Was Working Nation Working?

Abstract

After several months of research and consultation the previous Labor government introduced in May 1994 a set of labour market programs targeted at the long term unemployed with its publication of Working Nation. With the new Coalition government taking office in March 1996 we saw the end of Working Nation. Working Nation had a short life: it was born accompanied with a loud fanfare, it was buried quietly. Did Working Nation labour market programs lead to a fall in unemployment and a fall in long term unemployment? This paper attempts to evaluate its success using simple econometric methods on macroeconomic data. Our results suggest that although Working Nation had a very short life it succeeded in helping the long term unemployed: it was a very valuable social experiment which was aborted for political reasons. The Coalition government has apparently lost interest in the long term unemployed: there has been a massive cutback in expenditure on labour market programs and the only plans it has announced to date are the work for the dole scheme for long term unemployed young people. It is hoping that its industrial relations legislation will lead to a miraculous solution to the problem of unemployment and long term unemployment which has plagued most of the OECD economies for several years.