Study of the labour force participation rates (LFPR) in Singapore

Abstract

Singapore has been enjoying prosperity and economic well being for the past decades. Although Singapore is small in size and has no natural resources of her own, she has a rich pool of human resources, which helps to contribute to her economic growth. According to the report of the Economic Committee, the labour force growth rate is one of the important determinants of Singapore's economic growth. And the factor that has the greatest influence on Singapore labour force growth rate is the labour force participation rate (LFPR). Given its significance, LFPR of Singapore necessarily needs to be better understood. This is precisely what this project aims to do. This project studies specific population sub-groups of Singapore namely the male labour force, female labour force, married women labour force, younger persons labour force and older persons labour force. Each of these population sub-groups is analyzed individually based on their respective postulated variables. A multiple regression analysis is then carried out to test the significance of those postulated variables. The study reveals that earnings and enrolment are both significant in determining the LFPR of the male labour force. As for the female labour force, earnings, GNP rate of change, education and male unemployment are all significant in determining the LFPR, while earnings and children are the most important determinants of the married women LFPR. The results also show that rate of change of GNP and enrolment are the key factors affecting the younger people's participation. The study attempts to explain the underlying reason(s) for each determinant of the LFPR based on the regression results. Finally, a brief comparison for the LFPR among Singapore, Malaysia, United States and Japan reveals that in the case of Singapore there is still has room for improvement.