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Smooth transition trends and labor force participation rates in the United States

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  • Paraskevi Salamaliki
  • Ioannis Venetis

    ()

Abstract

This paper employs smooth transition trend models to investigate the long-run time series behavior of quarterly US labor force participation rates. In particular, we examine whether long-run growth in labor force participation rates can be modeled by smooth transitions between states rather than as abrupt mean level changes or as a stochastic trend. Smooth transitions permit for non-instantaneous adjustment of individual workers to changes associated with economic events or general labor market conditions. We employ unit root testing procedures with alternatives characterized by stationary fluctuations around one or two smooth transitions in linear trend. We examine labor force participation rates by gender- and age-specific groups. The results indicate that all female and most male participation series are better characterized as stationary processes that undergo transitional deterministics. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Paraskevi Salamaliki & Ioannis Venetis, 2014. "Smooth transition trends and labor force participation rates in the United States," Empirical Economics, Springer, vol. 46(2), pages 629-652, March.
  • Handle: RePEc:spr:empeco:v:46:y:2014:i:2:p:629-652
    DOI: 10.1007/s00181-013-0690-9
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    References listed on IDEAS

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    Cited by:

    1. Sibel Cengiz & Afsin Sahin, 2014. "Modelling nonlinear behavior of labor force participation rate by STAR: An application for Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 7(1), pages 113-127, April.
    2. repec:prg:jnlpep:v:2017:y:2017:i:5:id:633:p:578-601 is not listed on IDEAS
    3. repec:kap:jfamec:v:38:y:2017:i:2:d:10.1007_s10834-016-9514-3 is not listed on IDEAS
    4. repec:prg:jnlpep:v:preprint:id:633:p:1-24 is not listed on IDEAS

    More about this item

    Keywords

    Labor force participation rate; Non-linear trend; Deterministic smooth transition; Unit root; C22; J21;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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