TNguyen said:lol u wrote the complete opposite to me.... but rise in participation doesnt mean rise in employment, it's actually the opposite. Just means more ppl willing to work but not actually in jobs
I wrote the same thing.klaw said:What I wrote was that economic growth leads to an increased demand in labour to meet the increase in demand for goods and services. This in turn causes wages to rise, and thus the labour participation increases as the rise in income acts as a disincentive for the aged to retire early and encourages mothers to join the workforce. This then leads to an increase in total income of the economy, and thus the demand for imports rise and the CAD will worsen. Furthermore, if the rate of economic growth is less than the increase in productivity and size of the labour force, unemployment will decrease in accordance to Okun's law.