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Discouraged or Added Worker Effect: Which One Prevails in the Polish Labour Market?

Gałecka-Burdziak, Ewa and Pater, Robert (2016) Discouraged or Added Worker Effect: Which One Prevails in the Polish Labour Market? Acta Oeconomica, 66 (3). pp. 489-505. ISSN 0001-6373

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Abstract

Abstract We test whether the discouraged worker or added worker effect prevails in the Polish labour market. The discouraged worker effect implies that the participation rate is procyclical with respect to the GDP and countercyclical with respect to the unemployment rate. The added worker effect yields contrary findings. We analyse the period 1994–2014 with quarterly data. We focus on the working age population, both males and females. We apply a range of methods to obtain robust results, some of which have never been employed to resolve this problem. They include ad hoc filtration, spectral analysis, unobserved component model, time-varying parameter model, and frequency domain regression. The results indicate that the added worker effect prevails in most of the business cycle frequencies. It is significant and varies over time. It is true for both males and females. It is considerably stronger in contractions than in expansions. In low business cycle frequencies, the discouraged worker effect prevails. Although the last case is rare, it proves the heterogeneity of labour force behaviour over the business cycle.

Item Type: Article
Subjects: H Social Sciences / társadalomtudományok > H Social Sciences (General) / társadalomtudomány általában
Depositing User: László Sallai-Tóth
Date Deposited: 07 Oct 2016 06:53
Last Modified: 30 Sep 2018 23:15
URI: http://real.mtak.hu/id/eprint/41694

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