The Cyclical Behaviour of the Labour Force Participation Rate in Australia

Richard Evans, Angus Moore and Daniel Rees

Australian Economic Review, 2019, vol. 52, issue 1, 94-106

Abstract: We examine the cyclical relationship between labour market participation and economic activity in Australia. We find that the participation rate has a large and economically meaningful cyclical component. By cohort, the participation rates of young people, 25−54 year‐old females and older males are the most responsive to changes in economic conditions. If the participation rate did not adjust, expansions would be more inflationary; on the other hand, recessions would be more disinflationary and lead to larger increases in involuntary unemployment.

Date: 2019
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