Unemployment In Australia Research Articles

The New Politics of Inflation and Economic Disruption: Unlearned Lessons from the 1980s and 1990s in Australia

In the 1980s, debate over inflation and unemployment in Australia promised to lead to new institutional priorities based on revised, corporatist principles. However, labour's functional capacity to influence policy, particularly anti‐inflation policy, evaporated during the neoliberal era. Recently, new contradictions in the economy have emerged (as well as a new mode of accumulation, with altered production demands and political pressures), exposing lessons that remain unlearned from the prior stagflation years and permanent problems and incapacities for the contemporary polity.

Creating relationship‐based practice in youth employment services—Converting policy intentions to practical program design

AbstractRelationship‐based practice refers to approaches within human services which centralise inter‐personal relationships—either those between clients and workers or between clients and their own network—as a way to achieve positive service outcomes. Relationship‐based practice is increasingly recognised as a critical component in many areas of human services, particularly youth services. Despite increasing policy intentions for programs to adopt a relationship‐based approach, it is not always clear how services can implement this in practice. While relationship‐based skill training can be offered to individual workers, a question remains as to what can be done at an organisational and policy level to cultivate relationship‐based practice. Within this context, this paper explores how programs can be designed to foster relationship‐based practice. The paper draws on the evaluation of an intensive and tailored service for addressing long‐term youth unemployment in Australia: the your job your way pilot program run by yourtown. A key success of the program was strong relationship‐based practice, and this paper explores five features of the program's design that enabled this: (1) small caseloads, (2) intensive support, (3) staff with complementary skills and a professional and ‘youth friendly’ demeanour, (4) staff discretion about some aspects of program implementation, and (5) support delivered through social and group activities. The paper draws implications for how service provider organisations and governments can cultivate relationship‐based practice in human services.

Responding to Negative Public Attitudes towards Immigration through Analysis and Policy: regional and unemployment dimensions

ABSTRACTThis paper examines two key dimensions of the impact of immigration for Australia and related policy aspects. One is sub-national and the other is national. They are, first, the regional location aspects of immigration and, second, the aggregate unemployment implications of immigration. These are chosen so as to focus on two important issues that condition public attitudes towards immigration. In relation to the first, there is a common positive view that channelling migration towards regional areas assists regional development and reduces pressure on metropolitan areas. The paper reviews regional concepts embodied in Australian immigration policy and the ways in which visa arrangements have implemented policies geared towards the regional dispersal of immigrants. Using official data, it discusses the demographic impacts of these policies and, in particular, considers the extent to which immigrants to regional Australia remain there over the longer term. In relation to unemployment, a common concern is that immigrants take jobs from local workers. The paper examines—using statistical regression methodology—the relationship between immigration and national aggregate unemployment in Australia. It evaluates the net consequences of immigration for both existing residents and new arrivals together. The paper concludes that, with good policy design in each case, regional location encouragement can be effective for immigrants and that immigrants need not take more jobs than they create. The analysis demonstrates that mixed-methods approaches to important social science issues can be productive, and helpful also for policy. Evidence, such as that presented in this paper, offers a powerful basis from which to counter negative public and political discourses surrounding immigration in contemporary Australia.

Australian Dollar carry trades: Time varying probabilities and determinants

This paper investigates the nature and the determinants of the Australian dollar (AUD) carry trades using a Markov regime shifting model over the period 2 Jan 1999 to 31 Dec 2012. We find that the AUD could have been used, except for a number of short periods notably surrounding the outbreak of the GFC, as an investment currency in a carry trade regime. For daily horizon, prior to September 2008, carry trade probabilities are significantly lower in response to higher realized volatility of the USD/AUD, number of trades, the announcements of unexpected inflation and unemployment in Australia. They are significantly higher when order flows are positive (more buyer than seller initialed trades of AUD) and when RBA policy interest rate unexpectedly increase. At weekly horizon, realized skewness and net long futures position in the AUD contributed to the carry trade probabilities. On the other hand, post-September 2008 period shows a breakdown in the relationship between the carry trade probabilities and their determinants.

