed a pandemic-era boom are now the same startups facing difficult questions about how to navigate a not-so-looming downturn. The same venture capital rounds that allowed companies to expand their idea of what a total addressable market could look like, are the same tranches that may have forced an overspending and overhiring spree that now requires a correction.

Remembering the startups we lost in 2022 by Brian Heater originally published on TechCrunch

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Infosys Recognized as the Top Service Provider Across Nordics in the Whitelane Research and PA Consulting IT Sourcing Study 2023

Infosys Recognized as the Top Service Provider Across Nordics in the Whitelane Research and PA Consulting IT Sourcing Study 2023
PR Newswire
STOCKHOLM, March 31, 2023

Infosys achieves a notable rise in overall ranking in the Nordics with a customer…



Infosys Recognized as the Top Service Provider Across Nordics in the Whitelane Research and PA Consulting IT Sourcing Study 2023

PR Newswire

Infosys achieves a notable rise in overall ranking in the Nordics with a customer satisfaction score of 81 percent as compared to the industry average of 73 percent

STOCKHOLM, March 31, 2023 /PRNewswire/ -- Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in next-generation digital services and consulting, today announced that it has been recognized as one of the top service providers in the Nordics, achieving the highest awarded score in Whitelane Research and PA Consulting's 2023 IT Sourcing Study. The report ranked Infosys as the number one service provider and an 'Exceptional Performer' in the categories of Digital Transformation, Application Services, and Cloud & Infrastructure Hosting Services. Infosys also ranked number one in overall General Satisfaction and Service Delivery.

For the report, Whitelane Research and PA Consulting, the innovation and transformation consultancy, surveyed nearly 400 CXOs and key decision-makers from top IT spending organizations in the Nordics and evaluated over 750 unique IT sourcing relationships and more than 1,400 cloud sourcing relationships. These service providers were assessed based on their service delivery, client relationships, commercial leverage, and transformation capabilities.

Some of Infosys' key differentiating factors highlighted in the report are:

  • Infosys ranked as a top provider in the Nordics across key performance indicators on service delivery quality, account management quality, price level and transformative innovation.
  • Infosys' ranked above the industry average by 8 percent year-on-year, making it one of the top system integrators in the Nordics.
  • Infosys is positioned as a "Strong Performer" in Security Services and scored significantly above average on account management.

Arne Erik Berntzen, Group CIO of Posten Norge, said: "Infosys has been integral in helping Posten Norge transform its IT Service Management capabilities. As Posten's partner since 2021, Infosys picked up the IT Service Management function from the incumbent, successfully transforming it through a brand-new implementation of ServiceNow, redesigning IT service management to suit the next-generation development processes and resulting in a significant improvement of the overall customer experience. I congratulate Infosys for achieving the top ranking in the 2023 Nordic IT Sourcing Study."

Antti Koskelin, SVP & CIO at KONE, said: "Infosys has been our trusted partner in our digitalization journey since 2017 and have helped us in establishing best-in-class services blueprint and rolling-in our enterprise IT landscape over the last few years. Digital transformations need partners to constantly learn, give ideas that work and be flexible to share risks and rewards with us, and Infosys has done just that. I am delighted that Infosys has been positioned No. 1 in Whitelane's 2023 Nordic Survey. This is definitely a reflection of their capabilities."

Jef Loos, Head of Research Europe, Whitelane Research, said, "In today's dynamic IT market, client demand is ever evolving, and staying ahead of the curve requires a strategic blend of optimized offerings and trusted client relationships. Infosys' impressive ranking in Whitelane's Nordic IT Sourcing Study is a testament to their unwavering commitment to fulfilling client demands effectively. Through their innovative solutions and exceptional customer service, Infosys has established itself as a leader in the industry, paving the way for a brighter and more successful future for all."

Hemant Lamba, Executive Vice President & Global Head – Strategic Sales, Infosys said, "Our ranking as one of the top service providers across the Nordics in the Whitelane Research and PA Consulting 2023 IT Sourcing Study, endorses our commitment to this important market. This is a significant milestone in our regional strategy, and the recognition revalidates our commitment towards driving customer success and excellence in delivering innovative IT services. Through our geographical presence in the Nordics, we will continue to drive business innovation and IT transformation in the region, backed by a strong partner network. We look forward to continuing investing in this market to foster client confidence and further enhance delivery."

About Infosys

Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, in more than 50 countries, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace.

Visit to see how Infosys (NSE, BSE, NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India and the US, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2022. These filings are available at Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.



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mRNA-LNP Vaccine Development: Evaluation of Novel Ionizable Lipids

In this GEN webinar, our distinguished speaker Dr. Nicholas Valiante, will provide insights into designing, developing, and manufacturing mRNA vaccines…



Broadcast Date: April 12, 2023
Time: 8:00 am PT, 11:00 am ET, 16:00 CET

The success of the mRNA-LNP COVID-19 vaccines have clinically proven the modality of lipid-based nanoparticle delivery, demonstrating the possibilities for rapid design, development, and manufacturing of other promising genomic medicines.

