Labor Force Participation in Chile: Recent Trends, Drivers, and Prospects

March 13, 2017

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Patrick Blagrave, and Marika Santoro. Labor Force Participation in Chile: Recent Trends, Drivers, and Prospects, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Gains in labor force participation rates in Chile have slowed in recent years. We examine their determinants using a cohort-model analysis. Allowing for both age- and cohort-specific effects in the context of a seemingly unrelated regression equations (SURE) approach, we find that age factors play an important role in determining participation decisions, especially for males. For females, we find that strong positive time trends dominate the downward pressure from demographics, although those trends have recently dissipated. In addition, we find that both cohort effects and the business cycle shape participation decisions. Using our cohort-based analysis, we construct projections of participation rates, which suggest population aging will put downward pressure on labor inputs, and thus potential output, in coming years. Further increases in female labor force participation—supported by policies— could more than offset the downward pressure from demographics.

Subject: Aging, Education, Gender, Labor, Labor force, Labor force participation, Labor supply, Population and demographics, Women

Keywords: Aggregate participation rate, Aging, Cohort effect, Cohort model, Cohort-age profile, Female labor force participation, Global, Growth slowdown, Labor force, Labor force participation, Labor force participation rate, Labor force partipation, Labor supply, OECD labor force statistics, Participatio nrate, Participation rate, Participation-rate dynamics, Potential output, Women, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/054
Stock No:

WPIEA2017054
ISBN:

9781475586213
ISSN:

1018-5941

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