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Long Term Unemployment: The Case for Policy Reform

Published online by Cambridge University Press:  01 January 2023

Bruce Chapman
Bruce Chapman*
Affiliation:
Australian National University
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Abstract

Long term unemployment is now Australia’s most difficult and costly labour market problem. This paper argues the case for a different policy reorientation to what has been followed in the past. The first conclusion is that in the absence of a substantial reorientation of policy long term unemployment will remain very high, with the absolute number staying above the level inherited from the 1982/83 recession — which was until the current recession the highest in Australian history. Second, the equity and macroefficiency costs of not doing anything radically different are argued to be very high.

A final part of the analysis considers the fundamental challenge of the Job Compact policy suggestion made in the Government’s Green Paper on unemployment. However, the way in which the policy is to be instituted needs attention. It is likely that the use of the current JOBSTART wage subsidy scheme will not be enough to achieve the desired outcomes.

Type
Research Article
Information
The Economic and Labour Relations Review , Volume 4 , Issue 2 , December 1993 , pp. 218 - 240
Copyright
Copyright © The Author(s) 1993

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Footnotes

*

This paper draws heavily on the report Long Term Unemployment: Causes, Consequences, and Policy Responses, commissioned from the author by the Department of Employment, Education and Training and released in December 1993. DEET has kindly given permission for the use of the material, this does not mean that the Department endorses its contents. Anthony Salvage assisted greatly on the research side.

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