Due to their modular nature, LNP excipients can be mixed, matched, and modified during formulation to improve immune responses. Similarly, the encapsulated mRNA can be optimized to improve translation efficiency and stability.

In this GEN webinar, our distinguished speaker Dr. Nicholas Valiante, will provide insights into designing, developing, and manufacturing mRNA vaccines to maximize performance. Dr. Valiante will expand on the process to evaluate and select ionizable lipids required for mRNA-LNP vaccines development.

A live Q&A session will follow the presentation, offering you a chance to pose questions to our expert panelist.

Nicholas Valiante, PhD
Chief Scientific Officer, President
Innovac Therapeutics

Precision Nanosystems logo

The post mRNA-LNP Vaccine Development: Evaluation of Novel Ionizable Lipids appeared first on GEN - Genetic Engineering and Biotechnology News.

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What Has Driven the Labor Force Participation Gap since February 2020?

The U.S. labor force participation rate (LFPR) currently stands at 62.5 percent, 0.8 percentage point below its level in February 2020. This “participation…



The U.S. labor force participation rate (LFPR) currently stands at 62.5 percent, 0.8 percentage point below its level in February 2020. This “participation gap” translates into 2.1 million workers out of the labor force. In this post, we evaluate three potential drivers of the gap: First, population aging from the baby boomers reaching retirement age puts downward pressure on participation. Second, the share of individuals of retirement age that are actually retired has risen since the onset of the COVID-19 pandemic. Finally, long COVID and disability more generally may induce more people to leave the labor force. We find that nearly all of the participation gap can be explained by population aging, which caused a significant rise in the number of retirements. Higher retirement rates compared to pre-COVID have had only a modest effect, while disability has virtually no effect.

The LFPR is defined as the ratio between workers in the labor force (either employed or unemployed) and the civilian, non-institutional population age 16 and older. As the chart below shows, the LFPR has been gradually declining since the early 2000s. It stayed relatively flat over the period 2014-19 and even slightly rose up to February 2020 as the strong labor market exerted a positive effect on labor supply. After a dramatic decline in the early months of the pandemic, participation has recovered gradually but remains significantly below its pre-COVID level—by 0.8  percentage point or 2.1 million workers as of February 2023. We examine potential drivers of the participation gap using the Current Population Survey (CPS), a monthly survey of about 60,000  households that is conducted by the Bureau of Labor Statistics (BLS).

The Labor Force Participation Rate (LFPR) Remains below its Pre-Pandemic Level

Liberty Street Economics chart showing the LFPR has declined gradually since the early 2000s. It also stayed relatively flat from 2014-19 and rose slightly until February 2020. After a steep decline in the early months of the pandemic, participation has recovered gradually but remains 0.8 pp below its pre-COVID level.
Sources: Current Population Survey; Bureau of Labor Statistics.
Notes: The chart shows the seasonally adjusted LFPR for the population aged 16+ years. The red dashed line illustrates the size of the shortfall between 2020:m2 and 2023:m2.

Population Aging

We first analyze population aging. As noted elsewhere, the panel chart below illustrates that as the baby boomer cohort has reached the retirement threshold, retirements have increased dramatically. The left panel shows the distribution of the U.S. population in 2009. Each gray bar shows the number of individuals of a given age in the U.S. population from U.S. Census data. The blue bars show the number of workers in that age group who are retired. We indicate the baby boomer cohort, that is, those workers born between 1946 and 1964, by the gray shaded area, and mark the retirement age of 65 years by the vertical red line. The left panel shows that in 2009 the baby boomers were just beginning to enter retirement.

Baby Boomer Retirements Have Increased Dramatically over Time

Two-panel Liberty Street Economics chart showing retirements have increased dramatically as the baby-boomer cohort has reached the retirement threshold. The left panel shows the distribution of the U.S. population in 2009, while the right panel shows the same distribution in 2022.
Sources: U.S. Census Bureau; Current Population Survey (CPS); authors’ calculations.
Notes: The gray bars show the U.S. population of a given age. The blue bars show the estimated number of retirees at each age, computed from the share of retired workers at each age from the CPS. The red vertical line indicates the normal retirement age of 65 years. The gray shaded area indicates the ages corresponding to the baby boomer cohort, that is, those individuals born between 1946 and 1964.

The right panel of the chart shows the same distribution in 2022. By 2022, a large share of the baby boomer generation had entered retirement, leading to a significant increase in the number of individuals retired, as indicated by the blue bars.

Retirements within Specific Age Groups Have Increased Compared to Pre-Pandemic Levels

We next examine retirements within age groups in more detail. The previous chart suggests that retirement shares by age group have risen only modestly, as shown by the height of the blue bars relative to the gray bars. To substantiate this point, we break the population into groups of individuals aged 60-69, 70-79, and over 79. We focus on individuals aged 60 and older since these account for more than 90 percent of all retirees in the United States. For those aged 60-69, the retirement share has risen from an average of 39.7  percent in 2018-19 to 40.0 percent over the second half of 2022. The retirement share for those aged 70-79 has increased from 77.5 percent in 2018-19 to 78.8 percent in the more recent period. Finally, among those over 79, the retirement share has gone up from 88.5 percent to 90.5 percent. Here we consider the average over 2018-19 as our pre-pandemic reference point to remove shorter-term movements in the retirement shares.

