Australian Unemployment in the Long Run, 1903-2007*

Sambit Bhattacharyya, Timothy Hatton

    Research output: Contribution to journalArticle

    Abstract

    We develop a two equation model of wage setting and unemployment, which we estimate on annual time series for Australia since Federation. Our model links the real wage level to productivity and to a set of wage pressure variables, while the unemployment rate is linked to the gap between the real wage and productivity and to demand side variables. We evaluate the contribution of different variables to the equilibrium unemployment rate for 1903-1941, 1942-1973 and 1974-2007. We also examine the effects on unemployment of several key policy-related episodes in wage regulation spread over the past century of labour market history.
    Original languageEnglish
    Pages (from-to)202-220
    JournalEconomic Record
    Volume87
    Issue number277
    DOIs
    Publication statusPublished - 2011

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