Trends in Labour Supply and Their Implications

Abstract

Antecedents The development of labour supply over the next fifteen years has its roots firmly implanted in the past. This dynamic characteristic of labour supply changes extends to labour force participation rates as well as to changes in labour supply attributable to purely demographic changes, so we shall initially examine both of these components of labour force change over the post‐war period. Changes in the size of the labour force which would occur as a result of changes in the age/sex structure of the population and the propensity of women to many if age/sex/marital status‐specific labour force participation rates were constant is denoted as demographic, and Table I shows its contribution to labour force growth in the post‐war period. The primary force behind the demographically‐induced change in the male labour supply is earlier movements in fertility, but both past fertility and contemporary marriage behaviour affect the magnitude of the demographically‐induced change in the female labour supply. In particular, up to the early 1970s the increase in the proportion of women under the age of 70 who are married restrained labour force growth because of the generally higher labour force participation rates of unmarried women; the size of this negative impact did, however, decline over time.