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Article
Publication date: 1 October 2018

Aysit Tansel and Zeynel Abidin Ozdemir

The purpose of this paper is to explore the long-run relationship between unemployment rate (UR) and labor force participation rate (LFPR) for men and women in Canada. Given that…

Abstract

Purpose

The purpose of this paper is to explore the long-run relationship between unemployment rate (UR) and labor force participation rate (LFPR) for men and women in Canada. Given that there are differences in the URs and participation rates of men and women, the authors perform separate analysis for them also.

Design/methodology/approach

The authors use co-integration analysis to investigate the existence of a long-run relationship between UR and LFPR in Canada using time series monthly data for the past 40 years.

Findings

The finding that there is long-run relationship between UR and LFPR leads the authors to doubt the pertinence of the unemployment invariance hypothesis for Canada. The authors further find evidence for added-worker effect for men and discouraged-worker effect for women in Canada and the authors elaborate on the possible explanations for this seemingly contradictory finding.

Practical implications

The lack of support for the unemployment invariance hypotheses implies that changes in the participation rate which may be due to aging population, policies of early retirement or constraints on working time will affect the UR in the long run.

Originality/value

This paper investigates the unemployment invariance hypothesis in Canada to come up with policy implications about long-run UR. The authors further elaborate on the possible explanations for the added-worker effect for men and the discouraged-worker effect for women that the authors find in this study.

Details

International Journal of Manpower, vol. 39 no. 7
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 3 August 2015

William Baah-Boateng

The purpose of this paper is to establish the concept of unemployment defined by the International Labour Organisation appears to be too narrow within the context of many African…

3091

Abstract

Purpose

The purpose of this paper is to establish the concept of unemployment defined by the International Labour Organisation appears to be too narrow within the context of many African countries including Ghana. This phenomenon tends to put many jobless adults into the discouraged worker category thereby giving a misleading picture about the unemployment situation in these countries. In addition, the structure of the labour market in many African countries is such that informality takes the face of unemployment.

Design/methodology/approach

The paper uses a scatter plot and simple correlation analysis to show a trade-off between informality or vulnerability of employment and unemployment rates in Africa. The paper also adopts descriptive approach based on simple diagrams to show the extent of discouraged worker effect on the phenomenon of unemployment.

Findings

The paper finds a significantly negative correlation between unemployment and informality in Africa. Beside the high level of informality that hides the face of unemployment, the exclusion of many discouraged workers in estimating unemployment underrates the seriousness of the phenomenon. The paper therefore recommends the adoption of a broader definition of unemployment that accounts for discourage workers and underemployment to show the true picture of labour market challenge in Africa. Additionally, targeted programmes to support and transform the informal sector is required to make it a more attractive means of employment rather than being seen as a refuge point for the unemployed in Africa.

Originality/value

The observation that unemployment should be looked at from a broader perspective that accounts for discourage workers to inform policy design forms a base of the paper’s contribution to the body of literature. In addition, the high level of informality that hides the problem of unemployment shows that labour market challenges should not be restricted to unemployment but low quality of employment that characterises informality as well.

Details

International Journal of Manpower, vol. 36 no. 5
Type: Research Article
ISSN: 0143-7720

Keywords

Open Access
Article
Publication date: 25 May 2021

Francesco Nemore, Rocco Caferra and Andrea Morone

Our main purpose is to test the unemployment invariance hypothesis in Italy.

1805

Abstract

Purpose

Our main purpose is to test the unemployment invariance hypothesis in Italy.

Design/methodology/approach

This paper provides an empirical investigation of the unemployment and labor force participation in Italy.

Findings

Cointegration analysis results strongly suggest a clear long-run relationship between unemployment and labor force participation revealing a persistent and general added worker effect.

Originality/value

Our results seem to confute the unemployment invariance hypothesis.

Details

International Journal of Manpower, vol. 42 no. 8
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 18 March 2022

Isiaka Akande Raifu and Oluwafemi Mathew Adeboje

The purpose of this study is to examine the existence of discouraged worker effect hypothesis and unemployment invariance hypothesis in Africa, including its five regional groups…

Abstract

Purpose

The purpose of this study is to examine the existence of discouraged worker effect hypothesis and unemployment invariance hypothesis in Africa, including its five regional groups. Specifically, the study tests the existence of co-integration between different categories of labour force participation and unemployment rate, total male and female labour force participation and the unemployment rate for age brackets 15–24, 15–64 and 15+, respectively.

Design/methodology/approach

The study uses the data of 52 countries in Africa which cover the period from 1991 to 2018. Three co-integration estimation techniques namely, the Kao co-integration test, Pedroni co-integration test and Westerlund co-integration test are used to validate the existence of co-integration between the labour force participation and unemployment rate. The dynamic ordinary least square is further used to explore the impact of the unemployment rate on labour force participation, while the pooled ordinary least squares (POLS) that accounts for individual country and time effects is employed for robustness check.

