Why is US labour supply so tight?

Goldman Sachs has released a new paper entitled “Why is US Labor Supply so Low?”, which is leading to wage pressures:

Goldman shows that US labour force participation rate has declined more since 2019Q4 than in most other developed economies:

Goldman ascribes four main drivers of the US’ low participation rate:

1. About one-half of the US labour force participation rate shortfall is attributed to generous fiscal support, which has likely discouraged labour supply.
2. About one-third of the shortfall is attributed to the way in which fiscal support was delivered via generous unemployment benefits instead of job retention schemes.
3. Roughly one-sixth of the shortfall is attributed to virus fears.