THE RELATIONSHIPS AMONG LABOR‐FORCE PARTICIPATION, SERVICE‐SECTOR EMPLOYMENT, AND UNDEREMPLOYMENT*

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Abstract
"In this study, it is argued [that] underemployment is both affected by and affects the labor-force participation rate (LFPR) and the level of service employment. Interestingly, the analysis reveals that service employment lowers the LFPR and raises underemployment. In turn, underemployment increases the LFPR as more secondary workers are pushed into the labor market in an effort to support their households. Thus, secondary workers are not pulled into the labor market by the availability of service jobs, but are rather pushed into these jobs by the condition of underemployment that is brought on by the growing concentration of low-paying service jobs....A three-equation simultaneous equation model is developed to test our hypotheses [and] three-stage least squares...estimates of this model for the 100 largest [U.S.] metropolitan areas are presented...."