Search

The article presents information on infrastructure spending and unemployment in Australia. The Australian government's policy package had several components. The first was a recognition that high economic growth was required if significant inroads into unemployment were to be achieved. Given the government's beliefs about the likely outcomes for labour productivity and the labour force participation rate, it was thought that a real growth rate of 4.8 per cent would be required to achieve the target unemployment rate of 5 per cent by 2001. The Green Paper and the subsequent White Paper were pretty vague as to exactly how such a long stretch of high economic growth was to be achieved, placing a lot of faith on microeconomic reform and improving the quality of labour through training reform. However, it was also recognised that high growth by itself was not sufficient, and that a policy of active labour market programs directed at the long-term unemployed and those at high risk' of becoming long-term unemployed would be necessary to reduce long-term unemployment. The Job Compact was an extensive raft of active labour market programs which included an expanded wage subsidy scheme, training programs and case management of the chronically unemployed and which placed an obligation on targeted individuals to participate in the scheme to retain unemployment benefits.

In this paper, we investigate the behaviour of the Australian slate labour markets, focusing on the rote of geographic labour mobility. We find that interstate migration does play an important role in reducing differences in labour market conditions between states, although permanent (or very persistent) differences between state unemployment rates remain. We also find that out-migration from a state resulting front a relative downturn in its labour market occurs slowly and steadily. Most of the migration takes place, on average, within four years, and the process of adjustment is complete tier seven years. [ABSTRACT FROM AUTHOR]

The article comments on the article "The Path to Full Employment," by William F. Mitchell and Martin J. Watts. In their paper, Mitchell and Watts (referred to from here on as MW) claim that the proximate' cause of high unemployment in most economies has been a persistent deficiency of aggregate demand', which in turn has been the result of the application of excessively restrictive fiscal and monetary policy over the last two decades. While the paper ranges over a number of related issues and themes, in the short space allocated to this commentary, the author concentrates on the merits and drawbacks of their Buffer Stock Employer (BSE) scheme, which MW claim will solve the unemployment problem without creating significant inflationary pressures. The first point that can be made is that the BSE model is nothing new indeed it is nothing more than a public sector job creation program, similar in purpose to the Regional Employment Development Scheme of the 1970s, the Community Employment Program of the 1980s, and the New Work Opportunities component of the Job Compact. The main difference is that the scheme is to be a permanent feature of labour market assistance rather than a temporary measure.

The article presents information on unemployment in Australia, its prospects and policies. Everyone knows that it has proved a difficult problem to solve. The problem of mass unemployment in Australia arguably has now persisted for a longer period than during the Great Depression, yet it appear to have made little progress in solving the problem. The contributions to this Australian Economic Review Policy Forum are intended to stimulate debate on appropriate solutions to the problem of unemployment in Australia. To set the scene for the discussion of policy proposals this paper reviews some of the main features of unemployment in Australia today. Section 2 describes the evolution and distribution of unemployment in Australia. Section 3 considers prospects for unemployment over the medium term in Australia. This analysis suggests that in the absence of policy reform unemployment is likely to remain at an unacceptably high level over the next three to five years. Section 4 presents a general framework for classifying types of policies for unemployment and for evaluating those policies, and provides a brief overview of the articles in this Policy Forum. Australia's prolonged experience with high rates of unemployment has meant that long-term unemployment has become an important issue of concern for policy-makers. In May 1997 about 240 000 persons had been unemployed for over a year. This represented thirty per cent of the total group of unemployed persons.

The relationship between the social welfare system and employment incentives has received considerable attention in the literature, This paper uses data from the National Aboriginal and Torres Strait Islander Survey to consider these issues for indigenous Australians. Two measures are calculated: the replacement ratio which measures the expected gains from employment tor those not in work: and the cost of job loss which measures the expected costs of becoming unemployed for those in employment. The estimates presented here show that the replacement ratio is higher for females than males and for those in a married or de facto relationship compared with single people. About 5 per cent of single males and females could expect a higher income from social security than from non-Community Development Employment Projects (CDEP) scheme employment. Among those with dependent partners 24 per cent of males and 40 per cent of females looking for work could expect a higher income rem social security than from non-CDEP employment. The estimates of the cost ot job loss, which include the effects of the duration of unemployment and the replacement ratio, show a high cost for some indigenous Australians because of their expected longer duration of unemployment. [ABSTRACT FROM AUTHOR]

