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A Characterization of Australian Unemployment Compensation: An Analysis of Labour Market Adjustment

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  • NOEL GASTON

Abstract

This paper uses a labour contracting framework to analyze the microeconomics of the Australian unemployment compensation system. We find that employers adjust labour inputs by using layoffs rather than shortened workweeks or work‐sharing during economic recessions. Increases in government benefits tend to reinforce this result Countervailing influences are shown to be the severity of the income test applying to benefits eligibility and the Family Allowance Supplement in its role as supplementing the income of low‐income families.

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  • Noel Gaston, 1992. "A Characterization of Australian Unemployment Compensation: An Analysis of Labour Market Adjustment," The Economic Record, The Economic Society of Australia, vol. 68(3), pages 247-253, September.
    • Handle: RePEc:bla:ecorec:v:68:y:1992:i:3:p:247-253
    DOI: 10.1111/j.1475-4932.1992.tb01771.x
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    References listed on IDEAS

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    1. Burdett, Kenneth & Wright, Randall, 1989. "Optimal firm size, taxes, and unemployment," Journal of Public Economics, Elsevier, vol. 39(3), pages 275-287, August.
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    11. Burdett, Kenneth & Wright, Randall, 1989. "Unemployment Insurance and Short-Time Compensation: The Effects on Layoffs, Hours per Worker, and Wages," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1479-1496, December.
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    Cited by:

    1. Arvind Ashta, 2017. "Work-sharing from Different Angles: A literature review," Working Papers CEB 17-033, ULB -- Universite Libre de Bruxelles.

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