Economics - Research Publications

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    Common cycles in labour market separation rates for Australian states
    DIXON, ROBERT ( 2007-04)
    There is a considerable body of evidence showing that it is the inflow intounemployment that drives the unemployment rate up and down and so from a policy point ofview an important question is whether or not movements in state inflow reflect the impact ofstate-specific shocks or common shocks affecting the entire economy This paper reports theresults of using principal components analysis to search for a common cycle in time series datafor the rate at which people are leaving employment and moving to unemployment in the sixstates of Australia. It is concluded that there is a common cyclical component to each of thestate’s separation rates but that it accounts for only a small part of the total variation weobserve in the data set. In addition there are large idiosyncratic variations especially in the caseof three of the six states. These findings strengthen the case for regional labour market policyin Australia.
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    A framework for understanding changes in the unemployment rate in a flows context: an examination net flows in the Australian labour market
    DIXON, ROBERT ; Freebairn, John ; Lim, G. C. ( 2004-08)
    In this paper we develop a framework which is appropriate for the systematic investigation ofthe relationship between net (and gross) flows between different labour market states andmovements in the unemployment rate. We use that framework to investigate the behaviour ofnet flows of persons between employment, unemployment and not in the labour force inAustralia between 1979-2003 and the relationship of these flows to changes in theunemployment rate over that period. We find that: flows from unemployment to employmentexceed 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 toemployment and that this is the case even in booms, and; flows from not in the labour force tounemployment exceed flows from unemployment to not in the labour force even inrecessions. Another important finding is that the reason why the participation rate isnegatively correlated with the unemployment rate is because net flows from employment toboth unemployment and to not in the labour force are highly correlated. It cannot be explainedby flows occurring between unemployment and not in the labour force.