An Examination of Net Flows in the Australian Labour Market

Robert Dixon, John Freebairn and Guay Lim

Australian Journal of Labour Economics (AJLE), 2005, vol. 8, issue 1, 25-42

Abstract: In this paper we investigate the behaviour of net flows of persons between employment, unemployment and not in the labour force in Australia between 1979-2003 and the relationship of these flows to changes in the unemployment rate over that period. We find that: flows from unemployment to employment exceed flows from employment to unemployment and that this is the case even in recessions; flows from employment to not in the labour force exceed flows from not in the labour force to employment and that this is the case even in booms, and; flows from not in the labour force to unemployment exceed flows from unemployment to not in the labour force and that this is the case even in recessions. Another important finding is that the reason why the participation rate is negatively correlated with the unemployment rate is because net flows between employment and not in the labour force and net flows between employment and unemployment are highly and positively correlated. This suggests that the so-called ‘discouraged-unemployed-worker’ effect is not a credible explanation for the endogeneity of the participation rate.

Keywords: Mobility, Unemployment, and Vacancies; Unemployment; Models, Duration, Incidence, and Job Search; Business Fluctuations; Cycles (search for similar items in EconPapers)
JEL-codes: E32 J60 J64 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://ftprepec.drivehq.com/ozl/journl/downloads/AJLE081dixon.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ozl:journl:v:8:y:2005:i:1:p:25-42

Access Statistics for this article

More articles in Australian Journal of Labour Economics (AJLE) from Bankwest Curtin Economics Centre (BCEC), Curtin Business School Contact information at EDIRC.
Bibliographic data for series maintained by Sandie Rawnsley ().