Sectoral Employment Dynamics in Australia

20 Pages Posted: 15 May 2020

See all articles by Heather M. Anderson

Heather M. Anderson

Monash University - Department of Economics

Giovanni Caggiano

Department of Economics, Monash University; University of Padova

Farshid Vahid

Monash University - Department of Econometrics and Business Statistics

Benjamin Wong

Monash University - Department of Econometrics & Business Statistics

Date Written: May 15, 2020

Abstract

In the aftermath of the covid-19 pandemic, the prevention of further decline in aggregate employment and turning it around are high on the agenda of policymakers. To this end, it is imperative to have a disaggregated model of employment, given the unequal effects of covid-19 on employment in different sectors of the economy. In this paper we develop a multivariate time series model of employment in 19 sectors of the Australian economy. We provide the predictions of this model conditional on various scenarios that are based on the most recent quantitative information about sectoral employment in Australia. We estimate that the drop in total employment in the second quarter of 2020 will be in between 7 and 13 percentage points, compared to the second quarter of 2019. We also use this model to determine the long-run effect of a 1% increase in economic activity in any chosen sector on aggregate employment. Our findings point to manufacturing and construction sectors as those that might generate the largest positive spillovers for the rest of the economy. Moreover, we provide an interactive web-based app as well as an interactive spreadsheet that produce our model’s 5-year forecasts based on any user-specified scenario for the current and following three quarters. As the covid-19 pandemic evolves and some restrictions are safely lifted or other restrictions become necessary, the sectoral employment multipliers together with the interactive tools produced here will provide useful information for policymakers.

Suggested Citation

Anderson, Heather and Caggiano, Giovanni and Vahid, Farshid and Wong, Benjamin, Sectoral Employment Dynamics in Australia (May 15, 2020). CAMA Working Paper No. 51/2020, Available at SSRN: https://ssrn.com/abstract=3601464 or http://dx.doi.org/10.2139/ssrn.3601464

Heather Anderson

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

Giovanni Caggiano

Department of Economics, Monash University ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia

HOME PAGE: http://https://sites.google.com/site/giovannicaggiano72/CV/home

University of Padova ( email )

Via 8 Febbraio, 2
Padova, Vicenza 35122
Italy

Farshid Vahid

Monash University - Department of Econometrics and Business Statistics ( email )

Wellington Road
Clayton, Victoria 3168
Australia
+61 3 9905 2359 (Phone)

Benjamin Wong (Contact Author)

Monash University - Department of Econometrics & Business Statistics ( email )

Wellington Road
Clayton, Victoria 3168
Australia

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