Labour force participation and the business cycle: a comparative analysis of France, Japan, Sweden and the United States

This paper investigates the cyclical responsiveness of participation in the labour force. We examine systems of equations, disaggregated by age and ge nder, for France, Japan, Sweden and the US, using data from the OECD Labour Force Statistics, 1970-1995. We use measures of country specific business cycles following Harvey and Jaeger (1993) and test for asymmetric responses of participation to expansionary and contractionary phases of the cycle. O ur results show that discouraged worker effects are prevalent. These effect s are strongest in the downward phase of the cycle and are essentially a fe male phenomenon, with a particular concentration among 45-54 year olds. (C) 2001 Elsevier Science B.V. All rights reserved.