How does this change in retirement behavior affect overall retirements? The share of retired workers in the U.S. population has risen substantially, from an average of 18 percent in 2018-19 to nearly 20 percent at the end of 2022. However, once we control for the overall aging of the population, the changes in the age-specific retirement shares reported above imply an increase in the overall share of retirees in the population of only about 0.3  percentage point.

Share of Workers with Disability and Not in the Labor Force Has Actually Fallen

We finally analyze the effect of disability on the participation gap. To capture a broad notion of disability, we focus on a set of six questions in the CPS that ask respondents whether because of a physical, mental, or emotional condition they have serious difficulty concentrating, remembering, or making decisions.

We start by considering the number of disabled individuals in the labor force as a share of the total population. The share of workers with disability (based on the above definition) rose from an average of 2.5 percent of the population in 2018-19 to about 2.9 percent in the last six months of 2022. While the rise in disability among workers in the labor force may have implications for the intensity of work effort, a recent study has found relatively little change in average hours worked by workers with disability. Therefore, there may be relatively little effect on the LFPR since these workers are still in the labor force. For this reason, we focus on the share of disabled individuals not in the labor force. This share has risen slightly, from about 9.2 percent in 2018-19 to 9.4 percent in the second half of 2022. Once we adjust for aging, we find that the share of disabled individuals not in the labor force has, in fact, marginally declined. This result arises because disability shares have slightly fallen for the older age groups.

Impact on Labor Force Participation

How have the three channels affected labor force participation? We first analyze the impact of population aging in isolation by constructing a counterfactual LFPR that keeps constant the share of the population in each age group at February 2020 levels. The gold line in the chart below shows this age-adjusted participation rate. Removing the effect of aging can explain the entire participation gap, lifting LFPR by 0.9 percentage point in February 2023. This big effect arises because the large baby boomer cohort is right at the retirement cutoff. As the chart above shows, the retirement share rises dramatically with age around the age of 65. Consequently, the aging of the baby boomers between 2020 and 2022 led to a significant rise in retirements, reducing participation.

Second, we analyze the effect of excess retirements on participation, in addition to the effect of aging. To do so, we analyze how the overall age-adjusted retirement share would change if we went back to the retirement shares in each age group of 2018-19. In other words, we ask what LFPR would prevail if retirement behavior went back to pre-COVID levels, controlling for aging. Since about half of new retirees in 2020-22 were already out of the labor force prior to retirement (for example, a stay-at-home partner who transitions into retirement), we multiply the effect of excess retirement by one half. The red line in the chart below shows that additionally removing excess retirements increases LFPR by a further 0.2 percentage point in February 2023. This effect is smaller than in a recent study that finds a 0.6 percentage point effect. The difference arises mainly because we assume that only half of all excess retirees could return to the labor force, since the rest were already out of the labor force prior to retirement.

Finally, the increase in disability has virtually no effect on the participation gap because, as discussed above, the increase is entirely accounted for by individuals that remain in the labor force. We do not separately plot this effect on the chart below. Overall, our results imply that undoing the effects of population aging and excess retirements would raise the LFPR by 1.1 percentage point from 62.5 percent to 63.6 percent, more than making up for the participation gap.

Participation Rate Is Higher after Adjusting for Aging and Excess Retirements

Liberty Street Economics chart showing the headline labor force participation rate reported by the Bureau of Labor Statistics, the counterfactual labor force participation rate that keeps the share of the population in each age group constant at February 2020 levels, and the surplus of retired workers in the recent period compared to 2018-19.
Sources: Current Population Survey; authors’ calculations.
Notes: The blue line shows the headline labor force participation rate (LFPR) reported by the Bureau of Labor Statistics. The gold line is the counterfactual LFPR holding fixed the population age structure in February 2020. The red line further adds the surplus of retired workers in the recent period compared to 2018-19, at the fixed age structure of February 2020.


In this blog post we show that demographic trends, specifically population aging, exert a powerful influence on labor force participation. In other words, the participation gap largely disappears once we control for population aging, indicating that participation has recovered a great deal since the large shock induced by the pandemic. Other possible contributing factors, such as elevated retirement rates or disability, play only a minor role in explaining the participation gap. Population aging is likely to continue to exert strong downward pressure on participation going forward, as more of the baby boomer generation continue to enter retirement.

Chart data

Mary Amiti is the head of Labor and Product Market Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

Sebastian Heise is a research economist in Labor and Product Market Studies in the Federal Reserve Bank of New York’s Research and Statistics Group. 

Giorgio Topa is an economic research advisor in Labor and Product Market Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

Julia Wu is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

How to cite this post:
Mary Amiti, Sebastian Heise, Giorgio Topa, and Julia Wu, “What Has Driven the Labor Force Participation Gap since February 2020?,” Federal Reserve Bank of New York Liberty Street Economics, March 30, 2023,

The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).

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