Changes In Labor Force Participation Research Articles

Educational Expansion as a Driver of Longer Working Lives?

This study investigates the contribution of educational expansion to changes in labour force participation among Europeans aged 55-74 between 2000 and 2019, while accounting for changes in educational inequalities in labour market activity. We use data from the European Union Labour Force Survey (EU-LFS) for 26 countries and Kitagawa-Oaxaca-Blinder decomposition methods to analyse the extent to which changes in the education structure may account for rises in labour force participation rates among older workers in these countries, and the degree to which returns to education have changed. Overall, we found that educational expansion is positively associated with increases in labour force participation, albeit with substantial cross-country variation in the scale of this association. A driving factor was the decrease in the share of the population with low education levels, followed by an increase in the share of those with high education levels. While activity rates rose in most countries and among all levels of education, the largest increases were observed among people with a medium level of education. Activity rates of low-educated older workers, especially women, grew at a substantially lower pace in some countries, exacerbating educational inequalities in labour force participation at older ages. The study suggests that educational expansion has been a driver of longer working lives in Europe. However, it also indicates that changes in health, working conditions and age norms at the microlevel, as well as pension and labour market reforms at the macrolevel, can be assumed to have played a dominant role in countries where increases in labour force participation were the most significant.

Labour supply and survivor insurance in the Netherlands

This paper investigates the effects of survivor benefits (SB) on the labour supply of widows. Using rich administrative data on the Dutch population and a reform that considerably restricted eligibility to SB, we identify the causal effect of SB on labour supply. Using a regression discontinuity design strategy based on the cohort-based implementation of the reform, we show that labour income after spousal death increased significantly following the reform (+110 euros, +23%). The effects are driven by changes in labour force participation and hours worked by widows. We also find evidence of program substitution, with widows relying more on disability, unemployment and welfare benefits as a result of the reform. This increase in alternative benefits further limits the reduction in total income caused by the reform by an average of 60 euros. Regarding the heterogeneity of the labour supply response, we find that widows with a relatively higher need for self-insurance increase their labour supply relatively more.

Widening Health Gap in the US Labor Force Participation at Older Ages

Abstract Using microdata from the CPS and the HRS, we document changes in labor force participation at older ages in the USA since the mid-1990s. Our main finding is that the over two-decade increase in participation is solely driven by individuals in good health, and does not differ across either educational or occupational groups. This phenomenon may importantly affect the results of social security reforms aiming at raising the mandatory retirement age and may exacerbate the health gap in lifetime earnings. (JEL codes: J22 and I14)

New Role, New Paycheck: The Impact on Women's Wages When Becoming a Caregiver for an Aging Parent.

Objectives: While prior research demonstrates the negative impacts of adult caregiving on women's employment, less research examines how women's employment changes when beginning a new caregiving role. Methods: Using data from eight waves of the Health and Retirement Study (2004-2018), I examine changes in women's employment when first transitioning into parental caregiving between the ages of 50-60, by analyzing changes in labor force participation, work hours, and hourly wages. Results: The transition into parental caregiving was not associated with women exiting the workforce or decreasing their work hours. However, caregivers did experience a decrease in inflation-adjusted hourly wages compared to non-caregivers, with the greatest wage penalties associated with high-intensity caregiving situations. Conclusion: Results demonstrate how parental caregiving may act as a shock to women's financial health at a critical career stage. This study highlights the less visible, but detrimental, financial consequences women experience when taking on a family caregiving role.

Labor force participation during COVID-19 and risk of depression: a Danish register study.

