What drives labor force participation rate variability? The case of West Virginia

Josh Beverly, Shamar Stewart and Clinton L. Neill

Economic Modelling, 2024, vol. 140, issue C

Abstract: This study examines the dynamics of labor force participation rates across counties in West Virginia to better understand local labor market integration and the factors influencing fluctuations in participation. Drawing on county-level data from January 1990 to July 2020, the research employs a dynamic factor model to decompose labor force participation rates into latent factors at the state, metropolitan/non-metropolitan, and county levels. The findings reveal a general lack of labor market integration across West Virginia, highlighting potential opportunities for growth through enhanced integration. Further analysis using panel data models identifies key determinants of labor force participation, including personal income, education, infrastructure, and the prominence of industries such as agriculture and natural gas. The results underscore the necessity for targeted county-level policies to bolster employment and promote economic expansion within the state.

Keywords: Labor force participation; Dynamic factor model; Metro/non-metro; Bayesian analysis; Time series analysis (search for similar items in EconPapers)
JEL-codes: C11 C32 C38 J01 J21 P25 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:140:y:2024:i:c:s0264999324002189

DOI: 10.1016/j.econmod.2024.106861

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