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An Exploration of Marginal Attachment to the Australian Labour Market

Author

Listed:
  • Matthew Gray

    (Australian Institute of Family Studies)

  • Alexandra Heath

    (Reserve Bank of Australia)

  • Boyd Hunter

    (Centre for Aboriginal Economic Policy Research, ANU)

Abstract

One of the key factors that affects the extent to which changes in labour demand affect other macroeconomic variables, such as wage inflation, is the degree of matching between potential employees and available jobs. The pool of potential employees is usually measured as the pool of unemployed workers. However, this ignores an important group of people who are not officially unemployed, but do represent potential labour supply the marginally attached workforce, which can be broadly defined as the people who are not currently in the labour force, but want to work and are available to take up employment. The aim of this paper is to examine the extent to which the labour market behaviour of marginally attached workers is similar to that of the unemployed. We use longitudinal data from the Survey of Employment and Unemployment Patterns (SEUP), which provides detailed information on the characteristics of individuals as well as their labour market experiences, to compare dynamic behaviour across labour market groups, for example, the probability of moving into employment. We find that in some respects the dynamic behaviour of the marginally attached is similar to that of the unemployed, but in others it is quite different. Accordingly, the most appropriate measure of labour supply depends on the policy question, and consequently a range of measures should be considered.

Suggested Citation

  • Matthew Gray & Alexandra Heath & Boyd Hunter, 2002. "An Exploration of Marginal Attachment to the Australian Labour Market," RBA Research Discussion Papers rdp2002-07, Reserve Bank of Australia.
  • Handle: RePEc:rba:rbardp:rdp2002-07
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    File URL: http://www.rba.gov.au/publications/rdp/2002/pdf/rdp2002-07.pdf
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    References listed on IDEAS

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    1. Tachibanaki, Toshiaki & Sakurai, Kojiro, 1991. "Labour supply and unemployment in Japan," European Economic Review, Elsevier, vol. 35(8), pages 1575-1587, December.
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    Citations

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    Cited by:

    1. Scott Baum & William Mitchell, 2010. "Labour Underutilisation and Gender: Unemployment Versus Hidden-Unemployment," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 29(2), pages 233-248, April.
    2. Boyd Hunter & John Taylor, 2004. "Indigenous Employment Forecasts: Implications for Reconciliation," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 11(2), pages 179-192.
    3. Böhm, Kathrin, 2011. "Schätzung der Stillen Reserve mit dem Mikrozensuspanel 2001-2004 : eine Machbarkeitsstudie," IAB-Forschungsbericht 201102, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Jeremy Lawson & Crystal Ossolinski, 2010. "Employment Composition: A Study of Australian Employment Growth, 2002–2006," RBA Research Discussion Papers rdp2010-04, Reserve Bank of Australia.
    5. Michelle van der Merwe, 2016. "Factors Affecting an Individual's Future Labour Market Status," RBA Bulletin, Reserve Bank of Australia, pages 11-22, December.

    More about this item

    Keywords

    dynamic behaviour; effective labour supply; marginal attachment; transition probability; unemployment;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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