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Regional Unemployment Disparities in Australia

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Author Info
Robert Dixon, David Shepherd, James Thomson

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Abstract

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 à examiner l'essentiel des écarts entre les taux de chômage régional en Australie (à savoir au niveau des états) de 1978 à 1999 et son rapport au taux de chômage moyen. A partir d'une analyse cointégrée, il s'avère que les deux variables ne sont pas en corrélation étroite, ce qui laisse supposer qu'il va falloir des politiques en faveur de l'emploi, soit microéconomiques, soit différenciées, qui se font plus sentir (et touchent proportionnellement plus de gens) au fur et à mesure que le taux de chômage baisse pour assurer la péréquation du chômage régional. Il s'avère aussi un compromis plus fort entre la dispersion et le chômage au cours des années qui suivent l'importante déréglementation de l'économie australienne dans les années 1980. Il est probable que les écarts entre les taux de chômage régional naturel se creusent àcette époque. Der vorliegende Aufsatz untersucht die Natur der Disparitäten 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 verschärft werden (und verhältnismäßig mehr Personen betreffen) müssen, wenn in den Regionen allgemeine Fairneß in Erwerbslosigkeit erhalten bleiben soll. Darüberhinaus wird festgestellt, daß die Einbußen, die bei Streuung oder Erwerbslosigkeit auftreten, sich in dem Zeitraum nach der Einführung beträchtlicher Wettbewerbsfreiheit in Australien zu Beginn der achtziger Jahre verschärft haben. Es ist wahrscheinlich, daß dies seitdem in einer Zunahme der Unterschiede der natürlichen Erwerbslosenrate zwischen den einzelnen Regionen reflektiert wird.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 35 (2001)
Issue (Month): 2 (April)
Pages: 93-102
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Handle: RePEc:taf:regstd:v:35:y:2001:i:2:p:93-102

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

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March. [Downloadable!] (restricted)
  2. Phillips, P.C.B., 1986. "Understanding spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 33(3), pages 311-340, December. [Downloadable!] (restricted)
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  3. 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. [Downloadable!]
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  4. Guy Debelle & James Vickery, 1998. "Labour Market Adjustment: Evidence on Interstate Labour Mobility," RBA Research Discussion Papers rdp9801, Reserve Bank of Australia. [Downloadable!]
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  5. 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. [Downloadable!] (restricted)
  6. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor and Francis Journals, vol. 31(3), pages 237-252, May. [Downloadable!] (restricted)
  7. Matthew Tonts, 1999. "Some Recent Trends In Australian Regional Economic Development Policy," Regional Studies, Taylor and Francis Journals, vol. 33(6), pages 581-586, August. [Downloadable!] (restricted)
  8. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July. [Downloadable!] (restricted)
  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.
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  10. Rappoport, Peter & Reichlin, Lucrezia, 1989. "Segmented Trends and Non-stationary Time Series," Economic Journal, Royal Economic Society, vol. 99(395), pages 168-77, Supplemen. [Downloadable!] (restricted)
  11. 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, Yale University. [Downloadable!]
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  12. 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.
  13. 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.
  14. Crosby, M. & Olekalns, N., 1997. "Inflation, Unemployment and the Nairu in Australia," Department of Economics - Working Papers Series 543, The University of Melbourne.
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  15. Jaakko Pehkonen, Hannu Tervo, 1998. "Persistence and Turnover in Regional Unemployment Disparities," Regional Studies, Taylor and Francis Journals, vol. 32(5), pages 445-458, July. [Downloadable!] (restricted)
  16. Ron Martin, 1993. "Remapping British Regional Policy: The End of the North-South Divide?," Regional Studies, Taylor and Francis Journals, vol. 27(8), pages 797-805, January. [Downloadable!] (restricted)
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Cited by:
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  1. A. M. Dockery & Elizabeth Webster, 2001. "Long-term Unemployment and Work Deprived Individuals: Issues and Policies," CEPR Discussion Papers 445, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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