{
  "title": "Drivers of Labor Force Participation in Advanced Economies: Macro and Micro Evidence",
  "publication": "IMF Working Papers, June 25, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/06/25/drivers-of-labor-force-participation-in-advanced-economies-macro-and-micro-evidence-45977",
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  "summary": "Despite significant headwinds from population aging in most advanced economies (AEs), labor force participation rates show remarkably divergent trajectories both across countries and across different groups of workers.",
  "sections": [
    {
      "heading": "Executive summary and headline findings",
      "content": "- Despite significant headwinds from population aging in most advanced economies (AEs), labor force participation rates show divergent trajectories across countries and across groups of workers.\n- Participation increased sharply among prime-age women and, more recently, older workers, but fell among the young and prime-age men.\n- The bulk of the dramatic increase in labor force attachment of prime-age women and older workers in the past three decades can be explained by changes in labor market policies and institutions, structural transformation, and gains in educational attainment.\n- Technological advances such as automation weighed on the labor supply of prime-age and older workers."
    },
    {
      "heading": "Determinants and channels (macro and micro evidence)",
      "content": "- Labor market policies and institutions:\n  - Changes in activation policy and other labor market policies are identified as major drivers of rising participation for prime-age women and older workers.\n- Structural transformation:\n  - Shifts in industry employment ratios and structural change contributed to higher participation among some groups.\n- Education:\n  - Gains in educational attainment are a key explanatory factor for increased labor force attachment among prime-age women and older workers.\n- Technology and routinization:\n  - Automation and routinization-related technological advances exerted negative pressure on labor supply for prime-age and older workers."
    },
    {
      "heading": "Group-specific trends",
      "content": "- Prime-age women:\n  - Sharp increase in labor force participation over the past three decades, largely explained by policies, structural transformation, and education gains.\n- Older workers:\n  - Participation increased more recently; similar drivers to prime-age women apply, though automation weighed against this increase.\n- Prime-age men:\n  - Participation fell.\n- Young workers:\n  - Participation fell."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Invest in education and training to bolster labor supply in the face of demographic change.\n- Reform the tax system to improve labor supply incentives.\n- Reduce early retirement incentives to raise participation among older workers.\n- Improve the job-matching process to facilitate labor market attachment.\n- Help individuals combine family and work life (for example, through family-friendly policies) to alleviate pressures from aging on labor supply.\n\n---\n\n Content in this bundle\n\n- wp18150\n  - wp18150 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp18150 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/06/25/drivers-of-labor-force-participation-in-advanced-economies-macro-and-micro-evidence-45977"
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    "Authors: Francesco Grigoli, Zsoka Koczan, Petia Topalova",
    "Published: June 25, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484361528.001",
    "Despite significant headwinds from population aging in most advanced economies (AEs), labor force participation rates show divergent trajectories across countries and across groups of workers.",
    "Participation increased sharply among prime-age women and, more recently, older workers, but fell among the young and prime-age men.",
    "The bulk of the dramatic increase in labor force attachment of prime-age women and older workers in the past three decades can be explained by changes in labor market policies and institutions, structural transformation, and gains in educational attainment.",
    "Technological advances such as automation weighed on the labor supply of prime-age and older workers.",
    "Labor market policies and institutions:",
    "Structural transformation:",
    "Education:",
    "Technology and routinization:",
    "Prime-age women:",
    "Older workers:",
    "Prime-age men:",
    "Young workers:",
    "Invest in education and training to bolster labor supply in the face of demographic change.",
    "Reform the tax system to improve labor supply incentives.",
    "Reduce early retirement incentives to raise participation among older workers.",
    "Improve the job-matching process to facilitate labor market attachment.",
    "Help individuals combine family and work life (for example, through family-friendly policies) to alleviate pressures from aging on labor supply.",
    "**wp18150**"
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