Labor Force Participation Behavior Research Articles

Female labor force participation in Egypt and Palestine: An age–period–cohort analysis*

AbstractThis paper considers female labor force participation (FLFP) behavior over the past two decades in two MENA (Middle East and North Africa) countries, namely Egypt and Palestine. Low FLFP rates in these countries, as in other MENA countries, are well documented. We conduct synthetic panel analysis using age–period–cohort (APC) methodology and decompose the FLFP rates into age, period, and cohort effects. We present our results with Hanoch–Honig–Deaton–Paxson normalization and maximum entropy estimation approaches to the APC method to observe the robustness of our results. The analysis is carried out by aggregate FLFP as well as by stratification by rural–urban location and educational attainments. Most of our results are similar in Egypt and Palestine with some exceptions. The two salient findings are as follows. The year effects display an initial U‐shape followed by an inverted U‐shape in both countries. The declining arm of the inverted U‐shape is compatible with the “MENA paradox” observed in both countries. The increase in the participation of the younger cohorts of the below‐secondary educated women, which is a low‐educated group, may be an indication of the wearing away of the social norms in Palestine that are considered to hinder the participation of women.

Down and up the “U” – A synthetic cohort (panel) analysis of female labor force participation in Turkey, 1988–2013

We study the aggregate labor force participation behavior of women over a 25-year period in Turkey using a synthetic panel approach. In our decomposition of age, year, and cohort effects, we use three APC models that have received close scrutiny of the demography community. The exercise is repeated by rural/urban status and by education to tease out some key differences in behavior. Our comparative methodology yields remarkably consistent profiles for most subsamples, but not all. Notably all methods reveal an M-shaped age profile attributable to child-bearing related interruptions in rural areas and for low-educated women in urban areas. We also find that younger cohorts among the least-educated women are more likely to participate, contrary to the belief that culture stands in the way. The evidence we compiled confirms that Turkey has reached the turning point of the U-shaped pattern in female labor force participation observed in countries where agriculture initially accounts for a large fraction of employment. We dwell on methodological issues throughout the paper and seek explanations for the occasional fragility of the methods. We establish that evolution of the linear trend present in the cross-section age profiles is responsible for the differences in the findings. Despite the apparent inconsistency, the models we use are consistent in recovering the turning points of the age, period, and cohort profiles.

Factors affecting labour absorption in South Africa

Orientation: South Africa’s continually growing unemployment rates appear to be acute if measured by means of labour absorption. The country’s labour continues to struggle being absorbed in the labour market, let alone finding good and sustainable employment, hindering potential economic growth and development. Research purpose: The study aims to analyse and understand factors affecting labour absorption in South Africa. Motivation for the study: South Africa is characterised by limited job opportunities and a rapidly expanding labour force. Therefore, critically understanding factors contributing to low absorption rates could assist in harnessing and re-evaluating the effectiveness of existing labour policies. Research approach/design and method: The study uses quarterly time series data from 2008Q2 to 2019Q1. The Autoregressive Distributed Lag (ARDL) model was used to estimate the long-run and short-run relationships between the chosen variables. Main findings: The study found a long-run relationship between the selected variables and labour absorption. One main finding is that in the long run, the number of male work-seekers leads to a declining labour absorption rate, whilst the number of female work-seekers results in an increase in labour absorption. Practical/managerial implications: For many years, females have endured negative employment outcomes as a result of existing inequalities in the labour market. The findings of this study reveal the potential effectiveness of South Africa’s employment policy in reversing such statistics. A further study with a more defined focus on labour absorption, employment policy and gender should be undertaken to enhance the understanding on labour’s absorptiveness in the labour market. Contribution/value-add: Labour absorption is a broader measure of labour market performance than unemployment, because it comprises the labour force participation behaviour. Therefore, this study takes a much broader angle than most studies on unemployment.

Decomposing Changes in the Aggregate Labor Force Participation Rate

This paper presents a simple methodology for decomposing changes in the aggregate labor force participation rate (LFPR) over time into demographic group changes in labor force participation behavior and in population share. The purpose is to identify the relative importance of behavioral changes and population changes as driving forces behind changes in the aggregate LFPR.

