Common cycles in labour market separation rates for Australian states
University of Melbourne Author/sDixon, Robert
AffiliationEconomics and Commerce: Department of Economics
CitationsDixon, Robert (2007) Common cycles in labour market separation rates for Australian states.
Access StatusOpen Access
Research paper no. 991, ISBN 0 7340 2649 8
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.
KeywordsKeywords: Unemployment Cycles Principal Components Analysis Australia. J21 - Labor Force and Employment; Size; and Structure. J64 - Unemployment: Models; Duration; Incidence; and Job Search. R23 - Regional Migration; Regional Labor Markets; Population.
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