COVID-19 caused economic insecurity for businesses and their employees. Understanding effects of changes in labor force participation on depression risk during economic recession is fundamental for early diagnosis. The study evaluates if changes in labor force participation are associated with depression risk during COVID-19 in Denmark. A register-based longitudinal study of Danes aged 25-67 years without depression 2 years prior to baseline defined as February 2020. An eight-level categorical variable on stable or changing labor force participation was defined from monthly employment percentage gradients in the Danish Register-based Evaluation and Marginalization Database from February 2020. The cohort was followed until 31 December 2020 for depressions overall and mild-, moderate- and severe depression. Sex-stratified cox regression models with hazard ratios (HR) and 95% confidence intervals (95% CI) were performed accounting for important confounders. In total, 1 619 240 (50.3%) men of mean age 45.6 years and 1 598 587 (49.7%) women of mean age 45.9 years were included. Becoming unemployed implied an increased HR of depression in men (HR 2.02; 95% CI 1.94-2.10) and women (2.19; 2.12-2.26) compared to a steady-state full-time employment. Being outside the labor force or employed part-time implied an elevated HR in men (3.02; 2.82-3.23 and 2.41; 2.35-2.48) and women (3.13; 2.30-3.31 and 2.30; 2.26-2.35), respectively, compared to a steady-state full-time employment. Changes in labor force participation were associated with higher risk of depression relative to a steady-state full-time employment particularly among individuals with low labor force participation during COVID-19.

The rising child penalty in China

The falling female labor force participation rate in China has raised the attention of labor economists and policymakers. In light of this, this paper documents the changes in labor force participation of mothers relative to fathers around first births (referred as the “child penalty”) in China from 1982 to 2015 using a pseudo event study approach. Our findings show that child penalty for Chinese women has not only been steadily increasing, but also persists over years. This pattern cannot be solely explained by the lifted birth quota since the implementation of the one-child Policy. We further show that the increasing child penalty coincides with the decreasing number of public kindergartens after the state-owned enterprise (SOE) reform. Using a standard Oaxaca-Blinder decomposition approach, we also find evidence of a high percentage of child-related gender inequality in labor force participation.

How should monetary policy respond to a contraction in labor supply?

Conventional wisdom holds that a central bank should tighten monetary policy after a surprise decline in labor supply to offset the inflationary effects of the decline. However, this policy prescription comes from models of monetary policy that abstract from labor force participation. We examine the policy implications of worker entry into and exit from the labor force. We find that cyclical changes in labor force participation call for a less restrictive policy response to a decline in labor supply. The less restrictive policy response is appropriate because policy tightening reduces the labor force and thus raises wage growth. The optimal policy response dampens the reduction in the labor force and brings about a period of higher inflation.

Inflation, Unemployment and Labor Force Change in Indonesia: What Does the Connection?

The issue of relationship between inflation and unemployment is one of the topics which have been discussed for long time. Philips Theory says that inflation rate has a relationship to unemployment rate, it becomes very interesting to observe the data of Indonesian Phenomena refer to the above theory therefore, this objective of this paper is to narrow the gap in literature by examining the long-run relationship between the change of labor force level, LF (t), inflation, ? (t), unemployment, UE (t), in Indonesia. It also to investigate the individual relationship between the change rate of LF and inflation, and change rate of LF and unemployment. Therefore, we use two different methods to test the cointegration. First is the Engle Granger approach based on the unit root test in the residuals of linear regression, which also includes a number of specification tests, Second method is the Johansen cointegration rank test based on a VAR representation, which is also proved to be an adequate one via a set of appropriate tests. This study used vector time series analysis to analyze the linear lag relationship between inflation, unemployment rate and the change in labor force participation. Under the empirical framework, the study adopted Vector Auto Regression (VAR) model. Results of this research, It is obtained from the Pearson correlation coefficient (correlation Pearson coefficient =0.059, for a significance level at 12% higher than the 5% the chosen one), that between the two variables there is a direct negative relationship, but of a very low and statistically insignificant medium intensity. This fact tell us to state that in the long run (23 years) between inflation and unemployment in Indonesia there is no significant relation. On the other hand, we noticed that there is also direct significant relationship between inflation and labor change. The Pearson coefficient = 0.080 for a significant level; at 13.5% greater than 5% from the chosen one, Which means that only 9.5% of the change in labor force was influenced by inflation. This denotes a very low and statistically insignificant medium intensity.