Findings

Except for Southern Africa, it is found that the discouraged worker effect hypothesis holds in Africa and the rest of its regions. This suggests that there is a long-run relationship between labour force participation rate and unemployment rate irrespective of age group and gender classifications. To some extent, the authors discover the existence of cross-sectional dependence in the panel. There is also an inverse relationship between labour force participation and the unemployment rate. This implies that when the unemployment rate is high, labour force participation tends to decline. The results are, however, sensitive to the choice of estimation method.

Research limitations/implications

The study is limited to the examination of linear co-integration between labour force participation and the unemployment rate in Africa and its five regions. The future study can investigate the possibility of a nonlinear or an asymmetric relationship between labour for participation and the unemployment rate.

Social implications

Thus, a policy framework that would generate employment creation is greatly required in Africa.

Originality/value

To the best of the authors’ knowledge, this is a pioneer work that addresses the issue of co-integration between labour force participation and unemployment rate for Africa and its five regions taking into consideration gender and age brackets of labour force participation and unemployment.

Details

African Journal of Economic and Management Studies, vol. 13 no. 2
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 8 August 2018

Oxana Krutova, Pertti Koistinen and Tapio Nummi

The purpose of this paper is to outline the study to determine whether the dual earner model better offsets the actual risk of unemployment compared to other household models.

Abstract

Purpose

The purpose of this paper is to outline the study to determine whether the dual earner model better offsets the actual risk of unemployment compared to other household models.

Design/methodology/approach

The authors linked the partner effect (household type) with macroeconomic institutional settings, such as employment protection, the active labour market policy, economic growth rate and globalisation, to study how these micro- and macro-level factors influence the unemployment risk of individuals.

Findings

Using European Labour Force Survey (EU-LFS) microdata for Finland from 2005 to 2013 and a multilevel modelling technique, the authors found that the partner effect is an important regulator of unemployment risks, but the effect is modified by institutional factors. Dual earners and breadwinners experience a less significant effect from employment protection legislation regulation and other external factors on the increase or decrease in unemployment risk compared to singles. The authors also found that unemployed singles are more exposed and vulnerable to fluctuations caused by economic events.

Originality/value

In this way, this paper contributes to the sociological theory of labour markets and a better understanding of how different household types buffer and mediate the risks of unemployment. The authors used the EU-LFS and novel multilevel analysis statistical solutions to determine the impact of macro- and micro-level factors. The case of Finland may also be of broader interest to researchers and policy-makers because of the long and strong tradition of the dual earner employment pattern and strong macro-economic fluctuations.

Details

International Journal of Sociology and Social Policy, vol. 38 no. 11/12
Type: Research Article
ISSN: 0144-333X

Keywords

Article
Publication date: 1 February 1975

ROBERT M. FEINBERG

The supply side of the labor market has too often been neglected in considering the effects of minimum wage legislation. Minimum wage effects on unemployment have been studied…

Abstract

The supply side of the labor market has too often been neglected in considering the effects of minimum wage legislation. Minimum wage effects on unemployment have been studied extensively, and the unemployment rate has been related in turn to the labor force participation rate. But the relationship between minimum wages and labor force participation has been almost completely ignored in the published literature.

Details

Journal of Economic Studies, vol. 2 no. 2
Type: Research Article
ISSN: 0144-3585

Article
Publication date: 1 May 2000

Gianna Claudia Giannelli and Chiara Monfardini

Household arrangements and human capital investment decisions of young Italians with a high school diploma are analysed. A model of the choices of residing with parents or forming…

Abstract

Household arrangements and human capital investment decisions of young Italians with a high school diploma are analysed. A model of the choices of residing with parents or forming a new family, jointly with those of investing in either work experience, or further education, or stopping investment is estimated. The results show that family background has a major impact on the decision to study, housing costs induce co‐residence, and unemployment increases the probability of studying. Education policies subsidising university studies on a merit ground would thus reduce income inequality, housing allowances would favour marriage, and labour policies would have the side‐effect of decreasing university dropouts.

Details

International Journal of Manpower, vol. 21 no. 3/4
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 15 February 2024

Walter Paternesi Meloni

We test the pertinence of the unemployment invariance hypothesis (UIH) for a set of Organisation for Economic Co-operation and Development countries.

Abstract

Purpose

We test the pertinence of the unemployment invariance hypothesis (UIH) for a set of Organisation for Economic Co-operation and Development countries.

Design/methodology/approach

We empirically investigate the nexus between unemployment and labour force participation employing structural vector autoregressive methods for panel data.

Findings

We find that shocks in unemployment produce long-lasting, negative effects on participation, testifying to a discouraged worker effect.

Originality/value

Our results do not support the validity of the UIH in high-income economies. This has relevant implications for policy making and macroeconomic models.

Details

International Journal of Manpower, vol. 45 no. 6
Type: Research Article
ISSN: 0143-7720

Keywords

Abstract

Details

Economic Modeling in the Nordic Countries
Type: Book
ISBN: 978-1-84950-859-9

Expert briefing
Publication date: 2 December 2015

Changing demography and socio-economic trends in the labour force.

1 – 10 of 258