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The relationship between unemployment and vacancies in Australia

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  • Anthony De Francesco

Abstract

The paper addresses the existence of an equilibrium unemployment-vacancies (UV) relationship in Australia. Cointegration test results suggest that no bivariate long-run (UV) relationship exists. Moreover, this finding fails to support the basic model of labour job search. However, a modified Beveridge Curve is proposed where it is found that a number of trivariate equilibrium relationships exist between unemployment, vacancies and one other variable; the replacement ratio, the proportion of long-term unemployed or the real wage. The existence of an equilibrium relationship in the multivariate framework is due to the endogenous modelling of the (un)employment flows which are assumed to be exogenous in the bivariate framework of the Beveridge Curve.

Suggested Citation

  • Anthony De Francesco, 1999. "The relationship between unemployment and vacancies in Australia," Applied Economics, Taylor & Francis Journals, vol. 31(5), pages 641-652.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:5:p:641-652
    DOI: 10.1080/000368499324084
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    References listed on IDEAS

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    1. Jerome Fahrer & Alexandra Heath, 1992. "The Evolution of Employment and Unemployment in Australia," RBA Research Discussion Papers rdp9215, Reserve Bank of Australia.
    2. Jerome Fahrer & Andrew Pease, 1993. "The Unemployment/Vacancy Relationship in Australia," RBA Research Discussion Papers rdp9305, Reserve Bank of Australia.
    3. Jacobson, T. & Vredin, A. & Warne, A., 1993. "Are Real Wages and Unemployment Related?," Papers 558, Stockholm - International Economic Studies.
    4. Ronald Bewley & Minxian Yang, 1998. "On The Size And Power Of System Tests For Cointegration," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 675-679, November.
    5. Jerome Fahrer & Andrew Pease, 1993. "The Unemployment‐Vacancy Relationship in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 26(4), pages 43-57, October.
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    Cited by:

    1. Ewa Gałecka-Burdziak, 2016. "Aggregate matching in Spain. Time series analysis using cointegration techniques," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(1), March.
    2. Richard Dutu & Mark J. Holmes & Brian Silverstone, 2016. "Modelling A Regime-Shifting Beveridge Curve," Bulletin of Economic Research, Wiley Blackwell, vol. 68(1), pages 90-104, January.
    3. Sell, Friedrich L. & Reinisch, David C., 2013. "How do Beveridge and Phillips curves in the euro area behave under the stress of the world economic crisis?," Working Papers in Economics 2013,1, Bundeswehr University Munich, Economic Research Group.
    4. Friedrich L. Sell, 2016. "Combining the Beveridge and the Phillips Curve into an Integrative Model: The Modified Output Gap," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 1-12, May.
    5. Razzak, Weshah, 2008. "On The dynamic of search, matching and productivity in New Zealand and Australia," MPRA Paper 8262, University Library of Munich, Germany.
    6. Brian Silverstone, 2004. "Help Wanted in New Zealand: The ANZ Bank Job Advertisement Series," Working Papers in Economics 04/03, University of Waikato.

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