David Altig says yes. He also reviews a recent paper by Stephanie Aaronson, Bruce Fallick, Andrew Figura, Jonathan Pingle and William Wascher entitled The Recent Decline in Labor Force Participation and its Implications for Potential Labor Supply that gives evidence that David may have a point. David cites a couple of paragraphs that might support the premise that the fall in labor force participation was driven by real business cycle factors, but also note the opening paragraph of the paper’s conclusion:
In this paper, we have reviewed an array of evidence pertaining to the sources of the persistent decline in the aggregate labor force participation rate since 2000.
In broad terms, this evidence suggests that the business cycle initially played an important role in this decline, contributing to the sharp run-up in labor force participation in the late 1990s and to both the subsequent drop-off during the 2001 recession and the ensuing period of weak labor market performance over the next couple of years. However, the evidence also highlights a number of more structural factors that have contributed to a potentially longer-lasting downtrend in labor force participation.
In other words, the authors are not dismissing the Keynesian explanation as at least part of the story for the past few years. The debate continues.