Overall unemployment, female labor force participation, and the discouraged worker effect

This paper analyzes the relationship between the aggregate unemployment rate and labor force participation of married, divorced and never married black and white females.  It addresses an interesting question that has persisted in the literature of labor economics, does an increase in the overall unemployment rate differentially impact various subsets of the labors force?

      A unique data set is used in our attempt to shed some empirical light on these two questions.  Yearly data is extracted from the March Supplement of the Current Population Survey.  The extraction process allows construction of a number of variables that would be difficult if not impossible to obtain directly from published sources.  Consequently, age will also be examined to determine if it has an impact on the discouraged worker phenomenon. 

      Two VAR’s will be formed.  One will include the labor force participation rates of black females and white females between the ages of 18 and 35 that are married, divorced, and never married along with the overall unemployment rate.  The other VAR will include the same variables for females between the ages of 36 and 60.  It is hoped that impulse response functions will provide worthwhile insight into the way that females respond to overall labor market changes.