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A Dynamic Model of Cyclical Labour Force Participation

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  • ROGER J. BOWDEN

Abstract

Time series studies of labour force participation tend to be rather ad hoc regressions of participation rates on unemployment. The author builds an explicit model of flows into and out of the labour force in which flows are forced by important cyclical variables such as vacancies and duration of unemployment as well as the unemployment rate. The resulting nonlinear model is fitted for Australian data. Among the conclusions of interest is that discouragement eflects are not constant but vary according to the stage of the business cycle. Over moderate ranges of unemployment, discouragement is less than that found by other authors.

Suggested Citation

  • Roger J. Bowden, 1980. "A Dynamic Model of Cyclical Labour Force Participation," The Economic Record, The Economic Society of Australia, vol. 56(155), pages 362-373, December.
    • Handle: RePEc:bla:ecorec:v:56:y:1980:i:155:p:362-373
    DOI: 10.1111/j.1475-4932.1980.tb01689.x
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    References listed on IDEAS

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    1. Bowden, Roger J., 1978. "On market dynamics for a durable good, with and without a financing constraint," Journal of Monetary Economics, Elsevier, vol. 4(3), pages 481-501, August.
    2. Barron, John M, 1975. "Search in the Labor Market and the Duration of Unemployment: Some Empirical Evidence," American Economic Review, American Economic Association, vol. 65(5), pages 934-942, December.
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