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Why Are Recessions As Deep As They Are? The Behaviour Over Time Of The Outflow From Unemployment: A New Perspective

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  • ROBERT DIXON
  • JOHN FREEBAIRN
  • G. C. LIM

Abstract

In this paper we deal with five related questions. What are the 'stylised facts'about the behaviour of flows into and out of unemployment and the Unemployment Rate in Australia, especially in recessions? Why does the number of persons flowing out of Unemployment (including the number flowing into employment) rise in recessions? How does outflow behaviour affect the severity of recessions? What has been the history of the probability of any one unemployed person exiting unemployment and what is the elasticity of this probability with respect to the Unemployment Rate? Has this elasticity been changing over time and, if so, what are the consequences of this for the severity of recessions?

Suggested Citation

  • Robert Dixon & John Freebairn & G. C. Lim, 2002. "Why Are Recessions As Deep As They Are? The Behaviour Over Time Of The Outflow From Unemployment: A New Perspective," Department of Economics - Working Papers Series 842, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:842
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    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-02/842.pdf
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    References listed on IDEAS

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    1. Burda, Michael & Wyplosz, Charles, 1994. "Gross worker and job flows in Europe," European Economic Review, Elsevier, vol. 38(6), pages 1287-1315, June.
    2. Dixon, R., 2001. "Australian Labour Force Data: How Representative is the 'Population Represented by the Matched Sample'?," Department of Economics - Working Papers Series 772, The University of Melbourne.
    3. Jerome Fahrer & Alexandra Heath, 1992. "The Evolution of Employment and Unemployment in Australia," RBA Research Discussion Papers rdp9215, Reserve Bank of Australia.
    4. Burgess, Simon M., 1994. "Matching models and labour market flows," European Economic Review, Elsevier, vol. 38(3-4), pages 809-816, April.
    5. Jeff Borland, 1990. "Unemployment in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 23(1), pages 41-51, March.
    6. William Foster, 1981. "Gross Flows in the Australian Labour Market A First Look," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 14(4), pages 57-64, December.
    7. Robert Dixon, 2001. "Australian Labour Force Data: How Representative is the ‘Population Represented by the Matched Sample’?," The Economic and Labour Relations Review, , vol. 12(2), pages 303-330, December.
    8. Robert Dixon & G.C. Lim, 2002. "Australian gross flows data: the labour force survey and the size of the population represented by the matched sample," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 5(1), pages 1-21, March.
    9. Poterba, James M & Summers, Lawrence H, 1995. "Unemployment Benefits and Labor Market Transitions: A Multinomial Logit Model with Errors in Classification," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 207-216, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Robert Dixon & John Freebairn & Guay Lim, 2005. "An Examination of Net Flows in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(1), pages 25-42, March.
    2. Robert Dixon & John Freebairn & Guay Lim, 2007. "Time-varying equilibrium rates of unemployment: an analysis with Australian data," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(4), pages 205-225.
    3. Robert Dixon, 2007. "Regional Differences in the Severity of Recessions in the UK," Department of Economics - Working Papers Series 1009, The University of Melbourne.
    4. Robert Dixon & John Freebairn & G. C. Lim, 2004. "A Framework For Understanding Changes In The Unemployment Rate In A Flows Context: An Examination Net Flows In The Australian Labour Market," Department of Economics - Working Papers Series 910, The University of Melbourne.
    5. Robert Dixon, 2007. "Common Cycles in Labour Market Separation Rates for Australian States," Department of Economics - Working Papers Series 991, The University of Melbourne.
    6. Jeff Borland, 2009. "What Happens to the Australian Labour Market in Recessions?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(2), pages 232-242, June.

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    More about this item

    Keywords

    Worker Flows; Business Cycle; Unemployment;
    All these keywords.

    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

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