Chapter 3: Population, Participation Rates, and Hours of Work
It is necessary to evaluate or compute the amount of labor organizations. The cumulative supply of labor is influenced by the size of the population, the participating labor force, and the summation of each weekly and annual hour worked. The size of the population describes the total number of employable people in the industry; the participating labor force describes the total number of employed individuals and the summation of the weekly and annual hours worked refers to the sum amount of the amount of hours worked altogether by the participating labor force.
Becker’s model of time allocation is also used to illustrate the participation rates. The model perceives families as creating value- yielding products by merging time and goods. From this perspective, family members distribute their time to participating in the labor market, producing family utilities, and product consumption based on a comparative advantage. That is, the time allocation model rates the participation rate of the family based on the occurrence of these distributions in other families. The participation rate of the labor refers to the actual labor force in terms of the percentage of the employable population.
There has been an increase in the cumulative participation rate from 59% to 66% since after the Second World War. This increase is owing to the increased rate of participation of females, which resultantly offsets the diminishing rates of participation in their male counterparts. Older males constitute a major portion of the declining rates of participation in males. The diminishing rates of participation in older males are a result of: the increasing earnings; the accessibility of private and public annuities; increased access to disability allowances, and; age. These wage profiles indicate a continuous declination in the leisure costs for older employees. The increase in the rate of participation for females has been attributed to: increasing relative earning rates for females; increased labor market work preferences in females; increasing family productivity,; deteriorating birthrates; increased matrimonial instability; increased job accessibility; efforts to sustain family living standards. There is almost an identical rate of participation in African-American and white females. Initially African-American women participation rates exceeded the rates in white women. Continue reading