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

21 Pages Posted: 6 Oct 2012

See all articles by Zeynel Abidin Ozdemir

Zeynel Abidin Ozdemir

Economic Research Forum (ERF); IZA Institute of Labor Economics

Mehmet Balcilar

University of New Haven

Aysit Tansel

Middle East Technical University (METU) - Department of Economics; IZA Institute of Labor Economics; Economic Research Forum (ERF)

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Abstract

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.

Keywords: labor force participation rates, structural change, stationarity

JEL Classification: C22, E24, J21

Suggested Citation

Ozdemir, Zeynel Abidin and Balcilar, Mehmet and Tansel, Aysit, Are Labor Force Participation Rates Really Non-Stationary? Evidence from Three OECD Countries. IZA Discussion Paper No. 6776, Available at SSRN: https://ssrn.com/abstract=2157918 or http://dx.doi.org/10.2139/ssrn.2157918

Zeynel Abidin Ozdemir (Contact Author)

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Mehmet Balcilar

University of New Haven ( email )

300 Boston Post Road
West Haven, CT 06516
United States

HOME PAGE: http://www.mbalcilar.net

Aysit Tansel

Middle East Technical University (METU) - Department of Economics ( email )

Inonu Bulvari
Ankara 06800
Turkey
90 312 210 2073 (Phone)
90 312 210 7964 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

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