Increase In Labor Force Participation Research Articles

Economic Growth and Equity Returns

It is widely believed that economic growth is good for stockholders. However, the cross-country correlation of real stock returns and per capita GDP growth over 1900-2002 is negative. Economic growth occurs from high personal savings rates and increased labor force participation, and from technological change. If increases in capital and labor inputs go into new corporations, these do not boost the present value of dividends on existing corporations. Technological change does not increase profits unless firms have lasting monopolies, a condition that rarely occurs. Countries with high growth potential do not offer good equity investment opportunities unless valuations are low.

‘The Mighty Pillar of the Family’: Young People's Vocabularies on Household Gender Arrangements in the Asia‐Pacific Region

In the light of women's increased labour force participation and the demands of western feminism for men's participation in housework and childcare, this article analyses vocabularies on these issues among young people in Australia, USA and Canada and seven countries in Asia. While very few young people in any of the samples use explicitly feminist justifications for their statements, there is high support for sharing housework when both partners are in paid work. By contrast, the strong support for role reversal — for men being ‘house husbands’— is confined to the western samples. The article explores reasons for these differences based in respondents’ domestic experiences and national family policies. Where many of the western respondents rely on equality or individualism, the Asian respondents are more likely to understand the role of the husband and wife in the context of their duties to each other and the nation or to assert the existence of gender differences between men and women.

Demographic Alternatives for Aging Industrial Countries: Increased Total Fertility Rate, Labor Force Participation, or Immigration

The paper investigates the demographic alternatives for dealing with the projected population aging and low or negative growth of the population and labor force in the North. Without further immigration, the total labor force in Europe and Russia, the high-income countries of East Asia and the Pacific, China, and, to a lesser extent, North America is projected to be reduced by 29 million by 2025 and by 244 million by 2050. In contrast, the labor force in the South is projected to add some 1.55 billion, predominantly in South and Central Asia and in Sub-Saharan Africa. The demographic policy scenarios to deal with the projected shrinking of the labor force in the North include moving the total fertility rate back to replacement levels, increasing labor force participation of the existing population through a variety of measures, and filling the demographic gaps through enhanced immigration. The estimations indicate that each of these policy scenarios may partially or even fully compensate for the projected labor force gap by 2050. But a review of the policy measures to make these demographic scenarios happen also suggests that governments may not be able to initiate or accommodate the required change.

The IMF on Policies Responding to Demographic Change

In its semiannual report World Economic Outlook, the International Monetary Fund presents its analysis of major economic policy issues and assessment of economic prospects, along with more detailed treatment of a selected current topic. The special topic in the 300‐page report published in September 2004 is “The Global Demographic Transition,” treated in Chapter III of the document. An excerpt from the section of that chapter titled “Policies to Meet the Challenges of Global Demographic Change” is reproduced below with the permission of the IMF. Footnotes and the figure included in the excerpt have been renumbered.The title of Chapter III is “How Will Demographic Change Affect the Global Economy?” The tone of the discussion is set by the opening epigraph, a quotation from the UK's 1949 Report of the Royal Commission on Population: “It seems possible that a society in which the proportion of young people is diminishing will become dangerously unprogressive, falling behind other communities not only in technical efficiency and economic welfare, but in intellectual and artistic achievement as well.” Accordingly, the focus of the analysis, like that of the commentary by US Federal Reserve Chairman Alan Greenspan reprinted in the preceding Document item in this issue, is on the consequences of population aging and on the desirable policy responses to that process. The discussion broadly parallels Greenspan's but with a wider compass, including some consideration of the effects of aging in developing countries. It emphasizes the need for counteracting adverse effects of demographic change through a combination of policy measures, since “the size of the reforms” (such as increasing labor force participation, inducing later retirement, and attracting more immigrants) “that would be needed in any single area [is] sufficiently large that they would be politically and economically difficult to achieve.”

