Modelling labour market transitions in Australia
Date
1986
Authors
Hui, Weng T
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This thesis investigates issues relating to two aspects of unemployment
that has gained importance in recent years.
The first aspect concerns the growing numbers of hidden unemployed in
the economy. The implications of this phenomenon for economic analysis is
demonstrated by its impact on the macroeconomic analysis of the
unemployment-vacancy relationship. A simple stock-flow model is used to
predict the effect of hidden unemployment on the UV loci. A systematic
approach to estimation of the UV curve is adopted and the empirical results
confirm the a priori predictions of this model.
The second aspect concerns the state dependence interpretation of
unemployment behaviour. A search-theoretic framework is adopted to provide
the basis for specification of the models to be estimated. The determinants
of transition from unemployment of Australian youths are investigated at the
micro level using an Australian labour market longitudinal data set. Survival
modelling techniques are applied to estimation of the hazard functions.
Structural estimation of the job search model which involves the estimation of
the reservation wage function is also undertaken. Positive duration
dependence in unemployment is implicated by the results from these analyses.
A novel approach to the modelling of recurrent unemployment is also
introduced in this thesis. These models, based on the stochastic counting
processes theory, allow the pattern of occurrence of employment events and
duration of successive unemployment spells to be determined. Evidence of
positive occurrence dependence are found from this analysis.
Finally, some issues relating to targeted employment susbsidies are also
investigated. The costs of this policy intervention are compared with the
alternative of providing only unemployment benefits. It is shown that the
nature of duration dependence is vitally important for the economic
justification of the subsidy policy.
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Thesis (PhD)
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