The article focuses on the ABS survey of employment and unemployment patterns in Australia. Most collections of labor market data in Australia are cross-sectional in nature. They provide a snapshot of the labor market at one point in time. These cross-sectional data sets usually contain quite detailed data on which individuals are employed at a given instance in time, which individuals are unemployed and which individuals are not participating in the labor market. The availability in the survey of a wide range of demographic, educational and labor market information on the respondents has facilitated much labor market research. As there have been relatively few studies of the Australian labor market based on longitudinal data, the research projects now under way have the potential to make major contributions to many policy issues. If this potential is realized, then the way in which longitudinal data can enhance our understanding of labor market processes will have been demonstrated.

The article comments on the article "Infrastructure Spending and Unemployment: Government Responsibility for Growth and Jobs," by Peter Kenyon. The current rate of unemployment in Australia is excessively high. The Australian population would benefit greatly from government economic policies that reduce the rate of unemployment. Peter Kenyon argues in his paper for an increase in publicly funded infrastructure projects. Such a policy would be, in his view, the quickest and surest policy to deal with unemployment. In arguing for this policy, Kenyon observes that studies have shown that public sector infrastructure creates positive externalities for the private sector. Furthermore, Kenyon argues that, in Australia, productive infrastructure projects are there for the investing. This he infers from his view that the decline in Australia in public investment from 8 per cent of GDP in the 1960s to about 4.5 per cent of GDP now was caused by `the short-term policy of government budget deficit reduction' and not by fewer projects passing the test of cost-benefit analysis. Kenyon points out that this decline in public investment has not been accompanied by an offsetting increase in private sector investment. These arguments suggest that an increase in public investment would be productive.

The downturn in Australia's labour market from 2008–2018 was reflected in dimensions other than unemployment. We use the Household Income and Labour Dynamics in Australia data set to explore one key dimension—occupational choice. Using an occupational ranking (AUSEI06) based on earning potential and education level, we show young graduates (aged 20–35) found work in lower‐scored occupations after 2010. We examine potential heterogeneity of the occupational outcomes using Markov transitions between quartiles of the occupational distribution. We find the likelihood of transitioning to better quartiles worsened over the 2001–2018 period, suggesting poor initial outcomes can have long‐term effects on one's occupation. [ABSTRACT FROM AUTHOR]

The article focuses on state and territory employment and unemployment patterns in Australia. It mentions that recognizing the national indicators of macroeconomic performance might conceal the differences in local level which can cause regional economic disparities. Furthermore, it also discusses the available researches which are related to the behaviour of unemployment such as convergence of labour market indicators and the trends and cycles of unemployment.

The article discusses unemployment in Australia and uses the Phillips curve and the Beveridge curve to analyze Australian full employment. Details about the conditions in the labor market in Australia are provided. The relationship between inflation and unemployment rates in Australia is explored. The non-accelerating inflation rate of unemployment (NAIRU) and the natural unemployment rate are examined using the two curves. The effects of trade on Australian state labor markets and the relationship between state and national unemployment rates are also discussed.

In this paper, the author commends Australia's employment services for the unemployed; however, he asserts that such efforts are not enough to reduce unemployment to levels observed in the 2001 Organization for Economic Cooperation and Development (OECD) report. He contends that both Australian and American efforts toward privatizing employment services for the unemployed have had uncertain results in improving the quality of these services, and improved knowledge of program effectiveness is needed because even the most effective policies can have only a modest impact in reducing unemployment. He observes that by itself, active labor market policy may have little effect on reducing structural unemployment, but when such policy is closely integrated with income support policy, it can significantly change worker incentives to find and keep a job.

