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A cohort-based analysis of labor force participation for advanced economies

Author

Listed:
  • Francesco Grigoli
  • Zsoka Koczan
  • Petia Topalova

Abstract

Advanced economies are in the midst of a major demographic transition, with the number of elderly rising precipitously. Yet, advanced economies experienced different trajectories in labor force participation rates and workforce attachment of men and women. Using a cohort model for 17 advanced economies during 1985–2016, we document a significant role of common patterns of participation over the life cycle and shifts in these patterns across generations, especially for women. New cohorts of women led to upward shifts in the age participation profile. However, this process plateaued in most countries, with signs of reversal in some. We project sizable declines in participation rates over the next three decades, with aggregate participation forecast to decline by 5.5 percentage points for the median advanced economy. Illustrative simulations show that closing gender gaps, extending working lives, and implementing policies encouraging labor supply can help attenuate, but may not fully offset, demographic pressures.

Suggested Citation

  • Francesco Grigoli & Zsoka Koczan & Petia Topalova, 2021. "A cohort-based analysis of labor force participation for advanced economies," Oxford Economic Papers, Oxford University Press, vol. 73(2), pages 623-643.
    • Handle: RePEc:oup:oxecpp:v:73:y:2021:i:2:p:623-643.
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    File URL: http://hdl.handle.net/10.1093/oep/gpaa027
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    Cited by:

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    2. Hina Amber & Bezawit Beyene Chichaibelu, 2023. "Patterns and Causes of Female Labor Force Participation: An Age–Period–Cohort Analysis for Pakistan," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(2), pages 1-31, April.
    3. Paweł A. Strzelecki, 2019. "Health, disability and labor force participation trends in Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 31-53.
    4. 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.
    5. Mr. Francesco Grigoli & Zsoka Koczan & Petia Topalova, 2018. "Drivers of Labor Force Participation in Advanced Economies: Macro and Micro Evidence," IMF Working Papers 2018/150, International Monetary Fund.
    6. van Dijk, Mathijs A. & van Dalen, Hendrik P. & Hyde, Martin, 2020. "Who bears the brunt? The impact of banking crises on younger and older workers," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    7. Strzelecki, Paweł A., . "Trendy w zakresie stanu zdrowia, niepełnosprawności i aktywności zawodowej w Polsce," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2019(3).
    8. Das, Mitali & Hilgenstock, Benjamin, 2022. "The exposure to routinization: Labor market implications for developed and developing economies," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 99-113.
    9. Reljic, Jelena & Zezza, Francesco, 2025. "Breaking the divide: Can public spending on social infrastructure boost female employment in Italy?," Economic Modelling, Elsevier, vol. 143(C).

    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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