Australian Dollar Carry Trades: Time Varying Probabilities and Their Determinants

This paper investigates the nature and the determinants of the Australian Dollar (AUD) carry trades using a Markov regime shifting model over the period 2 Jan 1999 to 31 Dec 2012. We find that the AUD could have been used, except for a number of short periods notably surrounding the outbreak of the GFC, as an investment currency in a carry trade regime. For daily horizon, prior to September 2008, carry trade probabilities are significantly lower in response to higher realized volatility of the USD/AUD, number of trades, the announcements of unexpected inflation and unemployment in Australia. They are significantly higher when order flows are positive (more buyer than seller initialed trades of AUD) and when RBA policy interest rate unexpectedly increase. At weekly horizon, realized skewness and net long futures position in the AUD contributed to the carry trade probabilities. On the other hand, post-September 2008 period shows a breakdown in the relationship between the carry trade probabilities and their determinants.

Do Migrants Rob Jobs? New Evidence from Australia

Using a new Granger no-causality testing procedure, developed by Toda and Yamamoto (1995), this study contributes to recent debate on immigration and unemployment in Australia by investigating the causal linkage between immigration and unemployment in a six-variable vector autoregresion (VAR) model. The VAR model in the paper is built upon a general unemployment equation developed by Pope and Withers (1993), using quarterly time series data covering the 1983:3 to 1995:4 period. The question that whether immigrants rob jobs is examined by identifying the sources of unemployment through causal linkages between unemployment and other key variables such as immigration. The research finds no Granger causality between immigration and unemployment. Instead, there is evidence of Granger causality running from structural change, as measured by the Stoikov Index, to unemployment and from other key variables to unemployment.

Regional Beveridge Curves: A Latent Variable Approach

Dixon R., Lim G. C. and Freebairn J. Regional Beveridge curves: a latent variable approach, Regional Studies. This paper applies an unobserved components model to a panel of Australian data to identify the direction and timing of the shifts in regional Beveridge curves. The approach identifies a common factor while allowing for region-specific effects. The common factor that drives the relationship between regional unemployment and vacancy rates is extracted and it is then related to various explanatory variables. The contribution of common shocks to fluctuations in regional unemployment ranges from 18% to 68%. The paper demonstrates the usefulness of a latent variable approach and, in relation to policy, the findings suggest the need for an explicit regional policy to tackle unemployment in Australia.

Does ‘Work for the Dole’ work?: an Australian perspective on work experience programmes

This study examines the effect of Work for the Dole (WfD), a community-based work experience programme, on transitions out of unemployment in Australia. To evaluate the WfD programme, a quasi-experimental exact matching approach is applied. Participation in the WfD programme is found to be associated with a large and significant adverse effect on the likelihood of exiting unemployment payments. The main potential explanation is the existence of a ‘lock-in’ effect whereby programme participants reduce job search activity.

Networks and geography: Modelling community network structures as the outcome of both spatial and network processes

This paper focuses on how to extend the exponential random graph models to take into account the geographical embeddedness of individuals in modelling social networks. We develop a hierarchical set of nested models for spatially embedded social networks, in which, following Butts (2002), an interaction function between tie probability and Euclidean distance between nodes is introduced. The models are illustrated by an empirical example from a study of the role of social networks in understanding spatial clustering in unemployment in Australia. The analysis suggests that a spatial effect cannot solely explain the emergence of organised network structure and it is necessary to include both spatial and endogenous network effects in the model.

Vacancies and Unemployment in Australia

Abstract 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.

People, Space and Place: a Multidimensional Analysis of Unemployment in Metropolitan Labour Markets

AbstractIt is becoming increasingly apparent that, in order to understand a range of socio‐economic outcomes, research needs to be focused on a multi‐dimensional approach that accounts for individual characteristics and behaviours together with locality and activity within space and place. Within labour market analysis there is a need to situate empirical analysis within a conceptual framework that considers both the assets of individuals within the labour force and the social and local labour market contexts in which they find themselves. Using a broad notion of employability, this paper develops an analysis of unemployment in Australia's metropolitan labour markets. Specifically it uses a combination of individual survey data and aggregate labour market data to consider the associations between these multi‐level factors. It finds that, while individual characteristics are important in understanding unemployment in metropolitan areas, it is equally the case that the strength of spatially distinct labour markets also plays a role. The paper reaches the conclusion that, while contemporary labour market policy tends to focus on individual characteristics, there is a need to widen the policy understanding of labour market outcomes so that other broader contexts, including the impact of space and place, are also seen as being influential.

