In March, 496,000 gave up on working

Americans' participation in workforce falls to 63.3%

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WASHINGTON -- After a full year of fruitless job hunting, Natasha Baebler just gave up.

She'd already abandoned hope of work in her field. But she couldn't land even a job interview at a call center.

Until she feels confident enough to send out résumés again, she'll get by on food stamps and Social Security disability checks and live with her parents in St. Louis.

"I'm not proud of it," says Baebler, who is in her mid-30s and is blind. "The only way I'm able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on."

Baebler's frustration is all too common nearly four years after the Great Recession ended: Many Americans have given up on the job market.

Older Americans have retired early. Younger ones have enrolled in school. Others have suspended their job hunt until the employment landscape brightens. Some, like Baebler, are collecting disability checks.

It isn't supposed to be this way. After a recession, an improving economy is supposed to bring people back into the job market.

Instead, the number of Americans in the labor force -- those who have a job or are looking for one -- fell by nearly half a million people from February to March, the government said Friday. And the percentage of working-age adults in the labor force -- the participation rate -- hit 63.3 percent last month, its lowest since May 1979.

The participation rate peaked at 67.3 percent in 2000. It's been falling steadily ever since.

Part of the drop reflects Baby Boomers' gradual move into retirement. But even Americans of prime working age -- 25 to 54 years old -- are dropping out of the workforce. Their participation rate fell to 81.1 percent last month, tied with November for the lowest since December 1984.

People without a job who stop looking for one are no longer counted as unemployed. If the 496,000 who left the labor force last month had kept looking, the unemployment rate, which dropped to a four-year low of 7.6 percent in March from 7.7 in February, would have been 7.9 percent in March.

Cynthia Marriott gave up her job search after an interview in October for a position as a hotel concierge. "They never said no. They just never called me back."

Her husband hasn't worked full time since 2006. She cashed out her 401(k) after being laid off from a job at a Los Angeles entertainment publicity firm in 2009. The couple owe thousands in taxes for that withdrawal. They have no health insurance. She got the maximum 99 weeks of unemployment benefits then allowed in California, then moved to Atlanta.

Now she hopes for federal disability benefits for a lung condition that she said leaves her too weak to work a full day. The application is pending medical review.

"I feel like I have no choice," says Marriott, 47.

At the peak of her job search, Marriott was filling out 10 applications a day. She applied for jobs she felt overqualified for, such as at Home Depot and Petco, but never heard back. Eventually, the disappointment and fatigue got to her.

"I just wanted a job," she says. "I couldn't really go on anymore looking for a job."

Young people are leaving the job market, too. The participation rate for Americans ages 20 to 24 hit a 41-year low -- 69.6 percent -- last year before bouncing back a bit. Many young people have enrolled in community colleges and universities. That's one reason a record 63 percent of adults ages 25 to 29 have spent at least some time in college, according to the Pew Research Center.

Older Americans are returning to school, too. Doug Damato, 40, of Asheville, N.C., lost his job as an installer at a utility company in February 2012. He stopped looking for work last fall, and began taking classes in mechanical engineering at Asheville-Buncombe Technical Community College.

Next week, Damato will accept an academic award for earning top grades. But under a new state law, his unemployment benefits will now end July 1, six months earlier than he expected.

He's hoping he can work nights to support himself. Dropping out of school is "out of the question," he said, given the time he has put in. "I don't want a handout," he says. "I'm trying to better myself."

Nearly 8.9 million Americans receive Social Security disability checks, up 1.3 million from when the recession ended in June 2009.

Natasha Baebler's journey onto the disability rolls began when she lost her job serving disabled students and staff at Purdue University in West Lafayette, Ind., in February 2012.

For six months, she sought jobs in her field, brandishing master's degrees in social education and counseling. No luck.

Then she just started looking for anything. Still, no takers.

"I chose to stop and take a step back for a while. ... After you've seen that amount of rejection," she says, "you start thinking, 'What's going to make this time any different?'"