Cute butts and housework: A gynocentric theory of assortative mating

In the 1992 screenplay for Sleepless in Seattle Tom Hanks's character, Sam, a recently widowed single father, is facing the dating pool after 14 years. I want to know what it's like over there, he asks his friend Jay. answer comes back, Pecs and a cute butt. ... You can't even turn on the news without hearing about how some babe thought some guy's butt was cute. ... good news is, split the check (Arch, Ephron, & Ephron, 1992). message is clear: It is a whole new world out there in the 1990s because requirements for potential mates are very different from what they used to be. On one hand, men have to measure up to compete. On the other hand, there are economic benefits for men now that women are working. Megan Sweeney and Maria Cancian's (2004) new approach to understanding the marriage market focuses solely on splitting the check and does not theorize evaluation of men-that is, new demand for cute butts and sharing the household labor. Put another way, the authors' economistic and androcentric approach neglects crucial sociological insights about changing gender and family relations-as well as rising social inequality-in the post-1965 period. Sweeney and Cancian's (2004) interesting and provocative article, The Changing Importance of White Women's Economic Prospects for Assortative Mating, asks a very important question for the understanding of family formation after the massive social change of increased labor force participation in the 20th century: How does new employed status alter their value to potential mates? Their careful, erudite analysis adds to the literature by starting a dialogue-using methods that have not been used before-about how best to specify a model of assortative mating in an era of wage-earning women. article investigates the effect of increased economic activity on their value to men as potential wives. Using data from the 1970 U.S. Census, the National Longitudinal Surveys of Young Women, and the National Longitudinal Surveys of Youth, they set out to test the hypothesis that women's earning capacity has become a more important factor over time (p. 1017). authors test this hypothesis by estimating husbands' expected earnings and occupational status as a function of wives' premarital wage rate for two cohorts: those marrying predominantly in the 1970s and those marrying in the late 1980s and 1990s. Unlike previous studies, their data are longitudinal and individual level, allowing them to look at assortative mating without the complexities of divorce, for example, or the endogeneity of spouses' earnings during marriage. On one hand, their model assumes that the quality of a husband is his economic value only, and that husbands' earnings are stable over time. A wife's quality, on the other hand, includes her economic and home production value, the latter of which, it turns out, cannot be measured. Results show that, as expected, premarriage wage is positively and significantly associated with men's expected earnings and occupational status in the late cohort when compared with the earlier cohort. Sweeney and Cancian (2004) are correct that the raw correlations they present in Table 2 of the article are insufficient to demonstrate their thesis that men's weights on economic value have changed. Many factors could be affecting the wages of men and women, and the raw correlation could be masking the movement of these factors within a single bundled measure. A simple example of this phenomenon is the role of education as a type of capital for women. Suppose that men have always placed the same high value on an educated wife as they do now, but historically there were fewer educated women. Over time, women have increasingly gained access to education, so now, more men can achieve their desire for a wife who is as educated as they are. At the same time, the earnings returns to education have increased. …

The added worker effect over the business cycle: evidence from urban Mexico

This paper investigates whether the added worker effect is an important determinant of the increased labour force participation by women and whether the magnitude of the added worker effect differs between the peak and trough of the business cycle. Use is made of repeated observations from spouses in urban Mexico, collected during the Peso crisis (1994:4–1995:4) and during the period of economic prosperity (1998:4–1999:4). Significant added worker effects are found in both periods. The magnitude of the added worker effect during the crisis period is found to be twice as large as that observed during the period of economic prosperity.

Ageing, Health Care and Retirement in Europe: Use of Health and Nursing Care by the Elderly

If the hypothesis that people live longer and in better health is true, it could be expected that the changes in the health of the elderly have important consequences for the further demand for health services, the need for long-term care and also for the development of health expenditures. But other trends could also be essential to determining the extent and structure of the demand for health care and health expenditures. In the case of long-term care, there are other important effects that concern the structure of health care and institutional settings. Most long-term care recipients currently live in households and their caregivers are predominantly members of the family – especially daughters, daughters-in-law and spouses. The increasing labour force participation of women may affect the future supply of informal family care-giving and may increase the demand for professional home care and institutional care. In all EU countries family structures are changing: the proportion of elderly persons living with their children has fallen.Projections on the use of health care and the need for long-term care require an analysis of the current situation in each EU country and a study of the determinants for using both (especially the influence of health). This paper, produced as part of the ENEPRI AGIR project, presents the results of data collection and analyses for EU countries that participated in the study – Belgium, France, Finland, the Netherlands, Spain, the UK and Germany. Additionally, data are provided for Denmark. Along with analyzing the data provided, DIW has investigated the relationships between health care utilization, health status and age respectively with long-term care-giving at home, based on the European Community Household Panel (ECHP). Further, long-time series data from the OECD Health Data 2002 and 2003 are used to show the changes in the utilization and supply of health care services over time.