Longitudinal changes in employment following a diagnosis of endometriosis: Findings from an Australian cohort study

Endometriosis is a chronic inflammatory disease affecting the reproductive, gastrointestinal, and urinary systems. We examined changes in labor force participation amongst women with endometriosis following diagnosis. We analyzed data from 4494 women born in 1973-78 from the Australian Longitudinal Study on Women's Health. We used multinomial logistic regression models with generalized estimating equations to examine changes in labor force participation amongst 468 women with surgically confirmed endometriosis, and 375 women with clinically suspected endometriosis, relative to a comparison group of 4151 women without endometriosis. At diagnosis, women with surgically confirmed endometriosis were somewhat more likely to be working part-time (OR 1.26, 95% CI 0.94-1.68) or unemployed (OR 1.46, 95% CI 0.96-2.23) than before diagnosis. After diagnosis, women with surgically confirmed endometriosis remained somewhat more likely to be working part-time (OR 1.26, 95% CI 0.88-1.80) but were significantly more likely to be unemployed (OR 1.85, 95% CI 1.16-2.96) than before diagnosis. Labor force participation for women with clinically suspected endometriosis did not differ from women without endometriosis at diagnosis and did not change over time. Women with surgically confirmed endometriosis transitioned out the labor force following diagnosis. Supportive workplace practices may help women remain in the labor force.

Inflation, Unemployment and Labor Force Change in Indonesia: What Does the Connection?

The issue of relationship between inflation and unemployment is one of the topics which have been discussed for long time. Philips Theory says that inflation rate has a relationship to unemployment rate, it becomes very interesting to observe the data of Indonesian Phenomena refer to the above theory therefore, this objective of this paper is to narrow the gap in literature by examining the long-run relationship between the change of labor force level, LF (t), inflation, ? (t), unemployment, UE (t), in Indonesia. It also to investigate the individual relationship between the change rate of LF and inflation, and change rate of LF and unemployment. Therefore, we use two different methods to test the cointegration. First is the Engle Granger approach based on the unit root test in the residuals of linear regression, which also includes a number of specification tests, Second method is the Johansen cointegration rank test based on a VAR representation, which is also proved to be an adequate one via a set of appropriate tests. This study used vector time series analysis to analyze the linear lag relationship between inflation, unemployment rate and the change in labor force participation. Under the empirical framework, the study adopted Vector Auto Regression (VAR) model. Results of this research, It is obtained from the Pearson correlation coefficient (correlation Pearson coefficient =0.059, for a significance level at 12% higher than the 5% the chosen one), that between the two variables there is a direct negative relationship, but of a very low and statistically insignificant medium intensity. This fact tell us to state that in the long run (23 years) between inflation and unemployment in Indonesia there is no significant relation. On the other hand, we noticed that there is also direct significant relationship between inflation and labor change. The Pearson coefficient = 0.080 for a significant level; at 13.5% greater than 5% from the chosen one, Which means that only 9.5% of the change in labor force was influenced by inflation. This denotes a very low and statistically insignificant medium intensity

Moving closer? Comparing regional adjustments to shocks in EMU and the United States

This paper analyzes alternative channels of adjustment to nominal exchange rate flexibility in response to shocks faced by countries and regions that are part of a monetary union. Over our full sample period of analysis (1977–2018), the results suggest a dominant role of interstate migration as an adjustment channel to labor demand shocks for the United States. In contrast, European countries tend to adjust to negative labor demand shocks mainly through changes in labor force participation and unemployment. Labor mobility is lower in the euro area, regardless of whether one is looking at cross-country migration or within-country mobility. Price flexibility is more important as a shock absorber to labor demand shocks in the EMU compared to the United States. We also document that risk-sharing mechanisms have been, on average, more effective in smoothing income fluctuations in the United States than in the EMU. The strength of these channels, however, has changed over time both for the EMU and in the United States. In particular, the results suggest that the pattern of regional adjustments to shocks in EMU and the United States is moving closer, partly because of strengthening of adjustment channels in the EMU and partly because of weakening of these channels in the United States.