Female Labor Force Participation in Five Selected Mena Countries: An Age- Period-Cohort Analysis (Algeria, Egypt, Jordan, Palestine and Tunisia)

This paper considers the female labor force participation (FLFP) behavior over the past decade in five MENA countries namely, Algeria, Egypt, Jordan, Palestine and Tunisia. Low FLFP rates in these countries, as it is in other MENA countries, are well documented. We conduct synthetic panel analysis using age-period-cohort (APC) methodology and decompose FLFP rates into age, period and cohort effects. We present our results with Hanoch-Honig/Deaton-Paxson normalization and maximum entropy estimation approaches to the APC methodology in order to observe robustness of our results. We first study the aggregate FLFP and note the differentials in age, period and cohort effects across the countries we consider.The analysis is carried also out by rural/urban regional differentiation, marital status and educational attainment. Implications of our results for possible government policies to increase FLFP rates are discussed.

Female Labor Force Participation in Five Selected MENA Countries: An Age-Period-Cohort Analysis (Algeria, Egypt, Jordan, Palestine and Tunisia)

This paper considers the female labor force participation (FLFP) behavior over the past decade in five MENA countries namely, Algeria, Egypt, Jordan, Palestine and Tunisia. Low FLFP rates in these countries, as it is in other MENA countries, are well documented. We conduct synthetic panel analysis using age-period-cohort (APC) methodology and decompose FLFP rates into age, period and cohort effects. We present our results with Hanoch-Honig/Deaton-Paxson normalization and maximum entropy estimation approaches to the APC methodology in order to observe robustness of our results. We first study the aggregate FLFP and note the differentials in age, period and cohort effects across the countries we consider.The analysis is carried also out by rural/urban regional differentiation, marital status and educational attainment. Implications of our results for possible government policies to increase FLFP rates are discussed.

Female Labor Force Participation in Turkey: A Synthetic Cohort (Panel) Analysis, 1988-2013

We study the aggregate labor force participation behavior of women over a 25-year period in Turkey using a synthetic panel approach. In our decomposition of age, year, and cohort effects, we use three APC models that have received close scrutiny of the demography community. We rely on predictions from just-identified models that render different methods comparable. The exercise is carried out by rural/urban status and by education to tease out some key differences in behavior, and to test hypotheses about the course of participation. Our comparative methodology yields remarkably consistent profiles for most subsamples, but not all. Notably all methods reveal an M-shaped age profile attributable to child-bearing related interruptions in rural areas and for low-educated women in urban areas. We also find that younger cohorts among the least-educated women are more likely to participate, contrary to the belief that culture stands in the way. This implies that the recent rise in the aggregate participation rates is not only due to a composition effect arising from increasing education levels. We also show that Turkey has reached the turning point of the U-shaped pattern in female participation. In addition, we dwell on methodological issues and offer explanations for the fragility of the methods. We establish that evolution of the linear trend present in the cross-section age profiles is responsible for the apparent differences in the findings.

State dependence of labour force participation of married Australian women

PurposeThe purpose of this paper is to enhance the understanding of labour force participation behaviour of married Australian women, with a focus on identifying the sources of observed inter-temporal labour force participation persistence.Design/methodology/approachA dynamic Probit model is applied to the Household, Income and Labour Dynamics in Australia (HILDA) Survey, a national representative panel survey of Australian households. The model used accounts for observed and unobserved individual heterogeneity and serially correlated transitory shocks to labour supply.FindingsThe results show that both observed and unobserved individual heterogeneity contributes to observed inter-temporal persistence of labour force participation of married Australian women, but the persistence remains even after controlling for these factors. It is also found that failing to control for serially correlated unobserved transitory shocks would lead to underestimation of genuine state dependence of labour force participation; and that state dependence of labour force participation varies with age, education, health, immigration status and the number of children under the school age.Originality/valueThis study adds to the international literature on labour force dynamics of women by providing Australian empirical evidence and through a flexible modelling framework. The result that there exists genuine positive state dependence in married Australian women’s labour force participation suggests that policy intervention that increases married women’s labour supply would have a long-lasting effect.

