A Disaggregated Annual Model of Labor Supply and Unemployment, 1951-2000

Coen, R.M. & Hickman, B.G. (1980). A Disaggregated Annual Model of Labor Supply and Unemployment, 1951-2000. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-80-015

Preview

Text WP-80-015.pdf Download (980kB) | Preview

Abstract

The quantity of man-hours available as a factor input is one of the principal determinants of an economy's potential output. Although such a measure of labor supply may be strongly influenced by population developments, there are several aspects of economic behavior that intervene between growth of population and growth of man-hours. These include the willingness of individuals to join the labor force, the aggregate employment rate of those in the labor force, and hours worked per employee. In the United States, for example, the working-age population was 53 percent larger in 1977 than in 1947, yet aggregate man-hours worked increased by only 40 percent, and private man-hours rose by only 27 percent.

This paper presents an integrated empirical analysis of the links between population and labor supply. Determinants of labor force participation by age and sex, annual hours per worker, and the unemployment rate are examined for the post-World War II period. The relations estimated for these variables are designed for use in a new version of the Hickman-Coen annual growth model of the United States, but we take advantage here of the fact that they form a subsystem which jointly determines the supply of man-hours, the high-employment unemployment rate, and the natural rate of unemployment. We show how the subsystem can be so used and give conditional estimates of these variables for the historical period 1951-77 and the future through the year 2000.

Actions (login required)

View Item