Okun coefficients and participation coefficients by age and gender

Andrew Evans

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)
10 Downloads (Pure)

Abstract

Estimates of the Okun coefficient are made for Australian workers grouped by age and gender using an unobserved components model. By analogy we define and estimate a participation coefficient which measures the cyclical response of the labour force participation rate to cyclical output shocks. The trend and cycle decomposition methodology used here leads to higher absolute estimates of the Okun coefficient than those typically found in the literature, although we find a pattern of variation in the coefficient by age and gender which is typical. We also find that, in aggregate, participating males in the middle age groups tend to stay in the labour force throughout the business cycle whereas females of the same age tend to participate procyclically. This has policy implications for attempts to increase the rate of participation of particular groups by age and gender following a cyclical downturn.
Original languageEnglish
Article number5
Pages (from-to)1-22
Number of pages22
JournalIZA Journal of Labor Economics
Volume7
Issue number1
DOIs
Publication statusPublished - 28 Jun 2018

Bibliographical note

Copyright The Author(s) 2018. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

  • Okun's Law
  • Labour force participation
  • Trend and Cycle Decomposition

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