Labor Force Participation Rates: Unit Roots or Structural Breaks

What is it about?

This paper examines the time series properties of labor force participation rates for Australia, Canada and the USA. In particular, we investigate if unit roots prevail in the presence of endogenously determined multiple structural breaks. We extend the previous single structural break analysis to that of the multiple structural breaks. We analyse the total, female and male labor force participation rates of the forementioned countries. We find that the endogenously determined structural breaks render the labor force participation rates series stationary or at best mean reverting.

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Why is it important?

The unique feature of this work is that it extends the the case of single structural break to the possibility of multiple structural breaks.

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