Labour Force Participation and the Business Cycle: A Comparative Analysis of Europe, Japan and the United States

Julia Darby (), Robert A. Hart () and Michela Vecchi ()

Working Papers from Department of Economics, University of Glasgow

Abstract: Using OECD data from 1970 until 1995, we estimate systems of labour force participation equations, disaggregated by age and sex, for the United States, Japan, France and Sweden. We simulate the path of participation rates following shocks to GDP and also test for asymmetric responses to shocks occurring in upward and downward phases of the cycle. Our methodology is especially pertinent to the issue of hidden unemployment and the "discouraged worker effect". We find that this effect is essentially a female phenomenon with a particular concentration among 45 to 54 year olds.

Keywords: Participation rates; business cycle; asymmetric responses; discouraged worker effects (search for similar items in EconPapers)
JEL-codes: J21 E32 (search for similar items in EconPapers)
Date: Written
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Persistent link: http://EconPapers.repec.org/RePEc:gla:glaewp:9802

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