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The Elasticity of Demand for Labour in Australia


  • Lewis, Philip E T
  • MacDonald, Garry


The elasticity of demand for labor at the aggregate level is an important parameter for macroeconomic analysis. In particular, policy issues concerning the impact of wage falls on employment and unemployment hinge on the size of this parameter. It is argued in the present paper that previous work on the elasticity of demand for labor in Australia has been unsatisfactory in a number of ways. A new set of estimates is provided that are derived using a better methodology than before. Copyright 2002 by The Economic Society of Australia.

Suggested Citation

  • Lewis, Philip E T & MacDonald, Garry, 2002. "The Elasticity of Demand for Labour in Australia," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 18-30, March.
  • Handle: RePEc:bla:ecorec:v:78:y:2002:i:240:p:18-30

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    References listed on IDEAS

    1. Chiswick, Barry R. & Miller, Paul W., 2008. "The "Negative" Assimilation of Immigrants: A Special Case," IZA Discussion Papers 3563, Institute for the Study of Labor (IZA).
    2. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    3. Stephen Nickell, 1982. "The Determinants of Occupational Success in Britain," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 43-53.
    4. Chiswick, Barry R. & Miller, Paul W., 2007. "Earnings and Occupational Attainment: Immigrants and the Native Born," IZA Discussion Papers 2676, Institute for the Study of Labor (IZA).
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    Cited by:

    1. Lei Lei Song & John Freebairn, 2006. "How Big Was the Effect of Budget Consolidation on the Australian Economy in the 1990s?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(1), pages 35-46, March.
    2. Truong, Truong P. & Hensher, David A., 2012. "Linking discrete choice to continuous demand within the framework of a computable general equilibrium model," Transportation Research Part B: Methodological, Elsevier, vol. 46(9), pages 1177-1201.
    3. Anaman, Kwabena A., 2004. "Determinants of economic growth in Brunei Darussalam," Journal of Asian Economics, Elsevier, vol. 15(4), pages 777-796, August.
    4. David Shepherd & Robert Dixon, 2008. "The Cyclical Dynamics and Volatility of Australian Output and Employment," The Economic Record, The Economic Society of Australia, vol. 84(264), pages 34-49, March.
    5. Marika Karanassou & Hector Sala, 2010. "Labour Market Dynamics in Australia: What Drives Unemployment?," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 185-209, June.
    6. Benoit Freyens & Paul Oslington, 2007. "Dismissal Costs and Their Impact on Employment: Evidence from Australian Small and Medium Enterprises," The Economic Record, The Economic Society of Australia, vol. 83(260), pages 1-15, March.
    7. Luis N. Lanteri, 2013. "Determinantes económicos del nivel de empleo. Alguna evidencia para Argentina," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 73-100, May.
    8. Mark Bahnisch & John Quiggin, 2006. "IR Reform: Choice and Compulsion," Australian Public Policy Program Working Papers WP2P06, Risk and Sustainable Management Group, University of Queensland.
    9. Robert Dixon & John Freebairn & G C Lim, 2004. "An Employment Equation For Australia: 1966-2001," Department of Economics - Working Papers Series 892, The University of Melbourne.
    10. Robert Dixon & John Freebairn, 2007. "Hours of Work: A Demand Perspective," Department of Economics - Working Papers Series 1022, The University of Melbourne.
    11. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.

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