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A new estimate of discouraged and additional worker effects on labor participation by sex and age in OECD countries

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  • Olivier Filatriau

    (INSEE - Institut national de la statistique et des études économiques (INSEE))

  • Frédéric Reynés

Abstract

This article proposes a new approach to estimate the effect of the unemployment rate on the labor participation ratio by sex and age. OECD labor participation ratios are estimated within an unobservable component model with the Kalman filter. This allows for treating the trend of the participation rate as a stochastic time varying parameter. This improves the quality of the econometric results by allowing for a better identification of changes in the trend than the most common alternatives using determinist and logistic trends. Moreover the use of cross-section OECD circumvents the problem of the lack of long time series data. We find that OECD labor participation ratio are sensitive to the labor market situation in all sex and age categories and that the discouraged worker effect dominates the additional worker effect although the latter is clearly present for women.

Suggested Citation

  • Olivier Filatriau & Frédéric Reynés, 2012. "A new estimate of discouraged and additional worker effects on labor participation by sex and age in OECD countries," Working Papers hal-03476015, HAL.
    • Handle: RePEc:hal:wpaper:hal-03476015
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03476015v1
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    References listed on IDEAS

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    Cited by:

    1. Emilio Congregado & Ewa Galecka-Burdziak & Antonio A. Golpe & Robert Pater, 2021. "Separating aggregate discouraged and added worker effects: the case of a former transition country," Oeconomia Copernicana, Institute of Economic Research, vol. 12(3), pages 729-760, September.

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