Apparent Asymmetries in the Relationship Between the Participation Rate and the Employment Rate in Australia
A large number of empirical studies exist now for Australia reporting evidence consistent with the endogeneity of the participation rate. None of these models examine the possibility that the elasticity of the workforce with respect to employment might vary systematically over the business cycle. For the aggregate data set examined in this paper, it appears to be the case that the discouraged worker effect is smaller than the encouraged worker effect, indeed, the former appears to be approximately one-half the size of the latter effect.
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|Date of creation:||1996|
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