Hostname: page-component-78c5997874-8bhkd Total loading time: 0 Render date: 2024-11-17T14:53:43.618Z Has data issue: false hasContentIssue false
  • English
  • Français

Reductions in Aggregate Unemployment as ‘A Free Lunch’

Published online by Cambridge University Press:  01 January 2023

Robert Dixon
Robert Dixon*
Affiliation:
Department of Economics, University of Melbourne
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

This paper looks at the effects of changes in the age composition of the labour force on aggregate male and female unemployment rates. While it has been common to look at aggregate participation rate changes in terms of a weighted average over age groups this seems not to be the case for unemployment. We show in this paper that changes in the age composition of the labour force (driven mainly by changes in the age distribution of the population) has affected the aggregate unemployment rates in a systematic and, with hindsight, predictable manner. Amongst other things, we show that in the past decade or so, policy makers have benefited from a not inconsequential “free lunch” in that changes in the age composition of the labour force have been pulling the aggregate unemployment rates down below what it would otherwise be by around one percent of the labour force. We also show that this free lunch is now coming to an end.

Type
Current Issues
Information
The Economic and Labour Relations Review , Volume 14 , Issue 1 , June 2003 , pp. 104 - 126
Copyright
Copyright © The Author(s) 2003

Footnotes

*

I am grateful to John Nevile and two referees for their helpful comments on an earlier draft.

References

Australian Bureau of Statistics (ABS) (1999) Labour Force Projections: Australia, Canberra, Catalogue Number 6260.0.Google Scholar
Chapman, B. and Withers, G. (2001) ‘Human Capital Accumulation’, in Nieuwenhuysen, J., et al (eds), Reshaping Australia’s Economy, Cambridge University Press, Cambridge, pp. 242–67.Google Scholar
Harris, C. (1966) ‘Interregional variations in the levels and rates of increase of per capita personal income’, Yorkshire Bulletin of Economic and Social Research, 18 (2), 95–108.CrossRefGoogle Scholar
Lewis, P., McLean, B. (1998) ‘The youth labour market in Australia: a survey’, Australian Journal of Labour Economics, 2 (2), 157–72.Google Scholar
Mitchell, W. (2000) ‘The Causes of Unemployment’, in Bell, S. (Ed), The Unemployment Crisis in Australia, Cambridge University Press, Cambridge, pp. 49–87.Google Scholar