Melbourne Institute of Applied Economic and Social Research - Research Publications

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    Forces shaping firms' decision to innovate: evidence from large Australian organisations
    Webster, Elizabeth ( 2003-03)
    This paper investigates the forces that lead some firms to engage in more innovative activities than others using a survey of over 200 large Australian firms. Many earlier studies on the determinants of innovation followed the Schumpeterian tradition, and focused on size and market structure as possible causes of innovativeness, however with the event of new qualitative measures of industry knowledge and managerial styles, these factors have been found to be insignificant. The results show that factors common to all industries, such as the extent of learning, knowledge spillovers, appropriability and managerial style, are more important than industry specific forces. Foreign owned companies were also found to be more innovative, other things considered
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    Conflict inflation: estimating the contributions to wage inflation in Australia during the 1990s.
    Fry, Tim R. L. ; Webster, Elizabeth ( 2003-03)
    One of the major emerging macroeconomic problems during the century has been the tendency for inflation to accelerate under prolonged periods of full employment. According to Isaac (1977) and Kaldor (1996, 5th Lecture), this arises from the process of wage determination common to most western economics. They argue that there are three major objectives of wage earners that are in competition with one another. First, the desire to maintain relativities; secondly, the desire to have a 'fair' share of companies profits; and thirdly, a reluctance to allow any encroachment on achieved standards due to unfavourable (exogenous) events. If companies have differing rates of profit then the first objective will conflict with the second. If there are adverse changes the terms of trade, then the third objective will cause inflation. This paper tests how well the three objectives of wage earners cited above in the context of their power to effect these objectives, explains wage inflation in Australia using a times series of micro wage rate rates for detailed occupations and industries for the period 1989 to 2000. We find that wages are sensitive to the three major objectives, but not occupational unemployment rates.
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    Intangible and intellectual capital: a review of the literature
    Webster, Elizabeth ( 2002-06)
    This paper reviews theoretical and empirical academic economic studies that discuss what is intangible and intellectual capital and why is it important for society. It begins by discussing issues such as the nature of this capital and how has it changed over time. Subsequently it reviews measures of the importance of intangible and intellectual capital, whether optimal levels of investment in intangible and intellectual capital can be said to exist and, accordingly, whether governments should intervene in the market. On balance, theory favours the view that for reasons associated with uncertainty, non-mortgageability and economies of scale, there is an under-investment in these types of investment. However the extent to which this holds will differ according to the prevalence of uncertainty, non-mortgageability and scale economies for each type of capital item. The most common policies to stimulate the production of intangible capital, especially intellectual capital, are government grants, especially for basic research, patents and other forms of intellectual property, subsidies and research consortia. Optimal policies adjust the incentive to produce so that the marginal costs to society are equal to the marginal benefits.
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    How segmented are skilled and unskilled labour markets: the case of beveridge curves.
    Song, Lei Lei ; Webster, Elizabeth ( 2001-11)
    This paper tests whether there is empirical evidence that two distinct Beveridge curves for the skilled and unskilled aggregate markets. The results support the dualism hypothesis and specifically find that the skilled labour segment is more efficient at matching workers with jobs and/or has lower turnover rates. Lower turnover rates may be indicative of a better prior match. It also found that other shift variables, such as the replacement rate, the incidence of long-term unemployment, the immigration rate and the market circumstances in the other segment, had differential effects on each curve
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    An estimate of the equity effects of labour market programs
    Webster, Elizabeth ; Johnson, David ( 2001-01)
    Labour market programs aim to enhance both total employment and equality of job opportunities. While the employment effects have been studied extensively in Australia and overseas, the effects on equality has scarcely received any attention. The existing literature implies that any assistance to a disadvantaged group will promote equality. However, because many programs operate by substituting one group of people for another, the effects on equity cannot be determined until some estimates are made of the type of person who has been displaced. This study attempts to present comparative information on the types of people who benefit and lose from the provision of labour market programs. It is found that expenditure on labour market programs, as they were constructed under Working Nation, favours people with more disadvantaged work histories and lower household incomes compared with an alternative of higher levels of health and education expenditure.
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    The effects of wages on aggregate employment: a brief summary of empirical studies
    Webster, E. ( 2000-09)
    This paper provides non-technical summaries of theories which posit a relationship between aggregate employment and real wages and presents results from Australian and selected overseas empirical studies. Neoclasssical supply side theories assume that real wages, for given endowments of physical capital, primarily influence the cost of employing labour, and have an inverse relationship to aggregate employment. Keynesian demand side theories maintain that real wages affect both demand for labour as well as the relative costs of employing different techniques of production. Most estimations of the wage elasticity of demand for labour assume that real output is fixed and are thus not proper elasticities of demand. Recent Australian estimates range from -0.15 to -1.0 but the equations are not long run estimates as they include either output or the capital stock as an explanatory variable.
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    The Determinants of Relative Wage Change in Australia
    Webster, Elizabeth ; TSENG, YI-PING ( 2000-12)
    This paper uses micro data from over 4000 Australian individuals to investigate which factors have had a significant influence on microeconomic wage growth over the past 3 years. The relative importance of four type of factors: outside incomes, demand for labour, workers' relative bargaining strength and category of wage contract are compared. Basic individual demographic characteristics (partial substitute variables for outside incomes), and some indicators of workers' bargaining power provided most of the explanation for wage changes. Proxy variables for labour demand, while significant and correctly signed, were small in magnitude. Information on workplace characteristics and the individual's work history were not available.
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    An estimate of the equity effects of labour market programs
    Webster, Elizabeth ; Johnson, David ( 2001-01)
    Labour market programs aim to enhance both total employment and equality of job opportunities. While the employment effects have been studied extensively in Australia and overseas, the effects on equality has scarcely received any attention. The existing literature implies that any assistance to a disadvantaged group will promote equality. However, because many programs operate by substituting one group of people for another, the effects on equity cannot be determined until some estimates are made of the type of person who has been displaced. This study attempts to present comparative information on the types of people who benefit and lose from the provision of labour market programs. It is found that expenditure on labour market programs, as they were constructed under Working Nation, favours people with more disadvantaged work histories and lower household incomes compared with an alternative of higher levels of health and education expenditure.