Drivers of Labor Force Participation in Advanced Economies Macro and Micro Evidence

Drivers of Labor Force Participation in Advanced Economies  Macro and Micro Evidence

Despite significant headwinds from population aging in most advanced economies (AEs), labor force participation rates show remarkably divergent trajectories both across countries and across different groups of workers.

Author: Francesco Grigoli

Publisher: International Monetary Fund

ISBN: 9781484364581

Category: Business & Economics

Page: 40

View: 781

Despite signicant headwinds from population aging in most advanced economies (AEs), labor force participation rates show remarkably divergent trajectories both across countries and across dierent groups of workers. Participation increased sharply among prime-age women and, more recently, older workers, but fell among the young and prime-age men. This pa- per investigates the determinants of these trends using aggregate and individual-level data. We nd that the bulk of the dramatic increase in the labor force attachment of prime-age women and older workers in the past three decades can be explained by changes in labor mar- ket policies and institutions, structural transformation, and gains in educational attainment. Technological advances such as automation, on the other hand, weighed on the labor supply of prime-age and older workers. In light of the dramatic demographic shifts expected in the coming decades in many AEs, our ndings underscore the need to invest in education and training, reform the tax system, reduce early retirement incentives, improve the job-matching process, and help individuals combine family and work life in order to alleviate the pressures from aging on labor supply.
Categories: Business & Economics

Labor Force Participation and Monetary Policy in the Wake of the Great Recession

Labor Force Participation and Monetary Policy in the Wake of the Great Recession

In this paper, we provide compelling evidence that cyclical factors account for the bulk of the post-2007 decline in the U.S. labor force participation rate.

Author: Christopher J. Erceg

Publisher: International Monetary Fund

ISBN: 9781484302606

Category: Business & Economics

Page: 60

View: 113

In this paper, we provide compelling evidence that cyclical factors account for the bulk of the post-2007 decline in the U.S. labor force participation rate. We then proceed to formulate a stylized New Keynesian model in which labor force participation is essentially acyclical during “normal times” (that is, in response to small or transitory shocks) but drops markedly in the wake of a large and persistent aggregate demand shock. Finally, we show that these considerations can have potentially crucial implications for the design of monetary policy, especially under circumstances in which adjustments to the short-term interest rate are constrained by the zero lower bound.
Categories: Business & Economics

Permanently Displaced Increasingly Disconnected Labor Force Participation in U S States and Metropolitan Areas

Permanently Displaced  Increasingly Disconnected  Labor Force Participation in U S  States and Metropolitan Areas

The United States stands out among advanced economies with marked declines in labor force participation.

Author: Benjamin Hilgenstock

Publisher: International Monetary Fund

ISBN: 9781484358122

Category: Business & Economics

Page: 26

View: 756

The United States stands out among advanced economies with marked declines in labor force participation. National averages furthermore conceal considerable within-country heterogeneity. This paper explores regional differences to shed light on drivers of participation rates at the state and metropolitan area levels. It documents a broad-based decline, especially pronounced outside metropolitan areas. Using novel measures of local vulnerability to trade and technology it finds that metropolitan areas with higher exposures to routinization and offshoring experienced larger drops in participation in 2000-2016. Thus, areas with different occupational mixes can experience divergent labor market trajectories as a result of trade and technology.
Categories: Business & Economics

Unemployment and Labour Force Participation Trends and Cycles

Unemployment and Labour Force Participation  Trends and Cycles

This paper deals with trends and cycles of unemployment and labour-force participation.

Author: Jorgen Elmeskov

Publisher: Organisation for Economic Co-operation and Development

ISBN: UCSC:32106011831853

Category: Economics

Page: 55

View: 390

This paper deals with trends and cycles of unemployment and labour-force participation. Empirical evidence on both trends and cyclical movements in unemployment and participation is presented. Some of the mechanisms behind the observed developments are also analysed, examining how well they fit into different theoretical frameworks. The implications for the assessment of labour market slack of the observed interplay between unemployment and participation are discussed. The paper ends by presenting some unexplained puzzles concerning the interplay between trends and cycles of unemployment and participation ...
Categories: Economics