The Driving Force of Labor Force Participation in Developed Countries
Russian Academy of Sciences (RAS) - Institute for the Geospheres Dynamics
University of Warwick
May 1, 2008
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.
Number of Pages in PDF File: 29
Keywords: labor force participation, real GDP per capita, prediction
JEL Classification: C2, E6, J2
Date posted: May 7, 2008
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