Integrating Socio-Economic Determinants of Canadian Women's Health.

Health IssueThe association between a number of socio-economic determinants and health has been amply demonstrated in Canada and elsewhere. Over the past decades, women's increased labour force participation and changing family structure, among other changes in the socio-economic environment, have altered social roles considerably and lead one to expect that the pattern of disparities in health among women and men will also have changed. Using data from the CCHS (2000), this chapter investigates the association between selected socio-economic determinants of health and two specific self-reported outcomes among women and men: (a) self-perceived health and (b) self-reports of chronic conditions.Key FindingsThe descriptive picture demonstrated by this CCHS dataset is that 10% of men aged 65 and over report low income, versus 23% of women within the same age bracket. The results of the logistic regression models calculated for women and men on two outcome variables suggest that the selected socio-economic determinants used in this analysis are important for women and for men in a differential manner. These results while supporting other results illustrate the need to refine social and economic characteristics used in surveys such as the CCHS so that they would become more accurate predictors of health status given that there are personal, cultural and environmental dimensions to take into account.RecommendationsBecause it was shown that socio economic determinants of health are context sensitive and evolve over time, studies should be designed to examine the complex temporal interactions between a variety of social and biological determinants of health from a life course perspective. Examples are provided in the chapter.

The Labor Market Effects of Welfare Reform

The recent reform of the federal welfare system is meant to encourage recipients to leave welfare and enter the workforce. If the reform is successful there are likely to be effects felt throughout the low-- skilled end of the labor market. As former welfare recipients enter the labor market, they may exert downward pressure on wages or displace employment of others already in the labor market. Since there has been limited changes in eligibility for federal welfare programs from which to draw inferences, the magnitude of these labor market effects are open to debate. This study considers these issues in general and evaluates how labor markets in Michigan were affected when the General Assistance program in that state was eliminated in 1991. General Assistance was a large-- scale, state--administered program that provided benefits to people who fell through the cracks in federal anti--poverty programs. In all, about eighty to one--hundred thousand able--bodied adults lost benefits. Increased labor force participation among these people resulted in a decline in weekly hours among high school drop--outs of 1.2 to 2.4 percent. There is little evidence of declines in hourly earnings, except in the Detroit area, where wages fell by about five percent.

Productivity and wage effects of “family‐friendly” fringe benefits

Family‐supportive employment benefits have become increasingly popular in recent years as an employer response to the increasing labor force participation of women, and the consequent need to balance work and family life. Economic theory predicts that these types of fringe benefits could at least partially pay for themselves through a combination of increased productivity and lower wages. A survey of 120 employers in an upstate New York county provides data on benefits packages and outcome measures that are used to test this hypothesis. We find that employers who offer flexible sick leave and child care assistance experience measurable reductions in turnover. Employers who offer benefits like flexible scheduling policies and child care also appear to offset part of the cost of these benefits by paying lower entry‐level wages than do their competitors.

Job Search Behavior at the End of the Life Cycle

This paper presents one of the first formal dynamic models of job search by older individuals. It also presents an empirical analysis of job search behavior among this population using the Health and Retirement Study. Several factors currently compound to make the topic of this research an important one in the agenda of the Economics of Aging: ongoing demographic, epidemiological, socio-economic, technological, and labor market trends indicate that older Americans are more likely to be labor force participants beyond traditional retirement ages. Increasing longevity, improving health, strong labor market conditions, increasing labor supply flexibility stemming from an increase in part-time work and self-employment and the use of technological advances to promote second careers, and increasing labor force participation, make the study of search behavior at the end of the life cycle, in a formal theoretical and empirical model, an important contribution. Our findings show that older Americans actively search for new jobs, both on the job and when out of work, and that previous work attachment and health limitations are key to understanding the different job search behavior of employed and non-employed individuals, as well as males and females.

