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Real Wages and Unemployment in Australia

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  • Pissarides, Christopher A

Abstract

This paper estimates a three-equation model of the Australian labor market, for employment, real wages, and the participation rate. It uses the model to study the role of incomes policies in containing real wage growth and the reasons behind the changes in unemployment since 1970. It finds that incomes policies have not been important in controlling real wages; the rise in unemployment in the 1970s was due to the rise in tax rates and unemployment benefits; and the changes in unemployment in the 1980s were connected with changes in investment and aggregate demand. Copyright 1991 by The London School of Economics and Political Science.

Suggested Citation

  • Pissarides, Christopher A, 1991. "Real Wages and Unemployment in Australia," Economica, London School of Economics and Political Science, vol. 58(229), pages 35-55, February.
    • Handle: RePEc:bla:econom:v:58:y:1991:i:229:p:35-55
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    Citations

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    Cited by:

    1. Peter Dawkins, 1998. "Solutions to Australian Unemployment: Three Perspectives - Solutions to Unemployment and Avoiding the 'Diabolical Trade-off': A Discussion," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    2. K.F. Wallis, 1992. "On Macroeconomic Policy and Macroeconomic Modeling," Economics Discussion / Working Papers 92-04, The University of Western Australia, Department of Economics.
    3. Marika Karanassou & Hector Sala, 2010. "Labour Market Dynamics in Australia: What Drives Unemployment?," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 185-209, June.
    4. Doucouliagos, Chris, 1997. "The Aggregate Demand for Labour in Australia: A Meta-analysis," Australian Economic Papers, Wiley Blackwell, vol. 36(69), pages 224-242, December.
    5. Ángel Melguizo & José González-Páramo, 2013. "Who bears labour taxes and social contributions? A meta-analysis approach," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(3), pages 247-271, August.
    6. Dur, Robert A. J., 2001. "Explaining unemployment trends in the Netherlands," Journal of Policy Modeling, Elsevier, vol. 23(2), pages 161-168, February.
    7. Yolanda Pena-Boquete, 2016. "Further developments in the dynamics of female labour force participation," Empirical Economics, Springer, vol. 50(2), pages 463-501, March.
    8. Bårdsen Gunnar & Hurn Stanley & McHugh Zöe, 2012. "Asymmetric Unemployment Rate Dynamics in Australia," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 16(1), pages 1-22, January.
    9. Anh T. Le & Paul W. Miller, 2000. "Australia's Unemployment Problem," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 74-104, March.
    10. Peter Dawkins & John Freebairn, 1997. "Towards Full Employment," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(4), pages 405-417.
    11. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Ana R. de Lamo & Juan J. Dolado, 1993. "Un modelo del mercado de trabajo y la restricción de oferta en la economía española," Investigaciones Economicas, Fundación SEPI, vol. 17(1), pages 87-118, January.
    13. Blacklow, Paul, 2009. "Assessing the Impact of Worker Compensation Premiums on Employment in Tasmania," Working Papers 10449, University of Tasmania, Tasmanian School of Business and Economics, revised 29 Nov 2010.
    14. Guy Debelle & James Vickery, 1998. "The Macroeconomics of Australian Unemployment," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    15. Jeff Borland & Ian McDonald, 2000. "Labour Market Models of Unemployment in Australia," Melbourne Institute Working Paper Series wp2000n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    16. John Freebairn, 1998. "Microeconomics of the Australian Labour Market," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    17. Bowitz, Einar & Cappelen, Adne, 2001. "Modeling income policies: some Norwegian experiences 1973-1993," Economic Modelling, Elsevier, vol. 18(3), pages 349-379, August.
    18. Marika Karanassou & Hector Sala, 2010. "The Wage-Productivity Gap Revisited: Is the Labour Share Neutral to Employment?," Working Papers 668, Queen Mary University of London, School of Economics and Finance.

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