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Labour Market Adjustment: Evidence on Interstate Labour Mobility

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  • Guy Debelle

    (Reserve Bank of Australia)

  • James Vickery

    (Reserve Bank of Australia)

Abstract

In this paper, we investigate the behaviour of the Australian state labour markets, focusing on the role of geographic labour mobility. We find that interstate migration does play an important role in reducing differences in labour market conditions between states, although permanent (or very persistent) differences between state unemployment rates remain. We also find that out-migration from a state resulting from a relative downturn in its labour market occurs slowly and steadily. Most of the migration takes place, on average, within four years, and the process of adjustment is complete after seven years.

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Bibliographic Info

Paper provided by Reserve Bank of Australia in its series RBA Research Discussion Papers with number rdp9801.

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Date of creation: Feb 1998
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Handle: RePEc:rba:rbardp:rdp9801

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Keywords: labour mobility; migration; unemployment;

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References

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  1. Faini, Riccardo & Galli, Giampaolo & Gennari, Pietro & Rossi, Fulvio, 1997. "An empirical puzzle: Falling migration and growing unemployment differentials among Italian regions," European Economic Review, Elsevier, vol. 41(3-5), pages 571-579, April.
  2. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
  3. Leamer, Edward E & Leonard, Herman B, 1983. "Reporting the Fragility of Regression Estimates," The Review of Economics and Statistics, MIT Press, vol. 65(2), pages 306-17, May.
  4. P. Diamond, 1980. "Aggregate Demand Management in Search Equilibrium," Working papers 268, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Oswald Andrew J., 1996. "A Conjecture on the Explanation for High Unemployment in the Industrialized Nations : Part I," The Warwick Economics Research Paper Series (TWERPS) 475, University of Warwick, Department of Economics.
  6. Bentolila, Samuel, 1997. "Sticky labor in Spanish regions," European Economic Review, Elsevier, vol. 41(3-5), pages 591-598, April.
  7. Gregory, R.G. & Hunter, B., 1995. "The Macro Economy and the Growth of Ghettos and Urban Poverty in Australia," CEPR Discussion Papers 325, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  8. Barry Eichengreen., 1990. "One Money for Europe? Lessons from the US Currency Union," Economics Working Papers 90-132, University of California at Berkeley.
  9. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
  10. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 581-589, April.
  11. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  12. DaVanzo, Julie, 1978. "Does Unemployment Affect Migration?-Evidence from Micro Data," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 504-14, November.
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Cited by:
  1. Robert Dixon & David Shepherd & James Thomson, 2001. "Regional Unemployment Disparities in Australia," Regional Studies, Taylor & Francis Journals, vol. 35(2), pages 93-102.
  2. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.
  3. Productivity Commission, 2009. "Review of Mutual Recognition Schemes," Research Reports, Productivity Commission, Government of Australia, number 32.
  4. Giesecke, James A. & Madden, John R., 2013. "Regional Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, Elsevier.
  5. David C Maré & Wai Kin Choy, 2001. "Regional Labour Market Adjustment and the Movements of People: A Review," Treasury Working Paper Series 01/08, New Zealand Treasury.
  6. Wai Kin Choy & David C Mare & Peter Mawson, 2002. "Modelling Regional Labour Market Adjustment in New Zealand," Treasury Working Paper Series 02/01, New Zealand Treasury.
  7. Jeff Borland, 2000. "Disaggregated Models of Unemployment in Australia," Melbourne Institute Working Paper Series wp2000n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  8. Peter Huber, 2003. "Quantity Adjustments in Candidate Countries Regional Labour Markets," ERSA conference papers ersa03p239, European Regional Science Association.
  9. David Norman & Thomas Walker, 2004. "Co-movement of Australian State Business Cycles," RBA Research Discussion Papers rdp2004-09, Reserve Bank of Australia.
  10. Thomas Walker & David Norman, 2004. "Co-movement of Australian State Business Cycles," Econometric Society 2004 Australasian Meetings 334, Econometric Society.
  11. Michelle Cunningham & Kathryn Davis, 2011. "Labour Market Outcomes in Regional Australia," RBA Bulletin, Reserve Bank of Australia, pages 1-8, September.

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