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Assessing the Impact of Worker Compensation Premiums on Employment in Tasmania

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Abstract

The aim of this study is to obtain estimates of the impact of worker compensation premiums on employment in Tasmania. To do so it proposes a basic reduced form employment equation as a function of wages, output, time and lagged employment using lags and Australian output figures as instruments. Using quarterly time series an estimate of the wage elasticity of employment for Tasmania over 1984.3 to 2008.1 is obtained that is comparable to other Australian employment studies. It also estimates an annual panel model across 3-digit industries together with worker compensation premium data to obtain a direct estimate of the impact of worker compensation premium on employment across Tasmania and also at a 1-digit industry level from 1992 to 2008.

Suggested Citation

  • 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.
    • Handle: RePEc:tas:wpaper:10449
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    File URL: http://eprints.utas.edu.au/10449/1/DP2010-05_Blacklow_September2009.pdf
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    References listed on IDEAS

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    1. 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.
    2. Kelly D. Edmiston, 2006. "Workers’ Compensation and State Employment Growth," Journal of Regional Science, Wiley Blackwell, vol. 46(1), pages 121-145, February.
    3. Steve Dowrick & Graeme Wells, 2004. "Modelling Aggregate Demand for Labour: A Critique of Lewis and MacDonald," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 436-440, December.
    4. 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.
    5. Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Wage Elasticity of Employment; Workers’ Compensation Premiums;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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