A matching function approach is used to investigate the macroeconomic effects of labor market program (LMP) commencements on unemployment outflows in Australia using unpublished data that classify commencements and outflows by duration of unemployment The results indicate that LMPs have had significant effects on outflows from long-term unemployment However, the net impact of programs on these outflows suggests that the substitution and displacement effects associated with programs are high. These results are consistent with recent microeconomic research into the effects of LMP participation on individual transitions out of unemployment [ABSTRACT FROM AUTHOR]

The setting of monetary policy in Australia is guided by the inflation target-which is to keep the rate of inflation in the range of 2 to 3 per cent in the medium term. This article considers whether monetary policy can induce a permanent decrease in the rate of unemployment without violating the inflation target. The existence of customer markets will induce firms to allow their profit margins to fall and this will reduce the required fall in the real reference wage. Monetary policy should be exploratory in attempting "to find the bottom of the range of safe unemployment rates." The adoption of an explicit inflation target as an objective of monetary policy can enable monetary policy to yield better outcomes on unemployment. This is because the inflation target helps to anchor the expected rate of inflation. For wage and price setters the inflation target is a guide to the future rate of inflation. An exploratory policy may on average, over a sweep of years, cause the actual rate of inflation to exceed the expected rate of inflation. The price of low unemployment is eternal vigilance.

The inflationary surge of the 1970s and 1980s and the rising power of global financial interests have been two important factors in explaining a key shift in macroeconomic policy in western economies in the last two decades. In Australia, from the early 1990s, the Reserve Bank has guided short- to medium-term monetary policy by explicitly targeting an inflation rate of 2-3 per cent. The orthodox case against inflation is that it distorts the price mechanism and leads to uncertainty about future prices which in turn distorts investment decisions and leads to an inefficient allocation of resources within the economy. Unemployment rises at low rates of inflation. This is a permanent cost to pursuing low inflation. The employment losses are permanent because the churning of the economy always produces some firms that need to cut relative wages to preserve employment. Dissatisfaction with the pursuit of very low inflation in Australia has mainly emerged by way of sporadic complaints about deflationary policy by industry.

Provides an overview of the economy of Australia as of December 1996. National accounts; Progress of actual unemployment against the proposals of the 1993 Green Paper taskforce; Prices and earnings; National debt and productivity; International trade; Australian dollar movements.

While economic growth over the past year has increased and inflation rates have remained low, Australia still has an unemployment rate of 9.5 per cent (July 1994). As the recent White Paper on employment (Working Nation 1994) and the 1994-95 Budget Statements (1994) have emphasised, the key task for the federal government over the rest of this decade is to develop policies to sustain economic growth at rates which are sufficient to reduce the rate of unemployment. Hence, the focus of this article is a discussion of policy for sustaining economic growth for the rest of the decade in Australia. The next section will briefly outline current economic conditions in Australia. Following there is a review of the nature of sustainable economic growth; this includes an explanation as to why sustainable economic growth is required and a discussion of the recently announced policies for achieving sustainable economic growth. With respect to policies the discussion will concentrate upon the federal government's employment policy statements and the 1994-95 federal Budget. There is also a brief discussion of New Growth Theory and the Asian growth experience. [ABSTRACT FROM AUTHOR]

The article comments on Will Foster's paper titled "Gross Flows in the Australian Labor Market," published in the April 1981 issue of the journal "Australian Economic Review." In his paper, Foster discusses two extreme views of the labor market. He says that the labor market could be viewed essentially as a medium for transferring the employed from one job to the next or into unemployment, and for transferring the unemployed sooner or later back into employment. This hypothesis could be called hypothesis 1. Hypothesis 2 is stated that the labor market could be seen more as a means of moving people into the labor force to either employment or unemployment, in which state they would tend to remain until leaving the labor force again. Foster sensibly points out that in practice the Australian labor market probably operates at an intermediate position between these two extremes. He goes on to suggest that the recently available gross flows data can be used to address the issue of the relative importance of flows within and across labor force boundaries.

The article discusses trends, updates, and outlook for the Australian economy. Topics explored include the gross domestic product (GDP), consumption, and unemployment rates recorded from 2017 to 2018, international economic developments in the U.S., Europe, and China which could impact Australia, and the contribution of non-mining business investments to Australian economic growth.

The article discusses the Australian economic condition in 2016 and the impact of international economic events on the country's economy. Several countries influenced Australian economy which include the U.S., European countries such as Germany, Great Britain and France, and Japan. The trends noted in the country include growth in net exports, growth in the housing market, and an improvement in the unemployment rate.

