From Golden Age to Golden Age: Australia's 'Great Leap Forward'?

Abstract:     
The twenty-five years after WW2 witnessed strong labour market institutions and beneficial labour market outcomes - high wage growth and integration of low-skilled immigrants. Then came the macro shocks of the mid 1970s. Labour market outcomes deteriorated as full-time employment population ratios fell, particularly among males; unemployment and welfare use increased; and real wages grew slowly. The golden age passed. In response, successive governments have increasingly begun to dismantle the institutional framework. We address this transition within a simple long run graphical framework to help us marshal facts and arguments and to discuss the likely impact of institutional reform.

Number of Pages in PDF File: 46

Keywords: unemployment, wage growth, welfare use, institutional reform, Australia

JEL Classification: J0, D6, E6, L5, O3

working papers series