Discouraged Workers in Developed Countries and Added Workers in Developing Countries? Unemployment Rate and Labour Force Participation

Grace H.Y. Leea and Jaai Parasnis
Authors registered in the RePEc Author Service: Grace Hooi Yean Lee

No 15-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: Changes in the unemployment rate can have differing impacts on the labour force participation rate depending on the strength of the added worker effect and the discouraged worker effect. This paper documents the differences in the relationship between the unemployment rate and the labour force participation rate across a panel of developing countries and OECD countries. We employ a system GMM approach to control for and to establish the bi-directional causality between unemployment and labour force participation. We find that the discouraged worker effect does dominate in developed countries, while dominance of the added worker effect in developing countries leads to an increase in labour force in the face of rising unemployment.

Keywords: unemployment; labour force; system GMM; Granger causality; developing countries; OECD (search for similar items in EconPapers)
JEL-codes: C23 J21 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014-04
References: Add references at CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://www.buseco.monash.edu.au/eco/research/paper ... rkersleeparasnis.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.buseco.monash.edu.au/eco/research/papers/2014/1514workersleeparasnis.pdf [301 Moved Permanently]--> https://www.monash.edu/business/ [301 Moved Permanently]--> https://www.monash.edu/business)

Related works:
Journal Article: Discouraged workers in developed countries and added workers in developing countries? Unemployment rate and labour force participation (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mos:moswps:2014-15

Ordering information: This working paper can be ordered from
https://www.monash.e ... esearch/publications

Access Statistics for this paper

More papers in Monash Economics Working Papers from Monash University, Department of Economics Department of Economics, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Simon Angus ().