Publicly Provided Goods and Intrafamily Resource Allocation: Female Child Survival in India

The paper examines the problem of excess mortality of females in India. The determinants of gender–specific child survival are investigated through the traditional household production model pioneered by Becker, which is extended to include publicly provided goods as fixed inputs in production decisions. The introduction of government–provided goods provides an avenue for investigating the influence of the state on household decisions. Gender–specific child survival equations are estimated using a robust “seemingly unrelated regression” method. Results using 1981 Indian Census data indicate that increases in female literacy and female labor force participation increase female child survival in rural India. Furthermore, higher ratios of female to male medical technicians are associated with higher female child survival relative to males. This paper demonstrates that a large and effective role exists for government to address excess female morality.

Income distribution in Argentina, 1974-2000

Over the last quarter-century, the distribution of income in Argentina has deteriorated steadily. This article utilizes microsimulation analysis to decompose the impact that labour changes have had on the distribution of family income. In the 1970s, the deterioration was due to real reduction and relative dispersion of wages; in the 1980s, it was linked to growing unemployment resulting from successive crises; in the 1990s, under the new economic order, the deterioration continued as a result of the unemployment generated by the restructuring of production and the increase in labour force participation, coupled, in the last phase, with greater inequality in wage levels. The article concludes that the new economic model involves, beyond currency appreciation and the ultimate collapse of the macroeconomic regime, a lower employment elasticity of growth –thereby generating more structural unemployment– and a larger wage gap between workers at different skill levels.

The Impact of Social Capital on Labor Force Participation: Evidence from the 2000 Social Capital Benchmark Survey

Objectives. Few studies apply the concept of social capital to labor force participation. In this research, I study the relationship between friendship networks and labor force participation as represented by employment and hours worked. Methods. I test five hypotheses representing social capital with network structure, network quality, and network diversity using nationally representative data from the 2000 Social Capital Benchmark Survey. Since this survey enables comparisons across racial/ethnic and gender groups, I am also able to specify how social capital interacts with race/ethnicity and gender to influence labor force participation, while controlling for other prominent theoretical concerns such as human capital theory. Results. I find that friendship networks are generally positively related with increased labor force participation. Further, I find significant social capital differences based on race/ethnicity and gender. Conclusions. I illustrate that social capital can be applied across a broader racial/ethnic/gender spectrum. The findings suggest that programs that attempt to bring valuable labor market information to individuals and communities lacking employment–related information are likely to be effective in reducing inequality, especially if combined with programs for developing human capital.

The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of Evidence

The 1990s have witnessed several financial crises, of which the East Asia and Mexico tequila crises are perhaps the most well known. What impact have these crises had on labor markets, household incomes, and poverty? Total employment fell by much less than production declines and even increased in some cases. However, these aggregates mask considerable churning in employment across sectors, employment status, and location. Economies that experienced the sharpest currency depreciations suffered the deepest cuts in real wages, though deeper cuts in real wages relative to gdp were associated with smaller rises in unemployment. To some extent, families smoothed their incomes through increased labor force participation and private transfers, though the limited evidence available suggests that wealthier families were better able to smooth consumption. The initial impact of the crises was on the urban corporate sector, but rural households were affected as well and in some instances suffered deeper losses than did urban families. School enrollment declined, especially among poorer families, as did use of health facilities, but he impact on children's nutrition levels appears to vary. Crises have typically proved short‐lived, but whether households plunged into poverty during a crisis are able to recover as the economy does remains an open question.

