Labor force participation and the discouraged worker effect

Dagsvik, John K.; Kornstad, Tom; Skjerpen, Terje

doi:10.1007/s00181-012-0598-9

Cited by 35 publications

(18 citation statements)

References 21 publications

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“…The labor force by age and gender distributed by the various resident population groups depends on after-tax consumer real wages in addition to a discouraged worker effect; see Gjelsvik (2013b). These equations are estimated using employment survey data but are in line with the results in Dagsvik et al (2013) as well as Dagsvik and Strøm (2006). Unemployment is simply the difference between the labor force (supply) and employment.…”

Section: The Labor Marketmentioning

confidence: 98%

Deunionization and job polarization – a macroeconomic model analysis for a small open economy

Brasch

Gjelsvik²,

Sparrman

2018

Economic Systems Research

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Declining unionization rates and job polarization are two important labor market developments of recent decades. A large body of literature has analysed these phenomena separately, but little has been done to see whether there is a link between them. We employ a macroeconomic model for a small open economy with a large input-output core to analyse how deunionization may cause job polarization. Our analysis shows that medium-skilled workers are negatively affected by deunionization, mainly as a result of the heterogeneity of the elasticities of substitution between different types of labor. While the elasticities of substitution between highand medium-skilled labor are relatively low, the elasticities of substitution between medium-and low-skilled are relatively high. As a result, when deunionization leads to increased wage dispersion, we find that demand for low-skilled increases at the expense of medium-skilled labor, thus yielding a more polarised labor market. We would like to thank Pål Boug, Ådne Cappelen, Håvard Hungnes and Ingrid Bjartveit Krüger for inspiration and discussions, to Roger Hammersland for technical support in designing an automatic procedure for estimating the system of cost share equations and to Jørgen Ouren for carrying out the calculations. We also benefited from discussions during a presentation at

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Section: The Labor Marketmentioning

confidence: 98%

Deunionization and job polarization – a macroeconomic model analysis for a small open economy

Brasch

Gjelsvik²,

Sparrman

2018

Economic Systems Research

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“…Whether a person decides to work or not they evaluate the expected benefits from job search and state of labour market and in the process a significant part of the unemployed becomes discouraged. In particular, in European countries discouraged worker effect is rather high among women indicating the undervaluation of female unemployment (Ozerkek, 2013;Dagsvik, Kornstad and Skjerpen, 2013). At the same time high level of UR not always pushes from seeking job although new members of labour force have little chance for work.…”

Section: Ate (Ur) In European Countries During Years 2002-2015mentioning

confidence: 99%

Evidence of Asymmetries and Nonlinearity of Unemployment and Labour Force Participation Rate in Ukraine

Lukianenko¹,

Oliskevych²

2017

Prague Economic Papers

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With respect to instability and structural changes for maintaining effective functioning of economy an important issue is to study the dynamics of processes in the labour market, including labour supply and employment. Considering negative demographic trends and an acute problem of population aging in Ukraine the article presents an empirical research of the dynamics of labour force participation and unemployment rate, as well as the correlation relationship between them in various periods of time. On the basis of threshold-disturbance moving average and threshold-disturbance autoregressive models there are elicited significant asymmetric reactions of labour force participation rate, unemployment rate and productivity to positive and negative macroeconomic shocks. For modelling the asymmetric behaviour of economic activity of population there is developed a nonlinear logistic smooth transition autoregressive model. In the result of econometric analysis there is received large estimated value of slope parameter which characterizes the smoothness of transition. This indicates that the economic activity of the population in Ukraine quickly reacts to the previous changes that took place in the labour market. In times of crisis Ukrainian households increase labour supply and show increased activity in job search in order to prevent the decline of their income.

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“…Assuming ε is logistically distributed, the probability of being employed given that the female is in the labour force (q), is given by the well known logit model, Dagsvik, Kornstad and Skjerpen (2012) for a similar specification. Alternatively, the model can be written with 1 it q − on the left-hand side, which is the probability of being unemployed for agents with characteristics X 1 who experience the macroeconomic shock represented by a significant element in X 2 .…”

Section: Logit Model With Variables Representing Frictionsmentioning

confidence: 99%

“…That said, Dagsvik et al (2012) report results where their model besides choice variables contains year-dummies that are intended to capture effects stemming from the business cycle. In this paper, we treat the choice and chance dimension symmetrically in the unrestricted model formulation, and we test econometrically, for married and cohabitating women in the work force, the hypothesis that the probability of being employed depends on the business cycle.…”

Section: Introductionmentioning

confidence: 99%

Macroeconomic shocks and the probability of being employed

2013

Self Cite

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Macroeconomic theories take polar views on the importance of choice versus chance. At the micro level, it seems realistic to assume that both dimensions play a role for individual employment outcomes, although it might be difficult to separate these two effects. Nevertheless the choice and chance dimension are seldom treated symmetrically in models that use micro data. We estimate a logistic model of the probability of being employed among married or cohabitating women that are in the labour force. Besides variables that measure individual characteristics (choice), we allow a full set of indicator variables for observation periods that represent potential effects of aggregate shocks (chance) on job probabilities. To reduce the number of redundant indicator variables automatic model selection is used, and we assess the economic interpretation of the statistically significant indicator variables with reference to a theoretical framework that allows for friction in the Norwegian labour market. In addition, we also estimate models that use female and male unemployment rates as 'sufficient' variables for the chance element in individual employment outcomes. Data are for Norway and span the period 1988q2−2008q4.

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Labor force participation and the discouraged worker effect

Cited by 35 publications

References 21 publications

Deunionization and job polarization – a macroeconomic model analysis for a small open economy

Deunionization and job polarization – a macroeconomic model analysis for a small open economy

Evidence of Asymmetries and Nonlinearity of Unemployment and Labour Force Participation Rate in Ukraine

Macroeconomic shocks and the probability of being employed

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