How house price appreciation affects homeowners' labour force participation

AbstractThis paper investigates the effects of house price appreciation on homeowners' labour force participation (LFP). Although economic theories predict that housing capital gains will reduce labour supply, empirical evidence from urban China revealed that house price appreciation significantly boosts homeowners' LFP. Heterogeneous analyses indicate that LFP behaviour is more likely to be affected by house price appreciation for female and younger homeowners. Furthermore, homeowners living in provinces with greater house price appreciation tend to be more active in job participation than those living in provinces with lower price appreciation.

Identifying the Effect of Parenthood on Labor Force Participation: A Gender Comparison

Identifying the factors that influence labor force participation could elucidate how individuals arrive at their labor supply decisions, whose understanding is, in turn, of crucial importance in analyzing how the supply side of the labor market functions. This paper investigates the effect of parenthood status on Labor Force Participation (LFP) decisions using an individual-level fixed-effects identification strategy. The differences across individuals and over time in having or not having children as well as being or not being in the labor force provide the variation needed to assess the association between individuals’ LFP behavior and parenthood. Parenthood could have different impacts on mothers than it would on fathers. In order to look at the causal effect of maternity and paternity on LFP separately, the data is disaggregated by gender. To this end, the effect of a change in the parenthood status can be measured using individual-level fixed-effects to account for time-invariant characteristics of individuals becoming a parent. The primary data source used is the National Longitudinal Surveys (NLS). Considering the nature of LFP variable, this paper employs Binary Response Models (BRMs) to estimate LFP equations using individual-level micro data. The findings of the study show that parenthood has a negative overall effect on LFP. However, paternity has a significant positive effect on the likelihood of being in the labor force, whilst maternity has a significant negative impact of LFP. In addition, the results imply that the effect of parenthood on LFP has been fading away over time, regardless of the gender of parents. These two pieces of evidence precisely map onto the theoretical predictions made by the related mainstream economic theories (the traditional neoclassical theory of labor supply as well as Becker’s household production model). These results are robust across different models specified and various estimation methods employed. These findings can contribute to the existing knowledge about the effect of parenthood on LFP decisions made in the US at an individual and behavioral level, and also aid in the shaping of economic policies and interventions to enhance the status of labor force participation in the economy. In the end, some potential threats to the identification of this causal effect, such as endogeneity of fertility, and some possible strategies to deal with those threats are discussed.

Gender unemployment gaps in the EU: blame the family

There are considerable differences in gender unemployment gaps across the EU. We use labor force survey data on 21 countries to perform a series of data decompositions and show that the cross-country variation in gender unemployment gaps is primarily driven by the differences in female labor force participation behavior after childbirth, namely, the family leave duration and the subsequent attachment of women to the labor force. Further, in countries where a high share of women permanently withdraw from the labor force after childbirth, the size of gender differences in unemployment strongly correlates with the Eurobarometer measure of perceived overall gender discrimination. Our findings suggest that family leave policies and institutions that facilitate the leave to work transition and the work-family balance are crucial to tackle the gender differences in unemployment in countries where the female unemployment rate exceeds that of men.

Single Women's Labor Supply Elasticities: Trends and Policy Implications

This paper uses CPS data to examine changes in single women's labor supply elasticities in recent decades. Specifically, the authors investigate trends in how single women's hours of work and labor force participation rates responded to both wages and income over the years 1979–2003. Results from the base specification suggest that over the observation period, hours wage elasticities decreased by 82%, participation wage elasticities by 36%, and participation income elasticities by 57%. These results imply that changes in tax policy had a much larger effect on the labor supply and labor force participation behavior of women in this subpopulation in the early 1980s than in recent years.

A DYNAMIC DECISION MODEL OF MARRIAGE, CHILDBEARING, AND LABOUR FORCE PARTICIPATION OF WOMEN IN JAPAN

This paper empirically examines marriage, child bearing and labour force participation behaviour of fertile-aged women in Japan, applying an estimable dynamic model of dis-crete choice. Using microdata from the 1994–1999 Japanese Panel Survey of Consumers, the structural estimation result suggests that, overall, women are worse off with marriage and part-time work without financial benefits. Women are better off having two or more children, but considerably worse off because of the burden of raising infants. In addition, probabilities of finding full-time work after career interruption are estimated at about 18% for university educated women and 12–13% for less educated women.

