Abstract
This article studies a long-run relationship between the labour-force participation rate and the unemployment rate in Japan. By using cointegration analysis, we demonstrate that there exists a long-run relationship between the two variables for male workers but not for female workers. Furthermore, using labour-force data by age group, we find the added-worker effect for young males and the discouraged-worker effect for middle-aged and old male groups.
Notes
1 The unemployment invariance hypothesis suggests that the long-run unemployment rate is independent of the labour force. While Layard et al. (Citation1991) provided evidence in support of this hypothesis, Karanassou and Snower (Citation2004) provided a critique of it.
2 The data for the sample period are released from the website of the Japanese Ministry of Internal Affairs and Communications, http://www.stat.go.jp/.