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Labour Market Adjustment: Evidence on Interstate LabourMobility

  • Guy Debelle
  • James Vickery

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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Article provided by The University of Melbourne, Melbourne Institute of Applied Economic and Social Research in its journal The Australian Economic Review.

Volume (Year): 32 (1999)
Issue (Month): 3 ()
Pages: 249-263

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Handle: RePEc:bla:ausecr:v:32:y:1999:i:3:p:249-263
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  1. P. Diamond, 1980. "Aggregate Demand Management in Search Equilibrium," Working papers 268, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Bentolila, Samuel, 1997. "Sticky labor in Spanish regions," European Economic Review, Elsevier, vol. 41(3-5), pages 591-598, April.
  3. 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.
  4. Eichengreen, Barry, 1990. "One Money for Europe? Lessons from the US Currency Union," Department of Economics, Working Paper Series qt6ks1k831, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. 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.
  6. 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.
  7. Decressin, Jörg & Fatás, Antonio, 1994. "Regional Labour Market Dynamics in Europe," CEPR Discussion Papers 1085, C.E.P.R. Discussion Papers.
  8. 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.
  9. 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.
  10. 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.
  11. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 581-589, April.
  12. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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