Cyclical Flows in Australian Labour Markets

Using a four‐state model, we show that Australian labour markets exhibited more mobility after 1980, but most gains occurred before 1993. We find large and significant procyclical effects in the transition probabilities from unemployment to jobs, which contribute significantly to the variations of u...

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Bibliographic Details
Published in:The Economic record 2010-09, Vol.86 (s1), p.35-48
Main Authors: PONOMAREVA, NATALIA, SHEEN, JEFFREY
Format: Article
Language:English
Subjects:
Australia
Business cycles
Cyclical analysis
Cyclical unemployment
E24
E32
J63
J64
Labor market
Labour demand
Labour economics
Labour force
Labour force utilization
Labour market participation
Labour market structure
Labour mobility
Labour supply
Occupational mobility
Studies
Unemployed
Unemployment
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Summary:Using a four‐state model, we show that Australian labour markets exhibited more mobility after 1980, but most gains occurred before 1993. We find large and significant procyclical effects in the transition probabilities from unemployment to jobs, which contribute significantly to the variations of unemployment. Transitions from jobs to unemployment are countercyclical, but the effects are small and in most cases insignificant. Although job‐losing and job‐finding both matter for the evolution of unemployment over the whole business cycle, job‐finding has become more important in recent years. During recessions, job‐finding is a bigger issue. Each transition probability explains only a small proportion of participation rates.
ISSN:0013-0249
1475-4932
DOI:10.1111/j.1475-4932.2010.00658.x