Immigration, economic growth and unemployment in Australia, 1972-2007

In spite of the fact that their ageing populations, low birth rates, and resentment to take low paid jobs make developed countries more and more reliant on guest workers and migrants, many people in the rich world are still unconvinced about the necessity and long-term benefits of immigration, partly because these benefits are difficult to measure and do not necessarily apply to everybody. In fact, the popular belief is that immigration fuels unemployment and slows down economic growth in per capita terms. The link between immigration, economic growth and unemployment is multifaceted and this paper focuses only on a slim slice of it. Namely, it aims at testing for Granger causality between immigration, economic growth and unemployment in Australia from 1972 to 2007 in a vector autoregression framework. Although this sample period is reasonable long compared to similar studies, it is relatively short by historical scale. Yet, its advantage is that apart from the first year it coincides with the current period of post 'White Australia' immigration policy.

Working at Sunshine: A Case Study of the Recruitment, Retention and Management of Labour in a Melbourne Manufacturing Enterprise, 1946-63

In the 1950s unemployment in Australia fell to record low levels. Official records record the low levels of unemployment but tell little about the way workers and employers reacted to this new environment. The personnel records of Massey-Ferguson at Sunshine are a window into the world of manufacturing work in the 1950s. Through a sample drawn from individual employee records we explore how workers at a major manufacturing firm reacted to a full-employment labour market. Through these records we explore such questions as labour turnover, the development of internal labour markets, the recruitment of migrant workers and the extent of over award payments. We also explore how the company attempted to cope with a highly mobile labour force.

The Effectiveness of Incomes Policies, in Australia Bargaining and Inflation Targetting Enterprise

This paper updates earlier estimates that show the existence of a range of equilibrium rates of unemployment in Australia. Within the range of equilibria framework, the paper goes on to test the effectiveness of incomes policies, enterprise bargaining and inflation‐target based monetary policy for influencing the rate of inflation in Australia in the period 1965 to 2001. Incomes policies, especially the Accord, and enterprise bargaining are shown to have caused permanent reductions in the rate of inflation. The inflation‐target based monetary policy is shown to be associated with, but is not shown to have caused, a reduced impact on inflation of changes in the level of activity.

From Controlling to Constructive: Youth Unemployment Policy in Australia and The Netherlands

Youth unemployment is an issue that has increasingly troubled western countries since the 1970s. This paper provides data on youth unemployment in Australia and the Netherlands, and discusses government policy in both countries. The rate of youth unemployment was similar in both countries in the mid 1980s, but since then it has declined dramatically in the Netherlands, while changing little in Australia. Youth unemployment policy in Australia has been driven by the concept of obligation, while in the Netherlands youth unemployment policy has been organised around the principle of a guarantee for youth. The Dutch labour market programme offers more continuity and coherence than the rather ad hoc Australian programmes. However, the paper argues that youth labour market policy in both countries is of a controlling nature, and does not serve marginalised youth. Moreover, policy in neither country meets OECD criteria for effective labour market programs. The paper concludes with the description of a Dutch program which, to a large extent, does meet the OECD criteria, and demonstrates that a more constructive approach to youth unemployment is possible.

The Causes of Unemployment in Interwar Australia

This paper examines the factors contributing to unemployment in Australia during the Great Depression of the 1930s. Previous writers have emphasised the role of demand–side variables but it has also been argued that excessive real wages caused unemployment. The Layard–Nickell model, developed originally for the postwar British economy, is applied to Australian data. The empirical results confirm that demand shocks in the form of changes in government spending and in the terms of trade were important in both downturn and recovery. Wage indexation resulted in some rigidity of real wages but this was not a major cause of unemployment.

Equilibrium unemployment: Theory and measurement in Australia using the Phillips curve

This paper reviews the measurement of equilibrium unemployment in Australia using the Phillips curve. To provide a theoretical framework through which these measurement exercises can be understood, the theory of equilibrium unemployment based on wage bargaining is also described and reviewed. The paper shows how studies have moved from specifying a unique and constant equilibrium rate of unemployment to specifications which emphasise the influence of unemployment benefits, hysteresis and a range of equilibrium rates of unemployment.

