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The Economics of Labor Force Participation

The Economics of Labor Force Participation

William G. Bowen
T. Aldrich Finegan
Copyright Date: 1969
Pages: 924
Stable URL: http://www.jstor.org/stable/j.ctt183pm27
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    The Economics of Labor Force Participation
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    eISBN: 978-1-4008-7477-4
    Subjects: Business
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Table of Contents

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  1. Front Matter (pp. i-iv)
  2. Preface (pp. v-viii)
    WGB and TAF
  3. Table of Contents (pp. ix-xvi)
  4. List of Tables (pp. xvii-xxiii)
  5. List of Figures (pp. xxiv-xxvi)
  6. PART I: FRAMEWORK OF THE STUDY
    • CHAPTER 1 Introduction: Scope, Organization, and the Labor Force Concept (pp. 3-15)

      “Labor force status” is a deceptive phrase—deceptive in that it sounds so innocuous. For the individual, his (or her) labor force status is one of the major influences on his entire way of life. And it is not just economic well-being that is involved. The importance of a job to a person’s status and sense of personal identity has been stressed by many people writing about many different kinds of societies.¹ For the country at large, the proportions of various population groups in the labor force both affect and reflect the overall rate of economic growth, the economic circumstances...

    • CHAPTER 2 The Conceptual Framework and Method of Analysis (pp. 16-36)

      In arriving at some a priori notions concerning the determinants of labor force participation rates, we have found it helpful to work within the context of a simple version of the general theory of choice. Appendix 2-A contains an algebraic exposition of the very general model which has served as the starting point for the design of the particular, much more specific, models used in our own empirical work. The formal statement of the general model has been relegated to the appendix because it contains nothing that is at all new from the standpoint of the development of this body...

  7. PART II: EXPLAINING LABOR FORCE PARTICIPATION
    • CHAPTER 3 Prime-Age Males: Individual Characteristics (pp. 39-74)

      In our terminology, prime-age males are those men 25 to 54 years of age. We apologize for the designation “prime-age,” recognizing that it has beef-cattle connotations;¹ it is used here only because we were unable to think of a better title for that segment of the population which has a nearly universal predilection for labor force participation. In 1967, about 97 percent of all males 25 to 54 years of age in the noninstitutional population of the United States were in the labor force, and data for other countries show that this is the prime age span for labor force...

    • CHAPTER 4 Prime-Age Males: Labor Market Conditions (pp. 75-87)

      In this chapter we examine the effects of labor market conditions on the participation of prime-age males. As explained earlier, it is the metropolitan area, not the individual, that serves as the main unit of observation in this part of our analysis.¹ The task at hand, then, is to see to what extent differences among areas in the labor force participation rates of prime-age males can be explained in terms of differences in labor market conditions.

      To be sure, “labor market conditions” is an amorphous phrase, for the good reason that it has many dimensions. Here we shall be looking...

    • CHAPTER 5 Married Women: Individual Characteristics (pp. 88-158)

      In March of 1967, approximately 16 million married women were in the United States labor force—one out of every five participants was a married woman. And, lest anyone think that these women tend to be mainly part-time workers, it should be noted that roughly three-fourths of them were classified as full-time participants.¹ The earnings of these women serve as a rough measure of their direct contribution to the production of marketable goods and services, and we estimate that in 1965 they earned a total of approximately 36 billion dollars.²

      To say that married women have not always played such...

    • CHAPTER 6 Married Women: Labor Market Conditions (pp. 159-196)

      Whatever their other vagaries, married women are an exceedingly well-behaved group from the standpoint of their labor force participation. We have seen in the previous chapter that various individual and household characteristics — especially color, presence of children, schooling of the wife, occupation of the wife, and other family income—are associated with the labor force participation of married women 14–54 in highly systematic and predictable ways. This chapter shows that an equally strong statement can be made concerning the effects of labor market conditions.

      As in the case of prime-age males, our primary source of evidence concerning the...

    • CHAPTER 7 Trends in the Participation of Married Women (pp. 197-241)

      Our task in this chapter is to see what the preceding cross-sectional analysis of factors affecting the participation decisions of married women can contribute to our understanding of the pronounced upward trend in their participation rate. In principle, one ought to rely heavily on a proper time-series analysis in explaining such changes. However, for reasons mentioned in the previous chapter and elaborated in Chapter 16, we feel that our time-series regressions are rather unsatisfactory—especially from the standpoint of isolating the effects of different variables on long-period changes in the participation rate of a population group such as married women...

    • CHAPTER 8 Single Women 25–54 (pp. 242-269)

      In this chapter we examine the labor force participation of all those women 25 to 54 years old who arenotmarried with husband present. From many standpoints this is an extremely heterogeneous group. It contains women who have never married as well as women whose husbands are no longer present (due to death, divorce, separation, or other reasons); it also contains women who are heads of families, women living in families where someone else is the head, and women living alone. Nonetheless, the characteristic all these women have in common—no husband in the home — is sufficiently important...