The Effect of Filipino Overseas Migration on the Non-Migrant Spouse's Market Participation and Labor Supply Behavior

This paper examines the effect of one partner's overseas migration on the other non-migrant partner's labor force participation and supply behavior. I compare the effect when the migrant partner is male and when she is female. The study uses merged 2003 data sets from the nationally representative Labor Force Survey, the Family Income and Expenditures Survey and the Survey of Overseas Filipinos. Employing alternative empirical specifications of the labor supply function, the study examines the income remittance and the conjugal home-time effects of overseas migration. Addressing the potential endogeneity of income and migration, estimates establish stronger conjugal home time effects of migration for married women and larger remittance income effects for married men.

Health and Labor Force Participation of the Elderly in Europe: What Do Objective Health Measures Add to the Analysis?

In this paper, we study labour force participation behaviour of individuals aged 50-64 in 11 European countries.The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE).We examine the value added of objective health variables in relation to potentially endogenous self-reported health.We approach the endogeneity of self-reported health as an omitted variables problem.In line with the literature on the reliability of self-reported health, ambiguous results are obtained.In some countries, self-reported health does a fairly good job: controlling for extra health related variables does not seem to add much to the analysis.In other countries, however, self-reported health is clearly endogenous with results that are in line with the justi.cation hypothesis.They illustrate the multidimensional nature of health and the need to control for objective health variables when analyzing labour force participation behaviour.This makes an instrumental variables approach to deal with endogenous self-reported health less appropriate.

Labour Force Participation of the Elderly in Europe: The Importance of Being Healthy

In this paper we study labour force participation behaviour of individuals aged 50-64 in 11 European countries. The data are drawn from the new Survey of Health, Ageing and Retirement in Europe (SHARE). The empirical analysis shows that health is multi-dimensional, in the sense that different health indicators have their own significant impact on individuals' participation decisions. Health effects differ markedly between countries. A counterfactual exercise shows that improved health conditions may yield over 10 percentage points higher participation rates for men in countries like Austria, Germany and Spain, and for females in the Netherlands and Sweden. Moreover, we show that the declining health condition with age accounts considerably for the decline in participation rates with age. (This abstract was borrowed from another version of this item.)

Welfare Reform and Addiction: A Priori Hypotheses, Post Hoc Explorations, and Assisted Sensemaking in Evaluating the Effects of Terminating Benefits for Chronic Substance Abusers

The passage of the Contract with America Advancement Act terminated the Social Security Administration’s Disability Insurance and Supplemental Security Income benefits for persons diagnosed with drug or alcohol addiction (also known as DA&A recipients), effective January 1, 1997. From an evaluation standpoint, the law created the opportunity for a “natural” experiment, specifically, an interrupted time series quasi-experiment. Through the availability of person-level data on an entire state population, the present study combines the design tradition of interrupted time series with the analytic tradition of growth curve modeling to create an “enriched” interrupted time series with greater flexibility and explanatory power than the standard design based on aggregate data. Additional techniques from the contemporary evaluation toolkit include: use of propensity scoring for matching and covariance adjustment, multilevel modeling, alternate estimates of the counter-factual, and sensitivity analyses to empirically test the plausibility of validity threats. The study assesses the net impact of the law on labor force participation and criminal behavior among former DA&A recipients in Washington State, using person-level data on employment and arrests from 2 years before implementation to 3 years after. Hypothesis tests showed unambiguously that the law increased employment but did not increase arrests. Post hoc exploratory analyses—framed by Mark et al. [Mark, M. M., Henry, G. T., & Julnes, G. (2000). Evaluation: An integrated framework for understanding, guiding, and improving policies and programs. San Francisco: Jossey Bass] theory of evaluation as assisted sensemaking with particular attention to generative mechanisms and social betterment—suggest a more nuanced interpretation. The combination of a priori and post hoc analyses confirmed that, as a result of the law, there were fewer DA&As on public supports, more DA&As in the workforce, and no evidence of more criminals menacing the public. Analyses also confirmed that a segment of the population, already poor, was made destitute.

