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Long Term Unemployment: The Case for Policy Reform

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  • Bruce Chapman

Abstract

Long term unemployment is now Australia's most difficult and costly labour market problem. This paper argues the case for a different policy reorientation to what has been followed in the past. The first conclusion is that in the absence of a substantial reorientation of policy long term unemployment will remain very high, with the absolute number staying above the level inherited from the 1982/83 recession — which was until the current recession the highest in Australian history. Second, the equity and macroefficiency costs of not doing anything radically different are argued to be very high. A final part of the analysis considers the fundamental challenge of the Job Compact policy suggestion made in the Government's Green Paper on unemployment. However, the way in which the policy is to be instituted needs attention. It is likely that the use of the current JOBSTART wage subsidy scheme will not be enough to achieve the desired outcomes.

Suggested Citation

  • Bruce Chapman, 1993. "Long Term Unemployment: The Case for Policy Reform," The Economic and Labour Relations Review, , vol. 4(2), pages 218-240, December.
    • Handle: RePEc:sae:ecolab:v:4:y:1993:i:2:p:218-240
    DOI: 10.1177/103530469300400204
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    References listed on IDEAS

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    1. repec:bla:ecorec:v:68:y:1992:i:203:p:351-64 is not listed on IDEAS
    2. Sarah Rummery, 1992. "The Contribution of Intermittent Labour Force Participation to the Gender Wage Differential," The Economic Record, The Economic Society of Australia, vol. 68(4), pages 351-364, December.
    3. Gregory, R.G. & Daly, A.E., 1990. "Can Economic Theory Explain Why Australian Women Are So Well Paid Relative To Their U.S. Counterparts?," CEPR Discussion Papers 226, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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