The article discusses the uncertainties and challenges of the economic condition of Australia in 2015-2016. It outlines the important economic trends in 2014-2015 that are remnants of the 2013-2014 including the sluggish growth of the domestic final demand. Also emphasized are impact of China's economy on the uncertain macroeconomic outlook and the anticipation that subdued wage growth, increased unemployment rate and weak growth on domestic demand will likely to persist.

This article reviews Australia's unemployment experience since the Global Financial Crisis. First, developments in the rate of unemployment since the Global Financial Crisis are described. Second, the main drivers of the increase in the rate of unemployment that has occurred are established. Third, some aspects of recent experience that have received substantial attention-such as increasing youth unemployment and growing regional dispersion in unemployment rates-are considered. Studying the history of the Australian labour market reveals that these features always accompany cyclical downturns. Fourth, policy options for dealing with unemployment are evaluated. [ABSTRACT FROM AUTHOR]

I discuss selected research contributions of the Melbourne Institute of Applied Economic and Social Research to 50 years of welfare policy for those of workforce age and focus particularly on the policy focus of R. F. Henderson, the inaugural director. Following the spirit of his 1960s poverty research, in the mid-1970s, government doubled unemployment allowances in real terms and increased pensions by approximately 40 per cent. Both income support payments were to be indexed by average wage increases. At the time, unemployment was typically around 1 per cent and the pension take-up for those of workforce age was also limited. Today, income support take-up rates have probably increased fivefold. In response, government has adopted a 'make work pay' policy over the last two decades and indexed allowances for Consumer Price Index increases and allowances have fallen by 25-35 per cent, relative to community living standards. Pensions continue to be indexed by average wage changes. I address a range of questions arising from this experience, including: Why has government abandoned the Henderson recommendations?; Is there any evidence that a 'make work pay' policy is working? [ABSTRACT FROM AUTHOR]

This article examines the extent to which the Mortensen–Pissarides model of labour market search can quantitatively match business cycle fluctuations in Australia. With productivity and job-separation-rate shocks, the model fails to produce substantial volatility among unemployment or vacancies, a result similar to Shimer's (2005) findings for the United States. Examining a broader range of shocks significantly increases the magnitude of business cycle fluctuations, but still only explains roughly 25 per cent of labour market volatility. The implied volatility of wages in the model is similar to that in the data and hence excessive wage flexibility is unlikely to be central to the failure of the model as claimed in the literature. [ABSTRACT FROM AUTHOR]

The article discusses the impact of the current economic slowdown on the Australian labour market. It mentions the possibility of an increase in unemployment due to global economic downturn and reports the situation of the country's labour market in the past three recessions. It gives an overview of the recessionary phases faced by the labour market since 1970 and discusses the changes that occurred in the unemployment rate during those phases. It mentions the association between the changes in unemployment and the gender distinction in labour force, and gives the industry-specific description of recession's effects on employment. It also discusses the impact of recession on long-term employment, patterns of job searching, and young and old employees.

The article discusses inflation targeting, defined as an effort by a central bank to restrain inflation within a certain range of values, while informing the public of its intentions. This type of monetary policy is said to be practiced by many industrialized countries and emerging markets. Some different varieties of these inflation targeting policies are described. The relationship between inflation and unemployment is analyzed, and some of the distinctive features which are involved in applying such a policy to the Australian economy are discussed.

Using administrative records on Australian income support (welfare) recipients over the period July 1995 to June 2002, we examine dynamic properties of income support receipt and the personal characteristics associated with alternative patterns of receipt. We draw on three concepts: churning–the process of ending a spell on income support and subsequently commencing a new spell; transferring–moving from one payment type to another within a spell on income support; and Total Time On payments (TTO)–the proportion of time on income support in a given period. We find that churning and transferring are significant features of income support receipt in Australia. For example, over half of recipients churn within five years of commencing an income support spell, and one-fifth make a payment transfer within the same time frame. Examination of the characteristics associated with each of five distinct patterns of receipt reveals substantial differences in patterns by age, family composition, unemployment status, health status, and recent history of income support receipt. [ABSTRACT FROM AUTHOR]

