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Are Labor Force Participation Rates Really Non-Stationary? Evidence from Three OECD Countries

  • Ozdemir, Zeynel Abidin

    ()

    (Gazi University)

  • Balcilar, Mehmet

    ()

    (Eastern Mediterranean University)

  • Tansel, Aysit

    ()

    (Middle East Technical University)

This paper shows that the structural breaks are an important characteristic of the monthly labor force participation rate (LFPR) series of Australia, Canada and the USA. Therefore we allow for endogenously determined multiple structural breaks in the empirical specifications of fractionally integrated ARMA model. The findings indicate that contrary to the previous research the LFPRs of Australia, Canada and the USA are stationary implying that the informational value of the unemployment rates about the behavior of labor markets and the causes of joblessness are useful.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6776.

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Length: 22 pages
Date of creation: Aug 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6776
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  16. Gustavsson, Magnus & Osterholm, Par, 2006. "The informational value of unemployment statistics: A note on the time series properties of participation rates," Economics Letters, Elsevier, vol. 92(3), pages 428-433, September.
  17. Anderson, Patricia M & Gustman, Alan L & Steinmeier, Thomas L, 1999. "Trends in Male Labor Force Participation and Retirement: Some Evidence on the Role of Pensions and Social Security in the 1970s and 1980s," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 757-83, October.
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