IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp2068.html

From Golden Age to Golden Age: Australia's "Great Leap Forward"?

Author

Listed:
  • Frijters, Paul

    (London School of Economics)

  • Gregory, Bob

    (Australian National University)

Abstract

The twenty-five years after WW 2 witnessed strong labour market institutions and beneficial labour market outcomes – high wage growth and integration of low-skilled immigrants. Then came the macro shocks of the mid 1970s. Labour market outcomes deteriorated as full-time employment population ratios fell, particularly among males; unemployment and welfare use increased; and real wages grew slowly. The golden age passed. In response, successive governments have increasingly begun to dismantle the institutional framework. We address this transition within a simple long run graphical framework to help us marshal facts and arguments and to discuss the likely impact of institutional reform.

Suggested Citation

  • Frijters, Paul & Gregory, Bob, 2006. "From Golden Age to Golden Age: Australia's "Great Leap Forward"?," IZA Discussion Papers 2068, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp2068
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp2068.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gerfin, Michael & Lechner, Michael & Steiger, Heidi, 2005. "Does subsidised temporary employment get the unemployed back to work? Aneconometric analysis of two different schemes," Labour Economics, Elsevier, vol. 12(6), pages 807-835, December.
    2. repec:bla:ausecr:v:37:y:2004:i:2:p:173-179 is not listed on IDEAS
    3. Bambra, Clare & Whitehead, Margaret & Hamilton, Val, 2005. "Does 'welfare-to-work' work? A systematic review of the effectiveness of the UK's welfare-to-work programmes for people with a disability or chronic illness," Social Science & Medicine, Elsevier, vol. 60(9), pages 1905-1918, May.
    4. Bob Gregory, 1999. "Labour Market Institutions and the Gender Pay Ratio," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(3), pages 273-278, September.
    5. R. G. Gregory & R. C. Duncan, 1981. "Segmented Labor Market Theories and the Australian Experience of Equal Pay for Women," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 3(3), pages 403-428, April.
    6. Mitchel Y. Abolafia (ed.), 2005. "Markets," Books, Edward Elgar Publishing, number 2788.
    7. Andrew Leigh, 2007. "Does Raising the Minimum Wage Help the Poor?," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 432-445, December.
    8. Paul Frijters, 1997. "Capital scarcities as a reason for high unemployment in the European Union," Macroeconomics 9706002, University Library of Munich, Germany.
    9. Boyd H. Hunter, 2003. "The Rise of the CDEP Scheme and Changing Factors Underlying Indigenous Male Employment," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(3), pages 473-496, September.
    10. Culley, M & Curtain, R ., 2001. "New apprenticeships: An unheralded Labour Market Program," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 27(3), pages 204-215.
    11. Fougere, Denis & Kramarz, Francis & Magnac, Thierry, 2000. "Youth employment policies in France," European Economic Review, Elsevier, vol. 44(4-6), pages 928-942, May.
    12. Gareth Leeves, 2002. "Youth Unemployment Outflow Rates And Labor Market Programs: Australian Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 301-315, July.
    13. Frölich, Markus & Lechner, Michael, 2004. "Regional Treatment Intensity as an Instrument for the Evaluation of Labour Market Policies," IZA Discussion Papers 1095, IZA Network @ LISER.
    14. E. Paul Durrenberger, 2005. "Labour," Chapters, in: James G. Carrier (ed.), A Handbook of Economic Anthropology, chapter 8, Edward Elgar Publishing.
    15. Richard Dickens & Alan Manning, 2004. "Spikes and spill-overs: The impact of the national minimum wage on the wage distribution in a low-wage sector," Economic Journal, Royal Economic Society, vol. 114(494), pages 95-101, March.
    16. Andrew Leigh, 2005. "Deriving Long‐Run Inequality Series from Tax Data," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages 58-70, August.
    17. Lixin Cai, 2004. "An Analysis of Durations on the Disability Support Pension (DSP) Program," Melbourne Institute Working Paper Series wp2004n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    18. Diamond, Peter A, 1998. "Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates," American Economic Review, American Economic Association, vol. 88(1), pages 83-95, March.
    19. Dickens, Richard & Alan Manning, 2003. "The Impact of the National Minimum Wage on the Wage Distribution in a Low-Wage Sector," Royal Economic Society Annual Conference 2003 60, Royal Economic Society.
    20. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers 2095, Harvard - Institute of Economic Research.
    21. Lisa Farrell & Paul Frijters, 2008. "Choosing to become a 'lost cause': the perverse effects of benefit preconditions," Oxford Economic Papers, Oxford University Press, vol. 60(1), pages 1-19, January.
    22. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    23. Emmanuel Saez, 2001. "Using Elasticities to Derive Optimal Income Tax Rates," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(1), pages 205-229.
    24. Webster, E & Johnson, D, 2002. "The equity effects of labour market programs," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 28(3), pages 198-227.
    25. A.M. Dockery & Elizabeth Webster, 2002. "Long-Term Unemployment and Work Deprived individuals: issues and Policies," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 5(2), pages 175-193, June.
    26. Stephen Machin & Joan Wilson, 2004. "Minimum wages in a low-wage labour market: Care homes in the UK," Economic Journal, Royal Economic Society, vol. 114(494), pages 102-109, March.
