Employment opportunities and labor force participation

Conclusions

The research reported here provides a link between expected mix of job opportunities and labor force participation rates for various demographic groups in the working age population. The model produced statistically significant results, generally, for the expected employment opportunities indices, and appears to be a useful device for analyzing labor force participation changes in reaction to varying employment opportunities.

The empirical results give further evidence of the existence of a dual labor market in which several worker groups, encompassing younger and older workers and non-family heads, are not as strongly attached to the labor force as prime age males. In particular, percentage increases in job seekers in secondary labor force groups induced by expanding employment opportunities may well exceed percentage increases in employment opportunities in an area. These groups' labor force participation elasticities with respect to employment opportunities are usually greater than one, thus adversely affecting attempts to reduce the “official unemployment” problems of these secondary groups.

Given the greater difficulties these so-called marginal or secondary workers have in finding employment, manpower planners need to anticipate shifts in the labor force composition in assessing needs to be met through job creation and manpower programs. In particular, the results suggest that selective job creation and training programs may be necessary to solve unemployment problems.

Finally, this research provides additional evidence demonstrating the inadequacy of unemployment counts to show the total number of persons desiring a job and, thus, the total size of the “employment problem” faced in a labor market. Moreover, the number of hidden unemployed who will became active job seekers as job openings develop is related to the mix of specific job openings as well as to the demographic mix of the population age 16 years and over.