    • CHAPTER 9 Older Persons: Individual Characteristics (pp. 270-334)

      In the lexicon of this study, we have designated all persons over 54 years of age as “older persons”—mainly because we could not think of any other generic term to describe them. The reason for including all persons over 54—males and females, married and unmarried, those in their late fifties and those over seventy—in the same chapter is that they share the characteristic of being “retirement-prone.” Or, to describe their main unifying characteristic in somewhat different terms, a substantial fraction of persons over 54 who withdraw from the labor force no doubt do so permanently, whatever their...

    • CHAPTER 10 Older Persons: Labor Market Conditions (pp. 335-350)

      If, as we have seen, the individual characteristics of older persons are important in explaining their participation decisions, so too are the characteristics of local labor markets. In analyzing the effects of labor market conditions, we shall rely mainly on the same kinds of intercity regressions described at length in previous chapters. Since all the principal variables in this analysis have already been introduced, all that is needed here is a brief explanation of the organization of this chapter.

      We begin by presenting the results of our 1960 intercity regressions for various groups of older persons living in urban areas,...

    • CHAPTER 11 Trends in the Participation of Older Persons (pp. 351-379)

      The postwar record reveals a sharp contrast between the trends in labor force participation rates for older men and older women. As can be seen from Table 11-1 and Figure 11-1, the proportion of older men in the labor force has declined markedly at the same time that the proportion of older women in the labor force has, in general, tended to rise.

      It is the large decrease in labor force participation on the part of men 65 and over—their participation rate having fallen by almost 20 percentage points between 1948 and 1965 — that is of greatest interest,...

    • CHAPTER 12 Younger Persons: Individual Characteristics (pp. 380-418)

      The final three chapters of Part I are concerned with persons 14–24 years old—“younger persons” for short.

      Appraising the determinants of this group’s participation is greatly complicated by the fact that a large fraction of younger persons are in school. Not surprisingly, those enrolled in school are less inclined to seek market work than those who are not in school. The crux of the problem is that the enrollment and participation decisions of an individual are interrelated, and some factors have quite different effects of each one considered separately. For example, a rise in unemployment may discourage participation...

    • CHAPTER 13 Younger Persons: Labor Market Conditions (pp. 419-457)

      One of the frustrating aspects of the analysis of individual characteristics described in Chapter 12 is that we often end up with results which neither support nor rebut any hypothesis of great interest. The present chapter provides a happy contrast. The results reported here demonstrate conclusively that labor market conditions have had pronounced effects on the labor force participation rates, enrollment rates, and activity rates of younger persons. In addition, the differential effects on subgroups classified according to age and enrollment status are just as interesting as the overall pattern revealed by this analysis.

      Nearly all the evidence presented in...

    • CHAPTER 14 Younger Males: Trends in Participation, Enrollment, and Activity Rates (pp. 458-476)

      In this chapter we present an overview of recent trends in participation, enrollment, and activity rates of younger males, as well as some conjectures about the economic and demographic forces responsible for these trends. For want of data, we are unable to apply the more rigorous analytical methods of Chapters 7 and 11 to the findings for younger males or to say anything about the trends for never-married younger females.¹ For the same reason, the scope of this survey is confined to the period since 1940, with our main attention being directed to the data gathered by the CPS during...

  8. PART III: UNEMPLOYMENT AND LABOR FORCE PARTICIPATION
    • CHAPTER 15 Unemployment and Labor Force Participation: Cross-Sectional Relations (pp. 479-504)

      In his pioneering study of labor force participation, published in 1958, Clarence Long concluded that the size of the labor force tends to shrink in severe depressions, as the discouragement hypothesis predicts, but that lesser changes in the economic climate probably have no appreciable effect on participation rates. He wrote:

      Inasmuch as the violent unemployment fluctuation of the 1930’s and early 1940’s has been unique in our recorded history, it would seem that, except under unusual circumstances, the labor force is not influenced by thequantityof employment opportunities, i.e., the percent of those in the labor force who are...

    • CHAPTER 16 Unemployment and Labor Force Participation: Time-Series Relations (pp. 505-529)

      Having examined the relations between unemployment and labor force participation in cross-sectional data, we turn now to the associations between these variables in the time-series data for the postwar period.

      While the task of reconciling the findings of cross-sectional and time-series regressions is never easy, it is particularly formidable when one is dealing with labor force participation rates. Three related difficulties—one conceptual, the other two empirical—lie at the root of this problem.

      First and most important is the fact that the dynamics of short-run changes in labor force participation are simply not well understood. That is, we lack...

    • CHAPTER 17 Unemployment and Labor Force Participation: Some Evidence from the 1963–1967 Boom (pp. 530-538)

      From 1958 to 1963, the American economy experienced two sharp recessions and two incomplete recoveries. During this period of chronic slack, the overall unemployment rate never fell below 5.0 percent and averaged 5.9 percent. The next four years witnessed a sustained economic expansion that reduced the jobless rate from 5.7 percent in 1963, to 5.2 percent in 1964, to 4.5 percent in 1965, and finally to 3.8 percent in 1966 and 1967—the lowest rate since the Korean War. In this chapter we shall attempt to assess the effects of tighter labor markets on labor force participation during this prolonged...

  9. APPENDICES
  10. INDEX (pp. 889-897)