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Asymmetric labour force participation decisions

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This article finds compelling evidence of asymmetric labour force participation decisions across demographic groups in response to changes in labour market conditions. This behaviour is consistent with predictions from the standard labour-leisure choice model and suggests that asymmetry in individual behaviour plays some role in the observed asymmetry of the aggregate unemployment rate. It is estimated that the weighted average difference in response to a one percentage point change in unemployment rates is sizeable when compared to the average monthly change in the aggregate labour force.
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Keywords: J22; J64; aggregate unemployment; asymmetric effects; labour force participation; labour supply

Document Type: Research Article

Affiliations: Research Department,Federal Reserve Bank of Atlanta, 1000 Peachtree Street NEAtlanta,GA 30039-4470, USA

Publication date: 2012-06-01

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