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Hidden Unemployment and Older Male Workers



A number of policy reforms have recently been announced by the Commonwealth government to encourage greater labour force participation by older people in the context of an ageing society. These policy reforms are generally supply side in orientation such as the removal of the Mature Age Allowance, or restrictions to the Disability Support Pension. In this paper it is argued that these pensions have historically been used to accommodate otherwise unemployed older male workers. A number of methods are used to quantify the level of hidden unemployment within the older male population over recent decades. Estimates of adjusted unemployment rates, which include hidden as well as official unemployment, reveal a very dramatic picture of unutilised older male labour beneath relatively modest official unemployment rates. It is argued that without complementary employment policy addressing the labour demand side these policy reforms will achieve little except to reveal the previously high levels of hidden unemployment in official unemployment statistics.

Suggested Citation

  • O'Brien, Martin, 2004. "Hidden Unemployment and Older Male Workers," Economics Working Papers wp04-02, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp04-02

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    References listed on IDEAS

    1. Breusch, T S, 1978. "Testing for Autocorrelation in Dynamic Linear Models," Australian Economic Papers, Wiley Blackwell, vol. 17(31), pages 334-355, December.
    2. R. G. Gregory & P. J. Sheehan, 1973. "The Cyclical Sensitivity of Labour Force Participation Rates," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 6(2), pages 9-20.
    3. Ross S. Guest & Ian M. McDonald, 2000. "Population Ageing and Projections of Government Social Outlays in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(1), pages 49-64.
    4. Hansen, Bruce E., 1992. "Testing for parameter instability in linear models," Journal of Policy Modeling, Elsevier, vol. 14(4), pages 517-533, August.
    5. Martin J. O’Brien, 2000. "Older male labour force participation: the role of social security and hidden unemployment," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 4(3), pages 206-223, September.
    6. Kiefer, Nicholas M. & Salmon, Mark, 1983. "Testing normality in econometric models," Economics Letters, Elsevier, vol. 11(1-2), pages 123-127.
    7. O'Brien, Martin, 2003. "A Unit Record Analysis of Older Male Labour Force Participation," Economics Working Papers wp03-17, School of Economics, University of Wollongong, NSW, Australia.
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    hidden unemployment; older male workers; employment policy;

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