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The Cyclical Behaviour of the Labour Force Participation Rate in Australia
Author(s) -
Evans Richard,
Moore Angus,
Rees Daniel M
Publication year - 2019
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12308
Subject(s) - recession , economics , unemployment rate , unemployment , demographic economics , cohort , labour economics , macroeconomics , medicine
We examine the cyclical relationship between labour market participation and economic activity in Australia. We find that the participation rate has a large and economically meaningful cyclical component. By cohort, the participation rates of young people, 25−54 year‐old females and older males are the most responsive to changes in economic conditions. If the participation rate did not adjust, expansions would be more inflationary; on the other hand, recessions would be more disinflationary and lead to larger increases in involuntary unemployment.