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Labor Market Disability: Implications for the Unemployment Rate

Published online by Cambridge University Press:  01 January 2023

George Argyrous  and
Megan Neale
Megan Neale
Affiliation:
School of Social Science and Policy, University of New South Wales
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Abstract

This paper investigates the extent to which unemployment, particularly among older males, is hidden by the welfare system. It is argued that the official unemployment rate has fallen because of a decline in participation rates among older males since 1972, and a significant proportion of these can be accounted for by the increase in the percentage of males receiving the Disability Support Pension and the Mature Age Allowance. These males are considered the Labor Market Disabled, since the principal cause of them being on welfare is the weakness of the labor market in which they have traditionally found employment. The unemployment rate is then reconsidered after including the LMD into the calculation, producing a more pronounced hysteresis affect over successive business cycles. It is argued that active job creation programs are required to move these people from welfare to work.

Type
Meeting Report
Information
The Economic and Labour Relations Review , Volume 12 , Issue 2 , December 2001 , pp. 263 - 284
Copyright
Copyright © The Author(s) 2001

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Footnotes

*

We would like to thank an anonymous referee, members of the University of Newcastle staff seminar, and the participants of the University of Western Sydney 7th National Conference on Unemployment, particularly Bruce Chapman, for helpful comments on an earlier draft.

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