Cyclical Flows in Australian Labour Markets
26 Pages Posted: 11 Dec 2009 Last revised: 20 May 2010
Date Written: December 7, 2009
Using a four-state model, we show that Australian labour markets became more flexible after 1980, but most gains occurred before 1993. We find that the responses of the transition probabilities to the phases of the business cycle are gender-dependent. For men, job-losing probabilities are counter-cyclical, but not job-finding. For women the cycle has significant positive effects on job-finding, which are amplified in recessions. Job-losing and job-finding are both important for the evolution of unemployment over the whole business cycle, but during recessions, job-finding seems to be a bigger issue for women. Each transition probability explains only a small proportion of participation rates.
Keywords: Labour market flows, unemployment, transition probabilities, business cycles
JEL Classification: E24, E32
Suggested Citation: Suggested Citation