Last week, my colleague, Sharon Donnery, outlined some particularly interesting results from forthcoming Central Bank research on some specific elements of the labour market recovery.4 The data shows that the overall recovery in employment growth is being driven by higher labour force participation, particularly for female and younger workers.5 Importantly, this increased participation does not seem to be driven, in recent quarters at least, by any structural changes arising from the pandemic.
Instead, for younger workers, the strength of the economic recovery has driven increased participation, while for women, increased participation is part of a longer-term trend driven by a “cohort effect”, due to women aged 35-59 being far more likely to participate in the labour market than women of a similar age in previous decades.