Hostname: page-component-669899f699-chc8l Total loading time: 0 Render date: 2025-04-29T02:33:41.507Z Has data issue: false hasContentIssue false
  • English
  • Français

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
Get access Rights & Permissions [Opens in a new window]

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

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

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.

References

Australian Council of Social Services (1993), Submission the the Committee on Employment Opportunities.Google Scholar
Australian Council of Trade Unions (1993), Submission the the Committee on Employment Opportunities.Google Scholar
Australian Local Government Association (1993), “Submission on Long—Term Unemployment in Australia to the Commonwealth Government’s Expert Committee on Employment and Unemployment”, Institute of Applied Economic and Social Research, University of Melbourne, November.Google Scholar
Blandy, Richard (1993), Achieving Full Employment, Submission to the Committee on Employment Opportunities.Google Scholar
Borland, Jeff, Chapman, Bruce J., Rimmer, Malcolm (1992), “Microeconomic reform in the Australian labour market”, in Forsyth, Peter (ed), Microeconomic Reform in Australia, Allen & Unwin, Sydney: 99–126.Google Scholar
Brooks, Clive, Volker, Paul (1986), “The Probability of Leaving Unemployment, The Influence of Duration, Destination and Demographics”, The Economic Record, 62 (178): 296–309.CrossRefGoogle Scholar
Brotherhood of St. Laurence (1993), Submission the the Committee on Employment Opportunities.Google Scholar
Budd, , Levine, P., Smith, P. N. (1987), “Long-term Unemployment and the Unemployment—Vacancies Relationship”, The Economic Journal, 98 (363): 1071–1091.Google Scholar
Chapman, Bruce J. (1993), Long Term Unemployment: Causes, Consequences and Policy Responses, Report commissioned by the Department of Employment, Education and Training, Canberra (December).Google Scholar
Chapman, Bruce J., Junankar, P. N., Kapuscinski, Cezary (1992), “Long Term Unemployment Projections”, Australian Bulletin of Labour, September: 195–207.Google Scholar
Chapman, Bruce J., Junankar, P. N., Kapuscinski, Cezary (1993), “Long-term Unemployment”, paper presented to the Centre for Economic Policy Research/Department of Employment, Education and Training Conference, Unemployment: Causes, Costs and Solutions, Australian National University, Canberra, February.Google Scholar
Chapman, Bruce J., Smith, Peter N. (1992), “Predicting the Long-term Unemployed: A Primer for the Commonwealth Employment Service”, in Gregory, R. G., Karmel, T. (eds), Youth in the Eighties: Research from the Australian Longitudinal Survey, Centre for Economic Policy Research, Australian National University.Google Scholar
Committee on Employment Opportunities (1993), Restoring Full Employment: A Discussion Paper, Australian Government Printing Service, Canberra, December. Department of Industrial Relations (1993), Submission to Committee on Employment Opportunites, September.Google Scholar
Fahrer, Jerome, Pease, Andrew (1993), “The Unemployment-Vacancies Relationship in Australia”, Reserve Bank Discussion Paper 9305, June.Google Scholar
Flatau, P., Lewis, P., Rushton, A. (1991), “The Macroeconomic Consequences of Long-Term Unemployment”, The Australian Economic Review (4).Google Scholar
Gregory, R. G., Daly, Ann (1990), “Can Economic Theory Explain Why Australian Women are so Well Paid Relative to their US Counterparts?”, CEPR Discussion paper No. 226, Australian National University.Google Scholar
Hughes, Barry (1987) “Immigration and the Australian Adult Beveridge Curve”, paper presented to a National Bureau of Economic Research Conference on Immigration Trade and Labor, Cambridge, Massachusetts, September.Google Scholar
Hughes, Barry (1992), “Trends and Cycles in Unemployment Gross Flows”, paper presented to the 1992 Australian Conference of Economists, University of Melbourne.Google Scholar
Hughes, Barry (1993), “Investing in Labour Market Efficiency”, an extended version of a speech to the Metal Trades Industry Association, Hyatt Hotel, Canberra, October.Google Scholar
INDECS (1992), State of Play 7, Allen and Unwin, Sydney.Google Scholar
Jackman, , Layard, R. (1991), “Does Long—term Unemployment Reduce a Person’s Chance of Finding a Job?”, Economica, Vol. 58 (229): 93–107.Google Scholar
Junankar, P. N. (1988), Very Long Term Unemployment”, Commission of the European Communities, Luxembourg.Google Scholar
Lewis, Donald E., Shorten, Brett (1992), “Career Interruptions Among Young Australian Men and Women”, in Gregory, R. G., Karmel, T. (eds), Youth in the Eighties: Research from the Australian Longitudinal Survey, Centre for Economic Policy Research, Australian National University: 224–240.Google Scholar
Mincer, Jacob (1988), “Job Training, Labor Turnover and Wage Growth”, National bureau of Economic research, Working Paper No. 2690, August.Google Scholar
Pitchford, J. D. (forthcoming), “The Phillips Curve”, in Bell, G., Hession, B. (eds), Readings in Economics, VCTA Publishing, Melbourne.Google Scholar
Rummery, S. L. (1992), The Contribution of Intermittent Labour Force participation to the Gender Wage Differential”, The Economic Record, Vol. 68 (203): 351–364.CrossRefGoogle Scholar
Rummery, S. L. (1993), Job Mobility and Wages, unfinished PhD Thesis, Australian National University.Google Scholar
Tan, Hong W., Chapman, Bruce, Petersen, Christine, Booth, Alison (1992), “Youth Training in the United States, Great Britain, and Australia”, in Ehrenberg, Ronald G. (ed), Research in Labor Economics Vol. 13, JAI Press: 63–100.Google Scholar
Totsch, Inge (1988), “Screening in Labour Markets with Heterogenous Workers”, in Cross, Rod (ed), Unemployment, Hysteresis and the Natural Rate Hypothesis, Basil Blackwell, London: 180–202.Google Scholar
Watts, M., Mitchell, W. F. (1988), “Australian Wage Inflation: Real Wage Resistance, Hysteresis, and Incomes Policy: 1968(3)–1987(3)”, Manchester School, Vol. LVIII(2) June: 142–164.Google Scholar
Williams, J. (1989), “A Single Girls’ Guide to Steady State Relationships”, Honours thesis, Australian National University.Google Scholar