Jobs Report Preview: Looking for a Labor Force Comeback How big should the American labor force be? It seems like an arcane academic question. But it is at the heart of whether the unemployment rate will fall in the February jobs report to be released Friday morning and, more important, whether it will keep on dropping throughout the year. Here is the issue: During the recession and the sluggish start to the recovery, companies laid off workers and froze hiring, driving the unemployment rate up. Hundreds of thousands of workers chose not to enter the job market or, discouraged, abandoned it. Older workers figured they might as well retire. Newly minted college graduates decided to get additional degrees rather than fight for low-wage jobs and live in their parents" basements. Workers who exhausted their 99 weeks of jobless benefits just gave up looking. Thus, the labor force participation rate - the percentage of Americans working or looking to work - has declined to its lowest level since the 1980s. The strengthening recovery has reignited a long-running debate about how many of those workers will come back - making the participation rate and the overall number of people in the labor force interesting numbers to keep an eye on in the next few jobs reports. Some economists argue that the unemployment rate could climb if hundreds of thousands of those workers decide the water is warm enough to re-enter. For instance, analysts at Nomura recently released a research note calculating the unemployment rate including discouraged workers, but not including workers who dropped out of the labor force to retire: 10.3 percent. The government calculates a similar statistic, the U-4 rate, with different criteria for discouraged workers, and found it to be 8.9 percent in January, seasonally adjusted. A faster-growing economy and lots of good economic headlines might draw those workers back, sending the unemployment rate up. But other economists argue that the notion that the recharged economy will translate into a rising unemployment rate is nothing but a myth. That is the case made by the Dean Maki, Troy Davig and Peter Newland of Barclays Capital in a research note released last week. "Our models indicate that demographics, specifically retirements among the baby boomers, have played a larger role in pushing the labor force participation rate down than have cyclical factors," they write. We see this trend continuing in coming years. The economists say that only a third of the drop in the participation rate is accounted for by people who want to work, and only about one-sixth by people of prime working age, from 25 to 54. Those people returning to the labor market won't mean an unemployment rate soaring back to 10 percent. For what it's worth, Washington's own economists split the difference. They expect re-entrants will slow the drop in the unemployment rate. But they do not expect the participation rate to snap back to its prerecession highs as the baby boomers continue to leave the labor force in droves.