Distribution, Development and Education: Taiwan, 1979-1994

This paper studies the mechanisms underlying the apparent stability of the income distribution in Taiwan. An original decomposition methodology based on micro-simulation techniques is proposed. Applied to the distribution of income in Taiwan since 1979 it permits isolating the respective impact of changes in: a) earning structure; b) labor-force participation behavior; and c) the socio-demographic structure of the population. It appears that the stability of the distribution in Taiwan is the result of various structural forces which happened to offset each other. At the individual level, the small drop observed in inequality resulted from the combination of unequalizing changes in the wage structure and the effects of changes in female labor-force participation as well as changes in the educational structure of the population. The same offsetting forces, together with changes in the composition of households, resulted in a small increase in the inequality of the distribution of equivalized household incomes.

Welfare Reform and Addiction: A Priori Hypotheses, Post Hoc Explorations, and Assisted Sensemaking in Evaluating the Effects of Terminating Benefits for Chronic Substance Abusers

ABSTRACT The passage of the Contract with America Advancement Act terminated the Social Security Administration's Disability Insurance and Supplemental Security Income benefits for persons diagnosed with drug or alcohol addiction (also known as DA&A recipients), effective January 1, 1997. From an evaluation standpoint, the law created the opportunity for a “natural” experiment, specifically, an interrupted time series quasi-experiment. Through the availability of person-level data on an entire state population, the present study combines the design tradition of interrupted time series with the analytic tradition of growth curve modeling to create an “enriched” interrupted time series with greater flexibility and explanatory power than the standard design based on aggregate data. Additional techniques from the contemporary evaluation toolkit include: use of propensity scoring for matching and covariance adjustment, multilevel modeling, alternate estimates of the counterfactual, and sensitivity analyses to empirically test the plausibility of validity threats. The study assesses the net impact of the law on labor force participation and criminal behavior among former DA&A recipients in Washington State, using person-level data on employment and arrests from 2 years before implementation to 3 years after. Hypothesis tests showed unambiguously that the law increased employment but did not increase arrests. Post hoc exploratory analyses—framed by Mark et al. [Mark, M. M., Henry, G. T., & Julnes, G. (2000). Evaluation: An integrated framework for understanding, guiding, and improving policies and programs. San Francisco: Jossey Bass] theory of evaluation as assisted sensemaking with particular attention to generative mechanisms and social betterment—suggest a more nuanced interpretation. The combination of a priori and post hoc analyses confirmed that, as a result of the law, there were fewer DA&As on public supports, more DA&As in the workforce, and no evidence of more criminals menacing the public. Analyses also confirmed that a segment of the population, already poor, was made destitute.

Female Labor Force Participation in Brazil: 1977–2001

This paper has three objectives: the first is to track the changes in labor force participation behavior of women and show its evolution according to time and also according to cohorts; the second is to decompose these changes according to a group of elementary variables, such as position in the household and educational level; the last is to analyze with special care the relationship between educational levels of married women, education of their spouses, and their labor force participation behavior. This last objective is motivated by findings in the second one. We have five main results. The first is not surprising - we find both cohort and time effects at work on changes in participation behavior. The second is perhaps more surprising: position in the household has low statistical explanatory power for labor force participation - in other words, the strong increase in the percentage of female headed household holds little relation with the increase in female labor force participation. The real explanation is a massive increase in the participation rates of married women - this increase alone explains close to 70% of the increase in female labor force participation. Another surprising conclusion is that by far the most important explanatory variable is women's educational level, which alone explains about 50% of the variation in the global female participation rate. This suggests a strong price effect in the propensity to work among women. Finally, we van see that for married women of any educational level, increases in the spouse's educational level (and thus potential income) are associated with a lower labor force participation rate. This suggests an income effect to female participation behavior, although other interpretations are possible.