Arbeitspapier

Labour market dynamics in Australia: what drives unemployment?

The debate in Australia on the (constant-output) elasticity of labour demand with respect to wages has wrongly sidelined the role of capital stock as a determinant of employment (Webster, 2003). As far back as 1991, Pissarides had argued that the influence of capital stock on the performance of the labour market is crucial but not well understood, a research area which is particularly relevant for Australia. This paper attempts to fill this void by estimating a multi-equation labour market model comprising labour demand, wage setting and labour supply equations. The model is used to examine the causes of the unemployment upturn in 1973-1983 and the subsequent decline in 1993-2006. Our results show that (i) the main determinants of the unemployment rise in the 1970s and early 1980s were wage-push factors, the two oil price shocks and the increase in interest rates, and (ii) the acceleration in capital accumulation was the crucial driving force of unemployment in the 1990s and 2000s. Furthermore, although the recent boom in the terms of trade is equally important, its downward effect on unemployment was partially reversed by the resulting decrease in net foreign demand.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 3924

Klassifikation
Wirtschaft
Investment; Capital; Intangible Capital; Capacity
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Labor Force and Employment, Size, and Structure
Thema
Labour market dynamics
capital accumulation
chain reaction theory
Arbeitsmarkt
Arbeitslosigkeit
Arbeitsnachfrage
Lohnbildung
Investition
Wirtschaftliche Anpassung
Beschäftigungseffekt
Schätzung
Australien

Ereignis
Geistige Schöpfung
(wer)
Karanassou, Marika
Sala, Héctor
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2009

Handle
URN
urn:nbn:de:101:1-20090119205
Letzte Aktualisierung
20.09.2024, 08:22 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Karanassou, Marika
  • Sala, Héctor
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2009

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