Business Intelligence

Decomposing Changes In The Aggregate Labor Force Participation Rate

Free registration required

Executive Summary

This paper presents a simple methodology for decomposing changes in the aggregate Labor Force Participation Rate (LFPR) over time into demographic group changes in labor force participation behavior and in population share. The purpose is to identify the relative importance of behavioral changes and population changes as driving forces behind changes in the aggregate LFPR. The percent of the population willing to supply their labor to the market can have a profound impact on the potential growth of the economy. Human capital is an important component of the production process and an ever growing supply of labor allows an ever growing level of production without putting too much pressure on costs and, thus, prices of final products.

  • Format: PDF
  • Size: 179.9 KB