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Regional Unemployment Disparities

Author

Listed:
  • Dixon, R.
  • Shepherd, D.
  • Thomson, J.

Abstract

In this paper we examine the nature of disparities in regional (State) unemployment rates in Australia over the period 1978-1999 and their relationship to the national unemployment rate. As a measure of dispersion we use the sum of the (weighted) deviations of regional unemployment rates from the national rate. We show that this figure may be interpreted as the number of new jobs or labour force movements that would be needed to even out unemployment rates between regions, expressed as a proportion of the total number currently employed in all regions. Using co-integration analysis, we find that there is a (long-run) relationship between the degree of dispersion in the regional unemployment rates and the level of the national unemployment rate. The relationship between the two is negative implying that, as the national unemployment rate falls, micro and/or differentiated labour markets policies need to bite harder (and affect proportionately more people) if equity in unemployment across regions is to be maintained. We also find that the trade-off between dispersion and unemployment has become steeper in the period following significant deregulation of the Australian economy in the early Nineteen-Eighties. It would appear likely that this reflects an increase in differences in the Natural Rate of Unemployment between the regions since that time.

Suggested Citation

  • Dixon, R. & Shepherd, D. & Thomson, J., 2000. "Regional Unemployment Disparities," Department of Economics - Working Papers Series 737, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:737
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    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-00-01/737.pdf
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    Citations

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    Cited by:

    1. Joanna TYROWICZ & Piotr W�JCIK, 2009. "Some Remarks On The Effects Of Active Labour Market Policies In Post-Transition," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(2(8)_ Sum).
    2. Robert Dixon & David Shepherd, 2013. "Regional Dimensions of the Australian Business Cycle," Regional Studies, Taylor & Francis Journals, vol. 47(2), pages 264-281, February.
    3. 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.
    4. Robert Dixon & David Shepherd, 2001. "Trends and Cycles in Australian State and Territory Unemployment Rates," The Economic Record, The Economic Society of Australia, vol. 77(238), pages 252-269, September.
    5. Nicolaas Groenewold & Alfred Hagger, 2007. "Regional Unemployment Disparities: An Evaluation of Policy Measures," Economics Discussion / Working Papers 07-05, The University of Western Australia, Department of Economics.

    More about this item

    Keywords

    UNEMPLOYMENT ; REGIONAL DEVELOPMENT;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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