Asymmetric labor force participation decisions over the business cycle: evidence from U.S. microdata

Julie Hotchkiss and John Robertson

No 2006-08, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: The purpose of this paper is to explore the microfoundations of the observed asymmetric movement in aggregate unemployment rates. Using U.S. data, we find that individual labor force participation responds asymmetrically to changes in local labor market conditions, consistent with the pattern of movements in the aggregate unemployment rate. Differences in the asymmetry and sensitivity of labor force participation decisions are found across gender, age, and education groups, and these differences are used to anticipate changes in the aggregate movements as population characteristics change over time.

Date: 2006
New Economics Papers: this item is included in nep-bec and nep-mac
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