Persistence Effects in Labor Force Participation
This paper examines empirically two facets of labor force participation dynamics that imply quite different interpretations of labor market fluctuations. The first, which underlies equilibrium business cycle models, is that workers time their participation to coincide with periods of high real wages. The second, which implies the existence of involuntary unemployment during cyclical downturns, is that workers' current labor force status is heavily influenced by their work experience in the recent past. The authors' results suggest that these persistence effects are a key feature of labor force behavior, particularly for teenagers, adult women, and older men. In contrast, very little evidence could be found to support the intertemporal substitution hypothesis.
Volume (Year): 15 (1989)
Issue (Month): 3 (Jul-Sep)
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- Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-134, February.
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- Jonathan S. Leonard, 1979. "The Social Security Disability Program and Labor Force Participation," NBER Working Papers 0392, National Bureau of Economic Research, Inc.
- Heckman, James J & Willis, Robert J, 1977. "A Beta-logistic Model for the Analysis of Sequential Labor Force Participation by Married Women," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 27-58, February.
- James J. Heckman & Robert J. Willis, 1975. "A Beta-Logistic Model for the Analysis of Sequential Labor Force Participation by Married Women," NBER Working Papers 0112, National Bureau of Economic Research, Inc.
- Haveman, Robert H & Wolfe, Barbara L, 1984. "The Decline in Male Labor Force Participation: Comment," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 532-541, June.
- Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Real Wages, Employment, and Inflation," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 721-754, Sept./Oct. Full references (including those not matched with items on IDEAS)
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