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E. Loichinger, A. Fürnkranz-Prskawetz:
"Changes in Economic Activity: The Role of Age and Education";
Report for IIASA Working Paper; Report No. 012, 2016; 24 pages.

The aim of the paper is to understand to which extend developments of labor force
participation rates in selected European countries between 2000 and 2010 can be
explained by age- and education-specific changes in participation rates as compared to
changes in populations´ structural composition by age and education. We apply a
decomposition methodology that allows us to disentangle changes in age- and educationspecific
labor force participation rates from changes in the age and educational structure
of the population.
Our results show that labor force participation rates of adult women would have increased
even more, had it not been for the downward pressure from the shift in the age
composition towards older age-groups with relatively lower levels of participation. This
downward pressure also depressed male participation. The increase in participation
among older persons is mainly explained by participation increases among those with
non-tertiary education and reinforced by a general shift towards higher levels of
educational attainment. Our results indicate that labor supply may not decrease to the
extent expected due to population aging, given educational expansion and educationspecific
patterns of economic activity.