We use Centrelink payment records on Disability Support Pension (DSP) recipients over the period 1995 to 2002 to investigate individual transitions off payments. Our findings are consistent with the existence of a close correspondence between disability benefit receipt and labour market outcomes: entry to DSP via unemployment benefits is associated with substantially reduced prospects of exiting DSP, while employment during the DSP spell is associated with not only an increased probability of exiting DSP, but also more success in staying off payments once an exit has been made. A further finding of our analysis is that persons who exit DSP due to take-up of employment have a relatively high rate of return to payments compared with persons who exit for other reasons, and indeed exhibit a high propensity to cycle off and on payments. [ABSTRACT FROM AUTHOR]

Individual-based and household-based aggregate measures of joblessness increasingly offer conflicting signals about recent labour market performance. The article shows that while individual-based measures of joblessness fell after the highs in the early 1980s and have remained fairly stable over the last 10 years or so, household measures of joblessness have risen. Hence, the shrinking pool of joblessness among the working age population affected a larger proportion of households. While Australia is not out of line with other countries in experiencing more jobless households for given employment levels, what is striking is how many children now are living in households with no earned income. The vast majority of jobless households have low income with around 70 percent in the poorest income quintile. This is also true for jobless families with children, whether lone parents or as part of couples. This shift towards more jobless households reflects in part changes in household composition with a move towards lone-parent households and parents living alone. The fact that there are more jobless households of all types, except couples without children, while employment levels were rising, suggests that there is also a broader labour market problem. [ABSTRACT FROM AUTHOR]

In recent years the provision of vocational education and training has been recognised as having a vital role to play in improving Australia's economic performance and in alleviating the hardship of the long term unemployed. The importance of education and training gives rise to the issue of operating educational institutions with a high level of efficiency. In this article, Data Envelopment Analysis is used to derive estimates of the technical and scale efficiency of Victorian Technical and Further Education Institutes in 1995. The results reveal substantial dispersion in technical and scale efficiencies. Regression analysis is used to identify variables which are associated with technical inefficiency. [ABSTRACT FROM AUTHOR]

In this article, the author comments on the Organization for Economic Cooperation and Development (OECD) review of Australia's labor market policies and in particular on the OECD assessment of Job Network. He believes the review is significant because it presents an outside perspective, and aids government in focusing on key issues. Four of these issues are: the referring of all long-term unemployment beneficiaries to the Intensive Assistance (IA) program; whether the fee structure for IA could be improved; whether Job Network requires an independent regulator; and the issue of benefit sanctions.

This study uses longitudinal data from the Survey of Employment and Unemployment Patterns (1994-1997) to examine whether casual work can shorten the time taken to move from unemployment into permanent work. The analysis compares the transition rate from unemployment to permanent work with the combined transition rates of unemployment to casual work and casual work to permanent work. The hazard rate model controls for individual observed characteristics and unobserved heterogeneity, while allowing for correlation between the transition rates to counter potential selection bias. The evidence suggests that disadvantaged unemployed job seekers could benefit from accepting casual work in their search for permanent work (at least during periods of relatively strong employment growth). However, the experiences within these disadvantaged groups vary markedly. [ABSTRACT FROM AUTHOR]

This article focuses on the movements over time in the employment rate in Australia. The unemployment rate is defined as the number unemployed divided by the number in the labor force. The unemployment rate has tended to rise over the period. There are a number of very sudden and large increases in the unemployment rate: in 1975, 1982,1983, 1990 and 1991. These are years in which the economy moved into recession. Following the recessions at the start of the 1980s and 1990s there was a slow fall in the unemployment rate associated with a recovery.

In Australia' s case, the inflation improvement was greater, falling from around 8 per cent on average in the 1980s to close to 2 per cent for the 1990s. Having successfully reduced inflation, central bankers are apparently all monetarists now, in as much as inflation targeting has become the main goal of monetary policy. The article proposes that the conduct of monetary policy in Australia could be further improved by replacing the current inflation target range of 2-3 per cent with a point target of say 2.5 per cent. It also suggests that the appropriate way of reducing Australia's unacceptably high unemployment rate may be through a policy of unemployment targeting implemented via measures that directly affect conditions in the labour market itself. The extent of the arbitrary income transfers from borrowers to lenders in Australia can be very roughly estimated using the economy's financial accounts, a subset of the national accounts. The financial accounts record the value of outstanding financial credit in the Australian economy in terms of loans, short-term debt securities, long-term debt securities and deposit liabilities at financial institutions. Wage-setting principles could be reoriented explicitly toward meeting the prescribed unemployment target.