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Regional Unemployment Disparities in Australia


Author Info

  • Robert Dixon
  • David Shepherd
  • James Thomson


In this paper we examine the nature of disparities in regional (state) unemployment rates in Australia over the period 1978-99 and their relationship to the national unemployment rate. Using co-integration analysis, we find that there is a negative relationship between the two implying that, as the national unemployment rate falls, micro and/or differentiated labour market policies need to bite harder (and affect proportionately more people) if equity in unemployment across regions is to be maintained. We also find that the trade-off between dispersion and unemployment has become steeper in the period following significant deregulation of the Australian economy in the early 1980s. It would appear likely that this reflects an increase in differences in the natural rate of unemployment between the regions since that time. Cet article cherche a examiner l'essentiel des ecarts entre les taux de chomage regional en Australie (a savoir au niveau des etats) de 1978 a 1999 et son rapport au taux de chomage moyen. A partir d'une analyse cointegree, il s'avere que les deux variables ne sont pas en correlation etroite, ce qui laisse supposer qu'il va falloir des politiques en faveur de l'emploi, soit microeconomiques, soit differenciees, qui se font plus sentir (et touchent proportionnellement plus de gens) au fur et a mesure que le taux de chomage baisse pour assurer la perequation du chomage regional. Il s'avere aussi un compromis plus fort entre la dispersion et le chomage au cours des annees qui suivent l'importante dereglementation de l'economie australienne dans les annees 1980. Il est probable que les ecarts entre les taux de chomage regional naturel se creusent acette epoque. Der vorliegende Aufsatz untersucht die Natur der Disparitaten der Erwerbslosigkeitsraten der einzelnen Staaten Australiens im Zeitraum 1978-1999 sowie deren Beziehung zur Erwerbslosigkeit Gesamtaustraliens. Mit Hilfe der Ko-integrationsanalyse wird festgestellt, dass die Beziehung zwischen den beiden negativ ist. Dies deutet darauf hin, dass bei Abnahme der gesamtstaatlichen Erwerbslosenrate mikro-und/oder unterschiedliche Arbeitsmarkttaktiken verscharft werden (und verhaltnismassig mehr Personen betreffen) mussen, wenn in den Regionen allgemeine Fairness in Erwerbslosigkeit erhalten bleiben soll. Daruberhinaus wird festgestellt, dass die Einbussen, die bei Streuung oder Erwerbslosigkeit auftreten, sich in dem Zeitraum nach der Einfuhrung betrachtlicher Wettbewerbsfreiheit in Australien zu Beginn der achtziger Jahre verscharft haben. Es ist wahrscheinlich, dass dies seitdem in einer Zunahme der Unterschiede der naturlichen Erwerbslosenrate zwischen den einzelnen Regionen reflektiert wird.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Regional Studies.

Volume (Year): 35 (2001)
Issue (Month): 2 ()
Pages: 93-102

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Handle: RePEc:taf:regstd:v:35:y:2001:i:2:p:93-102

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Keywords: Unemployment; Regional Disparities; Cointegration; Error Correction Model;


References listed on IDEAS
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  1. Banerjee, Anindya & Lumsdaine, Robin L & Stock, James H, 1992. "Recursive and Sequential Tests of the Unit-Root and Trend-Break Hypotheses: Theory and International Evidence," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 271-87, July.
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  4. Lucrezia Reichlin & Peter Rappoport, 1989. "Segmented trends and non-stationary time series," ULB Institutional Repository 2013/10169, ULB -- Universite Libre de Bruxelles.
  5. Jeff Borland & Steven Kennedy, 1998. "Dimensions, Structure and History of Australian Unemployment," RBA Annual Conference Volume, in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia.
  6. Eric Zivot & Donald W.K. Andrews, 1990. "Further Evidence on the Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Cowles Foundation Discussion Papers 944, Cowles Foundation for Research in Economics, Yale University.
  7. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
  8. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
  9. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
  10. Crosby, M. & Olekalns, N., 1997. "Inflation, Unemployment and the Nairu in Australia," Department of Economics - Working Papers Series 543, The University of Melbourne.
  11. Guy Debelle & James Vickery, 1998. "Labour Market Adjustment: Evidence on Interstate Labour Mobility," RBA Research Discussion Papers rdp9801, Reserve Bank of Australia.
  12. Jaakko Pehkonen & Hannu Tervo, 1998. "Persistence and Turnover in Regional Unemployment Disparities," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 445-458.
  13. Archibald, G C, 1969. "The Phillips Curve and the Distribution of Unemployment," American Economic Review, American Economic Association, vol. 59(2), pages 124-34, May.
  14. Gordon, Ian, 1979. "Regional Unemployment Elasticities: The Neglected Role of Migration," Scottish Journal of Political Economy, Scottish Economic Society, vol. 26(1), pages 97-101, February.
  15. Elias, D Peter B, 1978. "Regional Unemployment Elasticities: Further Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 25(1), pages 89-96, February.
  16. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 237-252.
  17. Phillips, P.C.B., 1986. "Understanding spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 33(3), pages 311-340, December.
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Cited by:
  1. Ruth F.G. Williams & D.P. Doessel & Jerneja Sveticic, 2012. "Are there Regional Disparities in Suicide Rates? Quantifying Suicide Rates? Quantifying Suicide Distributions for Queensland, 1990-2007," Working Papers 2012.02, School of Economics, La Trobe University.
  2. Taylor, Andrew & Shepherd, David & Duncan, Stephen, 2005. "The structure of the Australian growth process: A Bayesian model selection view of Markov switching," Economic Modelling, Elsevier, vol. 22(4), pages 628-645, July.
  3. Robert Dixon & David Shepherd, 2009. "Regional Dimensions of the Australian Business Cycle," Department of Economics - Working Papers Series 1088, The University of Melbourne.
  4. Bande, Roberto & Fernández, Melchor & Montuenga, Víctor, 2008. "Regional unemployment in Spain: Disparities, business cycle and wage setting," Labour Economics, Elsevier, vol. 15(5), pages 885-914, October.


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