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Asymmetry and Non-linearity in Discouraged and Added Worker Effects

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  • Emilio Congregado
  • Ewa Gałecka-Burdziak
  • Antonio Golpe
  • Robert Pater

Abstract

We examine whether discouraged and added worker effects are state-dependent, business cycle phase-dependent, or change stochastically. We use quarterly LFS data for the 1995–2016 period for Poland. Labor force participation rate behaves non-linearly. The change is rapid and connected to the stable value of the cyclical unemployment rate. An unemployment rate higher than 13% implies a discouraged worker effect. Policy actions should aim to prolong the labor market activity (added worker effect) of females and older workers. Workers may be encouraged to reenter the labor market if their probability of finding a job is improved through active economic policy measures.

Suggested Citation

  • Emilio Congregado & Ewa Gałecka-Burdziak & Antonio Golpe & Robert Pater, 2020. "Asymmetry and Non-linearity in Discouraged and Added Worker Effects," Eastern European Economics, Taylor & Francis Journals, vol. 58(3), pages 221-241, May.
    • Handle: RePEc:mes:eaeuec:v:58:y:2020:i:3:p:221-241
    DOI: 10.1080/00128775.2019.1710215
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    Cited by:

    1. Maridueña-Larrea, Ángel & Martín-Román, Ángel L., 2023. "The asymmetric cyclical behaviour of female labour force participation in Latin America," MPRA Paper 117408, University Library of Munich, Germany.
    2. Martín-Román, Ángel L., 2022. "Beyond the added-worker and the discouraged-worker effects: the entitled-worker effect," Economic Modelling, Elsevier, vol. 110(C).
    3. Congregado, Emilio & Gałecka-Burdziak, Ewa & Golpe, Antonio A. & Pater, Robert, 2021. "Unemployment invariance hypothesis and structural breaks in Poland," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).

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