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Australian labor market dynamics across the ages

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  • Ponomareva, Natalia
  • Sheen, Jeffrey
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    Abstract

    Transition probabilities between four labor market states (full-time employment, part-time employment, unemployment and inactive) for three age groups (the young, mature and old) are calculated using monthly gross flow data for Australia from October 1997 to May 2012. We determine the responses of the different groups to phases of the business cycle by estimating four unobserved common dynamic factors that drive the age group transitions. Job-finding and job-losing factors were significantly affected by the business cycle variable. Impulse responses to a business cycle shock show that both job-finding and job-losing matter, with the former more important. Part-time job flow responses are more important cyclically than full-time ones. In business cycle downturns, the young have a disproportionate difficulty finding and keeping all jobs, the mature unemployed have more difficulty finding full-time work, and the old have difficulty keeping full-time work.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 35 (2013)
    Issue (Month): C ()
    Pages: 453-463

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    Handle: RePEc:eee:ecmode:v:35:y:2013:i:c:p:453-463

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    Web page: http://www.elsevier.com/locate/inca/30411

    Related research

    Keywords: Labor market flows; Age groups; Unemployment; Transition probabilities; Business cycles; Dynamic factor model; Impulse responses;

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    References

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    1. Chew Lian Chua & Robert Dixon & G. C. Lim, 2007. "What Drives Worker Flows?," Melbourne Institute Working Paper Series wp2007n34, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
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