    27. Plug, Erik J. S. & van Praag, Bernard M. S. & Hartog, Joop, 1999. "If we knew ability, how would we tax individuals?," Journal of Public Economics, Elsevier, vol. 72(2), pages 183-211, May.
    28. Robert Haveman & Barbara Wolfe, 2002. "The 1996 US welfare reform: objectives, effects and lessons," Chapters, in: Hugh Mosley & Jacqueline O’Reilly (ed.), Labour Markets, Gender and Institutional Change, chapter 8, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeff Borland, 2005. "Impacts of Employment Regulation: Towards an Evaluation Framework," Occasional Papers 06/7, Ministry of Economic Development, New Zealand.
    2. Productivity Commission, 2007. "Potential Benefits of the National Reform Agenda," Research Papers 0701, Productivity Commission, Government of Australia.
    3. Paul Frijters & David Johnston & Michael Shields, 2012. "The Optimality of Tax Transfers: What does Life Satisfaction Data Tell Us?," Journal of Happiness Studies, Springer, vol. 13(5), pages 821-832, October.
    4. Robert G Gregory, 2012. "Living standards, terms of trade and foreign ownership: reflections on the Australian mining boom," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(2), pages 171-200, April.
    5. Herault, Nicolas & Vu, Ha & Wilkins, Roger, 2020. "The Effect of Job Search Requirements on Welfare Receipt," IZA Discussion Papers 13684, IZA Network @ LISER.
    6. Robert G. Gregory, 2013. "The Henderson Question? The Melbourne Institute and 50 Years of Welfare Policy," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(2), pages 202-215, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ilo:ilowps:462988 is not listed on IDEAS
    2. Støstad, Morten Nyborg & Cowell, Frank, 2024. "Inequality as an externality: Consequences for tax design," Journal of Public Economics, Elsevier, vol. 235(C).
    3. Findeisen, Sebastian & Sachs, Dominik, 2014. "Efficient Labor and Capital Income Taxation over the Life Cycle," Working Papers 14-17, University of Mannheim, Department of Economics.
    4. Laurence Jacquet & Etienne Lehmann, 2023. "Optimal tax problems with multidimensional heterogeneity: a mechanism design approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(1), pages 135-164, January.
    5. repec:ebl:ecbull:v:8:y:2006:i:2:p:1-6 is not listed on IDEAS
    6. Berger, Johannes & Strohner, Ludwig, 2020. "Documentation of the PUblic Policy Model for Austria and other European countries (PUMA)," Research Papers 11, EcoAustria – Institute for Economic Research.
    7. Stiglitz, Joseph E., 2002. "New perspectives on public finance: recent achievements and future challenges," Journal of Public Economics, Elsevier, vol. 86(3), pages 341-360, December.
    8. Stiglitz, Joseph E., 2018. "Pareto efficient taxation and expenditures: Pre- and re-distribution," Journal of Public Economics, Elsevier, vol. 162(C), pages 101-119.
    9. Axelle Ferriere & Philipp Grübener & Gaston Navarro & Oliko Vardishvili, 2023. "On the Optimal Design of Transfers and Income Tax Progressivity," Journal of Political Economy Macroeconomics, University of Chicago Press, vol. 1(2), pages 276-333.
    10. Jacquet, Laurence & Lehmann, Etienne & Van der Linden, Bruno, 2013. "Optimal redistributive taxation with both extensive and intensive responses," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1770-1805.
    11. Wojciech Kopczuk, 2012. "Taxation of Intergenerational Transfers and Wealth," NBER Working Papers 18584, National Bureau of Economic Research, Inc.
    12. Findeisen, Sebastian & Sachs, Dominik, 2015. "Designing efficient college and tax policies," Working Papers 15-09, University of Mannheim, Department of Economics.
    13. Michael Carlos Best & Henrik Jacobsen Jacobsen, 2013. "Optimal Income Taxation with Career Effects of Work Effort," Working Papers 2013-9, Princeton University. Economics Department..
    14. Mikhail Golosov & Pricila Maziero & Guido Menzio, 2013. "Taxation and Redistribution of Residual Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 121(6), pages 1160-1204.
    15. Simeon Schächtele, 2020. "Tax Responses at Low Taxable Incomes: Evidence from Germany," Fiscal Studies, John Wiley & Sons, vol. 41(2), pages 411-439, June.
    16. Marko Ledić & Ivica Rubil & Ivica Urban, 2023. "Tax progressivity and social welfare with a continuum of inequality views," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(5), pages 1266-1296, October.
    17. Florian Scheuer, 2014. "Entrepreneurial Taxation with Endogenous Entry," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 126-163, May.
    18. Mathias Hungerbühler & Etienne Lehmann & Alexis Parmentier & Bruno Van Der Linden, 2006. "Optimal Redistributive Taxation in a Search Equilibrium Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(3), pages 743-767.
    19. Emmanuel Farhi & Iván Werning, 2010. "Progressive Estate Taxation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 635-673.
    20. Hellwig, Christian & Werquin, Nicolas, 2022. "Using Consumption Data to Derive Optimal Income and Capital Tax Rates," TSE Working Papers 22-1284, Toulouse School of Economics (TSE), revised Jan 2026.
    21. Oztek, Abdullah Selim, 2019. "A Characterization for Marginal Income Tax Schedules," MPRA Paper 103046, University Library of Munich, Germany, revised 02 Dec 2019.
    22. Felix J. Bierbrauer & Pierre C. Boyer, 2016. "Efficiency, Welfare, and Political Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 461-518.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • D6 - Microeconomics - - Welfare Economics
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp2068. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.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.