The future of work: Meeting the global challenges of demographic change and automation

AbstractThis article explores future job creation needs under conditions of demographic, economic and technological change. The authors first estimate the implications for job creation during 2020–30 of population growth, changes in labour force participation and the achievement of target unemployment rates, by age and sex. Second, they analyse the job creation needs by country income group and, lastly, examine the effects of accelerated automation. Projections indicate that shifting demographics will account for a far greater share of the estimated global need for 340 million jobs over 2020–30 than automation.

A systematic review of causes of recent increases in ages of labor market exit in OECD countries

Ages of labor market exit have increased steadily since the late 1990s in OECD countries, but with continuing population aging, there are calls for further stimulation of labor force participation at older ages. Social scientists have extensively studied causes of variation in retirement timing between individuals and across countries, but have paid less attention to causes of variation over time. This study systematically reviews evidence of causes of increases in ages of labor market exit over the past 30 years in OECD countries. Two goals are pursued: first, to provide an overview of the retirement domains that have been subject to investigation; second to compare studies with respect to the magnitude of change in retirement behavior that they attributed to different causes, in different contexts. Nineteen studies were reviewed. Available evidence articulates itself around four domains: inter-cohort changes in labor force participation of women (3 studies), educational attainment (3 studies) and lifetime wealth (1 study), and changes to social security systems (16 studies). Determinants in all domains explain a significant amount of past increases in ages of labor market exit, though figures attributable to similar determinants vary between studies and across countries. Evidence suggests that further postponement of labor market exit may depend on further increases to normal retirement ages and more limited access to early retirement programs, but also on further increases in educational attainment and the continued integration of women in the labor market. However, a large share of the past increases in ages of labor market exit remains unexplained; therefore, other factors such as those related to work and organizational characteristics deserve further research.

Population aging, migration, and productivity in Europe

This paper provides a systematic, multidimensional demographic analysis of the degree to which negative economic consequences of population aging can be mitigated by changes in migration and labor-force participation. Using a microsimulation population projection model accounting for 13 individual characteristics including education and immigration-related variables, we built scenarios of future changes in labor-force participation, migration volumes, and their educational composition and speed of integration for the 28 European Union (EU) member states. We study the consequences in terms of the conventional age-dependency ratio, the labor-force dependency ratio, and the productivity-weighted labor-force dependency ratio using education as a proxy of productivity, which accounts for the fact that not all individuals are equality productive in society. The results show that in terms of the more sophisticated ratios, population aging looks less daunting than when only considering age structure. In terms of policy options, lifting labor-force participation among the general population as in Sweden, and education-selective migration if accompanied by high integration, could even improve economic dependency. On the other hand, high immigration volumes combined with both low education and integration leads to increasing economic dependency. This shows the high stakes involved with integration outcomes under high migration volumes.

The Future of Work: Challenges for Job Creation Due to Global Demographic Change and Automation

We explore future job creation needs under conditions of demographic, economic, and technological change. First, we estimate the implications for job creation in 2020–2030 of population growth, changes in labor force participation, and the achievement of plausible target unemployment rates, disaggregated by age and gender. Second, we analyze the job creation needs differentiated by country income group. Finally, we examine how accelerated automation could affect job creation needs over the coming decades. Overall, shifting demographics, changing labor force participation rates, reductions in unemployment to the target levels of 8 percent for youth and 4 percent for adults, and automation combine to require the creation of approximately 340 million jobs in 2020–2030.

A Scenario Analysis of Future Hong Kong Age and Labour Force Profiles and its Implications

Summary The consequences of reduced fertility and mortality on the age distribution are an issue for most developed countries, but especially for the ‘Asian tiger’ economies. We use functional data analysis forecasting techniques to project the population of Hong Kong. Our projections include error estimates that allow for forecasting error as well as exogenous variations of fertility and migration numbers. We separate out the effects of pure demographic shifts from projected behavioural changes in labour force participation. This enables us to look at the kinds of changes in labour force participation that would be required to offset the aging effects that we estimate.