Shaping Europe's Migration Policy New Regimes for the Employment of Third Country Nationals: A Comparison of Strategies in Germany, Sweden, the Netherlands and the UK

During the 1990s, Justice and Home Affairs moved, in an unexpected way, to centre stage in the European debate. Concern had been growing about policy since the Maastricht Treaty institutionalised the third pillar of the European Union. This concern had been stimulated by several factors – the persistence of irregular migration and tragic incidents, such as the one in Dover in July 2000 in which 58 Chinese nationals lost their lives trying to enter illegally into the United Kingdom, the need for immigrant workers in some sectors, and the spectre of an ageing European population. More generally, the Treaty of Amsterdam, since its entry into force in 1999, represents a major development in overall Justice and Home Affairs policy, and the implementation of the treaty provisions in Justice and Home Affairs was described as the next major EU initiative after the single currency. Moreover, the Conclusions of the European Council in Tampere (15th and 16th October 1999); gave an additional push for the adoption of the measures considered necessary for the realisation of an area of Freedom, Security and Justice, reaffirming traditional and integrating new principles in these fields. In March 2000, a very controversial report of the United Nations based on demographic considerations has been published (UN Secretariat ESA/P/WP.160). Resting on the analysis of the current population trends in the world and projections for the period 1995-2050, this report pleaded for replacement immigration in order to compensate for the inevitable population decline in Europe and in other parts of the world. The “provocative” observations of the report stimulated an intense public debate in the European press on this question, but they also contributed to re-open the issue on in the European institutions and member states at a time of reflection on how to implement the new Amsterdam provisions. A proposal for a Directive dealing with the conditions of entry and residence of third-country nationals for the purpose of paid employment and self-employed economic activities has been published on 11 July 2001, the same day as the publication of a Commission Communication on an open method of co-ordination for the Community policy. Migration alone is unlikely to be the answer to Europe’s demographic problem. Policies for legal migration of labour can also be coupled with other less politically sensitive ways, which could reduce the governments’ costs of an ageing population, such as increasing labour force participation among older people and women. Some EU member states have already developed concrete policy initiatives to address on one hand labour market shortages as well as the increasing demographic issue. This paper examines the evolving laws in the field of labour in four countries: UK, Germany; Sweden and the Netherlands, situating the policies being developed in the overall European context.

Why is Unemployment High in the Philippines?

Unemployment has remained high in the Philippines, at almost twice the level of neighboring countries, despite relatively fast employment growth in the past decade. Employment growth was not sufficient to reduce unemployment because of rapid population growth and increased labor force participation. This paper shows that Philippine employment growth and unemployment declines were positively correlated with real GDP growth and, to a lesser extent, negatively with the real minimum wage. The key policy implications are that higher economic growth and moderation of increases in the real minimum wage are required to reduce unemployment.

Why is Unemployment High in the Philippines?

Unemployment has remained high in the Philippines, at almost twice the level of neighboring countries, despite relatively fast employment growth in the past decade. Employment growth was not sufficient to reduce unemployment because of rapid population growth and increased labor force participation. This paper shows that Philippine employment growth and unemployment declines were positively correlated with real GDP growth and, to a lesser extent, negatively with the real minimum wage. The key policy implications are that higher economic growth and moderation of increases in the real minimum wage are required to reduce unemployment.

Ex ante and ex post labor supply response to risk in a low-income area

This paper tests for ex ante and ex post labor supply responses to weather risk for rural Indian farm households. The analysis uses panel data on 2115 households spanning 13 states in rural India, merged with a 22-year series of district-level rainfall data. Ex ante, households facing riskier distributions of rainfall are more likely to participate in the labor market. Ex post, unexpectedly bad weather and low rainfall increase labor force participation.

Minimum Wage Policy and Poverty in the United States

Recent studies have found that increasing the minimum wage is a useful antipoverty tool. In this analysis, we examine the influence of minimum wages and other important variables on US family poverty rates using state data over the years 1984-98 by estimating both a fixed effect and random coefficients regression model. Taking into account labor market influences, demographic factors, and differences in poverty rates across states, we find that expanding the minimum wage coverage and increasing labor force participation both have larger effects on poverty rates as compared to equivalent changes in the level of the minimum wage. It is further implied from the empirical results that the most effective means of lifting families out of poverty are policies that are directed toward increasing minimum wage coverage, encouraging increased labor force participation, raising the minimum wage, and subsidizing higher education, respectively.