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The Cyclical Behaviour of the Labour Force Participation Rate in Australia

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  • Richard Evans
  • Angus Moore
  • Daniel M Rees

Abstract

We examine the cyclical relationship between labour market participation and economic activity in Australia. We find that the participation rate has a large and economically meaningful cyclical component. By cohort, the participation rates of young people, 25−54 year‐old females and older males are the most responsive to changes in economic conditions. If the participation rate did not adjust, expansions would be more inflationary; on the other hand, recessions would be more disinflationary and lead to larger increases in involuntary unemployment.

Suggested Citation

  • Richard Evans & Angus Moore & Daniel M Rees, 2019. "The Cyclical Behaviour of the Labour Force Participation Rate in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 52(1), pages 94-106, March.
    • Handle: RePEc:bla:ausecr:v:52:y:2019:i:1:p:94-106
    DOI: 10.1111/1467-8462.12308
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    References listed on IDEAS

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    Cited by:

    1. Alexander Ballantyne & Tom Cusbert & Richard Evans & Rochelle Guttmann & Jonathan Hambur & Adam Hamilton & Elizabeth Kendall & Rachael McCririck & Gabriela Nodari & Daniel M. Rees, 2020. "MARTIN Has Its Place: A Macroeconometric Model of the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 96(314), pages 225-251, September.
    2. Michael Callaghan & Jamie Culling & Finn Robinson, 2018. "Ageing is a drag: Projecting labour force participation in New Zealand," Reserve Bank of New Zealand Analytical Notes series AN2018/10, Reserve Bank of New Zealand.
    3. Kadir Atalay & Rebecca Edwards & Stefanie Schurer & David Ubilava, 2021. "Lives saved during economic downturns: Evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2452-2467, September.
    4. Nam Foo & Ruhul Salim, 2022. "The evolution of mining employment during the resource boom and bust cycle in Australia," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 35(2), pages 309-324, June.

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