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Labor Force Participation in Chile: Recent Trends, Drivers, and Prospects
Author:
Patrick Blagrave
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and
Marika Santoro null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 054
Language:
English
Publication Date:
13 Mar 2017
DOI:
https://doi.org/10.5089/9781475586213.001
ISBN:
9781475586213
ISSN:
1018-5941
Pages:
25
Keywords:
WP; participation rate; labor force participation rate; labor force; Labor force partipation; female labor force participation; potential output; aggregate participation rate; cohort effect; participation-rate dynamics; OECD labor force statistics; participatio nrate; cohort model; cohort-age profile; growth slowdown; Labor force participation; Aging; Women; Labor supply; Global
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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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund