IDEAS home Printed from https://ideas.repec.org/p/tsy/wpaper/wpaper_tsy_wp_2016_4.html
   My bibliography  Save this paper

An Australian Labour Market Conditions Index

Author

Listed:
  • Angelia Grant

    (Treasury, Government of Australia)

  • Wilma Gillies

    (Treasury, Government of Australia)

  • Ray Harris

    (Treasury, Government of Australia)

  • Melissa Ljubic

    (Treasury, Government of Australia)

Abstract

This paper constructs a labour market conditions index for Australia using principal components analysis with 16 labour market variables. The index is broadly consistent with the business cycle in Australia. It shows that there was a large amount of slack in the Australian labour market during the global financial crisis and it has only recently returned to around average conditions. The index explains between 64 and 87 per cent of the variation in half of the labour market variables used in the analysis. The correlation between wage growth and the labour market conditions index is stronger than the correlation with the unemployment rate alone. In addition, the labour market conditions index appears to be a strong leading indicator of wage growth. The index is not sensitive to the addition of other variables.

Suggested Citation

  • Angelia Grant & Wilma Gillies & Ray Harris & Melissa Ljubic, 2016. "An Australian Labour Market Conditions Index," Treasury Working Papers 2016-04, The Treasury, Australian Government, revised Dec 2016.
    • Handle: RePEc:tsy:wpaper:wpaper_tsy_wp_2016_4
    as

    Download full text from publisher

    File URL: http://treasury.gov.au/~/media/Treasury/Publications%20and%20Media/Publications/2016/An%20Australian%20Labour%20Market%20Conditions%20Index/Downloads/PDF/Aust_Labour_Market_Cond_Index.ashx
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    NA;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tsy:wpaper:wpaper_tsy_wp_2016_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Treasury (Commonwealth of Australia) (email available below). General contact details of provider: https://edirc.repec.org/data/trgovau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.