Age, Cohort, and Social Change: Parental and Spousal Education and White Women's Health Limitations From 1967 to 2012.

A large body of research finds that the association between educational attainment and health is at historic highs for White women. Rapid changes in labor force participation, access to high-paying jobs, and gender attitudes have radically altered the meaning of education for women's lives and their dependence on the socioeconomic attainments of their families. Drawing on three nationally representative longitudinal surveys conducted from 1967 to 2012, this study examines how personal, parental, and spousal attainments contribute to the widening education gap in health for successive cohorts of White women ( N = 8,405). Overall, the health of women did not change substantially across cohorts, but results did uncover cohort differences among low-educated women that were linked to parental and spousal educational attainments and personal earnings. These findings confirm growing educational inequalities in health and demonstrate the importance of historical context and family attainments when examining cohort variation in the education-health relationship.

Can education compensate the effect of population ageing on macroeconomic performance?

This paper investigates the consequences of population ageing and of changes in the education composition of the population for macroeconomic performance. Estimation results from a theoretically founded empirical framework show that ageing as well as the education composition of the population influence economic performance. The estimates and simulations based on population projections and different counterfactual scenarios show that population ageing will have a substantial negative consequence for macroeconomic performance in many countries in the years to come. The results also suggest that education expansions tend to offset the negative effects, but that the extent to which they compensate the ageing effects differs vastly across countries. The simulations illustrate the heterogeneity in the effects of population ageing on economic performance across countries, depending on their current age and education composition. The estimates provide a method to quantify the increase in education that is required to offset the negative consequences of population ageing. Counterfactual changes in labour force participation and productivity required to neutralise ageing are found to be substantial.

Severity of Airflow Obstruction and Work Loss in a Nationwide Population of Working Age

The impact of COPD severity on labor force participation and work loss is not well known. This study aimed to describe the characteristics of occupations and to evaluate the reason for work loss based on the severity of airflow obstruction (AO). We performed a cross-sectional study using data from the Korean National Health and Nutrition Examination Survey V−VI. We identified 9,901 people aged 40 to 60 years who had normal or AO in spirometry test results. AO was defined as a pre-bronchodilator forced expiratory volume in 1 second/forced vital capacity <70%. AO was present in 7.6% of the subjects, and 81.5%, 82.9%, and 71.6% of subjects with mild, moderate, and severe-to-very severe AO were in the labor force, respectively. Multivariable analyses revealed that severe-to-very severe AO subjects were more likely to have precarious job (adjusted OR = 4.71, 95% CI = 1.70–13.06) and cite health-related problem as the reason for not being in the labor force (adjusted OR = 3.38, 95% CI = 1.03–11.02). Overall, AO was not associated with any significant changes in labor force participation. However, subjects with severe-to-very severe disease were more likely to drop out of the labor force owing to their health-related problems.

Decomposing and Predicting China's GDP Growth: Past, Present, and Future

This study investigated how different facets of demographic changes have played a role in the economic growth from a more holistic and dynamic perspective. We conducted a yearly decomposition on the growth rate of real GDP and GDP per capita during the period 1991-2015, by quantifying the contributions of four factors- the growth in population size, shifts in the age structure, changes in labor force participation, and improvement in labor productivity. Furthermore, we performed a scenario analysis to demonstrate how these factors can be modified to maintain a steady economic growth in the next 30 years. We found that population size, age structure and labor force participation have played different roles at various stages of development, while the labor productivity has always made the largest contribution throughout the study period. In 1991-2010, the negative impact caused by the reduction in labor force participation nearly offset the positive impact from the increasing working-age population. Besides, it is noteworthy that due to rapid population ageing in China, the contribution of age structure to GDP growth has turned from positive to negative in recently five years, signifying the arrival of demographic deficit and it is expected to worsen in a rapidly ageing society.