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How efficient is the Australian labour market? Analysing job matching efficiency for regions, occupations and industries

Author

Listed:
  • Peter Lake

    (Jobs and Skills Australia)

  • Samuel Shamiri

    (Jobs and Skills Australia)

  • Kishor Sharma

    (Jobs and Skills Australia)

  • Adam Bialowas

    (Jobs and Skills Australia)

Abstract

In an efficient labour market, employers fill vacancies in a timely manner, and those who are unemployed do not remain out of work for long. However, this is not always the case. During an economic downturn, workers who are laid off may possess different skills to those required in sectors that remain strong. As a result, the unemployed may remain unemployed for longer, because they are unable to find work. In addition, the remaining vacancies may go unfilled, as suitable workers cannot be obtained from the unemployment pool. In such circumstances, poor labour market efficiency is at play, and the economic and social costs can be substantial. Consequently, Jobs and Skills Australia (JSA) has been researching this topic by examining the question ‘for a given level of vacancies (demand) and unemployment (supply), how many hires should be occurring in the labour market?’. Using data from both JSA and the Australian Bureau of Statistics (ABS), experimental insights into labour market efficiency for regions and occupations have been derived, paving the way for further research that may provide opportunities to inform economic and labour market policies. Our results tend to suggest that efficiency of the labour market in matching unemployed persons with jobs is currently relatively high and has broadly improved in recent years.

Suggested Citation

  • Peter Lake & Samuel Shamiri & Kishor Sharma & Adam Bialowas, 2024. "How efficient is the Australian labour market? Analysing job matching efficiency for regions, occupations and industries," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 27(1), pages 101-117.
    • Handle: RePEc:ozl:journl:v:27:y:2024:i:1:p:101-117
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    References listed on IDEAS

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    3. René Fahr & Uwe Sunde, 2004. "Occupational job creation: patterns and implications," Oxford Economic Papers, Oxford University Press, vol. 56(3), pages 407-435, July.
    4. Warren, Ronald S, Jr, 1991. "The Estimation of Frictional Unemployment: A Stochastic Frontier Approach," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 373-377, May.
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    More about this item

    Keywords

    Labour supply; labour demand; occupational market; public policy;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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