The Relationship Between Regional and National Unemployment

An important issue in the analysis of regional unemployment is whether movements in regional unemployment rates reflect the impact of region-specific shocks or shocks affecting the entire economy. Previous studies have examined this problem by considering how the regional rates move in relation to the national unemployment rate. However, it has to be remembered that the national rate is merely a weighted average of the regional rates. In this paper we show that misleading correlation or regression results are likely to be generated by such models and that the problem can best be avoided by utilizing available information about the interactions between the regional unemployment rates directly rather than their relationship to the national rate. The theoretical arguments are illustrated with simulation experiments and as a practical example we consider the relationship between regional and national unemployment in Australia. Une question-clé quant à l'analyse du chômage régional c'est de savoir si, oui ou non, la variation du taux de chômage régional reflète l'impact des chocs spécifiques à une région ou bien des chocs qui touchent une économie dans son ensemble. Des études antérieures ont examinéce problème en considérant comment les taux de chômage régionaux varient par rapport au taux de chômage national. Il est à noter que le taux national ne constitue qu'une moyenne pondérée des taux régionaux. Cet article cherche à démontrer que de tels modèles risquent d'engendrer des corrélations ou des régressions trompeuses et que l'emploi des renseignements disponibles sur l'interaction directe des taux de chômage plutôt que leur rapport au taux national permet d'éviter ce problème. Les arguments théoriques sont illustrées à partir des simulations et, à titre d'étude de cas, on considère le rapport entre le chômage régional et le chômage national en Australie. Bei der Analyse regionaler Erwerbslosigkeit erhebt sich die wichtige Frage, ob Verschiebungen der Erwerbslosigkeit auf regionaler Ebene die Auswirkung regionalspezifischer oder die die Gesamtwirtschaft betreffenden Erschütterungen widerspiegeln. Frühere Studien haben dieses Problen untersucht, indem sie Vergleiche zwischen der Verschiebung der Raten auf Regionalebene im Verhältnis zur Erwerbslosigkeit auf Landesebene anstellten. Man muß jedoch bedenken, daß die Landesrate nur einen höher bewerteten Durchschnitt der Regionalraten darstellt. Die Autoren zeigen in diesem Aufsatz, daß solche Modelle durchaus irreführende Korrelationen oder Regressionsresultate ergeben können, und daß dies Problem am ehesten vermieden wird, wenn verfügbare Daten bezüglich den Wechselwirkungen zwischen regionalen Erwerbslosigkeitsraten direkt in Anwendung gebracht werden, statt ihre Beziehung zur Landesrate einzusetzen. Die theoretischen Argumente werden mit Simulationsexperimenten illustriert, und als praktisches Beispiel führen die Autoren die Beziehung zwischen Erwerbslosigkeit auf regionaler und auf Landesebene in Australien an.

Risk and Nostalgia: The problem of education and youth unemployment in Australia--a case study

In this article I establish a coincidence between Beck's notion of risk and policies relating to education, social security and the labour market in Australia. A critical analysis is offered of the three dominant explanations for persistent unemployment and the unequal distribution of paid work since the 1970s: (1) deficits within 'the unemployed' arguments; (2) claims that high levels of joblessness were structurally necessary; and (3) accounts offering a political-economic analysis of who has the effective power of decision-making. I argue that while much of the rhetoric about the contemporary role of education talks about embracing change, what we witness involves a resistance to change. As so often happens in 'hard times', rather than looking toward the future we tend to hark back to outmoded 'solutions' for the new issues we confront. This is poignantly evident in requirements that education becomes a front line response to unemployment in a context of recent restructuring and a shift toward a 'post-industrial society'. The category of 'youth at risk of unemployment' is an attempt to force a relatively new development (ie, a restructured labour market) into an old paradigm which takes industrial culture as a 'given'. Thus we observe a 'discovery' of the 'causes' and 'indicators' of 'youth at risk' (of unemployment) without considering the possibility that a new set of theoretical, philosophical, ethical and practical paradigms are required. In the final section of the paper I suggest it is more productive to ask alternative questions to those currently posed and conclude by outlining what these questions are.

Two Structural Breaks and the Unit Root Hypothesis: New Evidence About Unemployment in Australia

Following Konya (2000a, 2000b), this paper is the third in a series analyzing unemployment in Australia in the period of 1960 to 1997 with special regard to the unit-root versus stationarity hypotheses. It provides new evidence by allowing for the possibility of two endogenous breaks in the deterministic trend function under the stationarity alternative hypothesis. The unit root null hypothesis cannot be rejected for the rate and level of unemployment, but their logarithms seem to be trend stationary with a structural break in 1981-82 and in 1990 or 1994, respectively. Apart from this second possible break, these results are very similar to the unit root test results of Konya (2000b) with only one break under the alternative hypothesis.