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The Driving Force of Labor Force Participation in Developed Countries

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Abstract

The evolution of labor force participation rate is modeled using a lagged linear function of real economic growth, as expressed by GDP per capita. For the U.S., our model predicts at a two-year horizon with RMSFE of 0.28% for the period between 1965 and 2007. Larger part of the deviation between predicted and measured LFP is explained by artificial dislocations in measured time series induced by major revisions to the CPS methodology in 1979 and 1989. Similar models have been developed for Japan, the UK, France, Italy, Canada, and Sweden.

Suggested Citation

  • Ivan O. KITOV, 2008. "The Driving Force of Labor Force Participation in Developed Countries," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(3(5)_Fall), pages 203-222.
    • Handle: RePEc:ush:jaessh:v:3:y:2008:i:3(5)_fall2008:p:203-222
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    1. Kitov, Ivan, 2007. "Modeling the evolution of Gini coefficient for personal incomes in the USA between 1947 and 2005," MPRA Paper 2798, University Library of Munich, Germany.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. We accurately predicted the fall in the labor force participation rate since 2000 at a two-year horizon
      by Ivan Kitov in Economics as Classical Mechanics on 2022-11-13 15:24:00

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    Cited by:

    1. Ivan O. KITOV & Oleg I. KITOV & Svetlana A. DOLINSKAYA, 2008. "Comprehensive Macro Ï¿½ Model For The Us Economy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(4(6)_Wint).
    2. Oleg KITOV & Ivan KITOV, 2012. "A Win-Win Monetary Policy In Canada," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 6(6(18)/ Su), pages 160-176.
    3. Kitov, Ivan & Kitov, Oleg, 2009. "Modelling and predicting labor force productivity," MPRA Paper 15152, University Library of Munich, Germany.
    4. Gloria O. Dzeha & Joshua Abor & Festus Turkson & Elikplimi Agbloyor, 2018. "Technical Efficiency and Technical Change in Africa: The Role of Money from the Diasporas," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(7), pages 177-177, July.
    5. Kitov, Ivan & Kitov, Oleg & Dolinskaya, Svetlana, 2008. "Comprehensive macro-model for the U.S. economy," MPRA Paper 9808, University Library of Munich, Germany.

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    More about this item

    Keywords

    labor force participation; real GDP per capita; prediction;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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