Was there a skills shortage in Australia?

The paper analyses the problem of a skills shortage in Australia. It begins with an analysis of the operation of a labour market in terms of stocks and flows of labour services and human capital acquisition. It discusses the definition of a skills shortage, why it persists, and then looks at evidence from Australia, in particular, the resource rich states of Queensland and Western Australia over the past decade. It discusses possible employer responses to a skills shortage. Finally, it discusses whether the government should intervene, and if so what policies may help to relieve a skills shortage

The informal labour market in India : transitory or permanent employment for migrants?

The informal economy is a very important sector of the Indian economy. The National Council of Applied Economic Research estimates that the informal sector - "unorganised sector" - generates about 62% of GDP and provides for about 55% of total employment (ILO 2002, p. 14). This paper studies the characteristics of the workers in the informal economy and whether internal migrants treat this sector as a temporary location before moving on to the organised or formal sector to improve their lifetime income and living conditions. We limit our study to the Indian urban (non-agricultural) sector and study the characteristics of the household heads that belong to the informal sector (self-employed and informal wage workers) and the formal sector. We find that household heads that are less educated, come from poorer households, and/or are in lower social groups (castes and religions) are more likely to be in the informal sector. In addition, our results show strong evidence that the longer a rural migrant household head has been working in the urban sector, ceteris paribus, the more likely that individual has moved out of the informal wage sector. These results support the hypothesis that, for internal migrants, the informal wage labour market is a stepping stone to a better and more certain life in the formal sector

Unemployment in the OECD : Models and Mysteries

This paper compares models used to explain OECD unemployment. The models suggest that the ?natural rate of unemployment? has been driven up mainly by wage push factors. Panel data on twenty-two OECD countries are used to investigate the explanatory power of these models over the past two decades. Our estimates reveal that coefficients on key variables often turn out with signs which are at odds with the theories or are insignificant and that a second order autoregressive model performs nearly as well as all the other models. The conclusion offers some directions for future research

The global economic crisis: Long-term unemployment in the OECD

This paper analyses the impact of the global economic crisis on unemployment and long term unemployment in the OECD. It uses simple econometric models using panel data (quarterly) and time series data. In general, we find that long term unemployment increases with the unemployment rate, there is persistence in long term unemployment, and that the employment protection variable and the replacement rate are statistically insignificant. Overall, the findings of our research are that there are many differences between the impact of the Great Recession on different countries. Countries that faced a significant financial crisis and a collapse of the housing market bubble have had large increases in unemployment and long term unemployment. There was a big fall in employment in the (especially) construction and manufacturing industries. The financial collapse led to an increase in unemployment in the financial and business sector. As a result of these twin shocks labour mobility of the unemployed is likely to be affected: with negative equity in housing, unemployed workers are unlikely to move regionally. With a loss of wealth (in housing and financial assets, including superannuation) there will be a fall in consumer spending which will slow down the recovery of economies. This means that, especially for some countries, there will be a long period of high unemployment and long term unemployment

Are Asian Migrants Discriminated Against in the Labour Market? : A Case Study of Australia

This paper explores the issue of discrimination against Asian migrants in the Australian labour market using a unique panel data set, the Longitudinal Survey of Immigrants to Australia (LSIA). This paper estimates models of the probability of being unemployed for Asian and non-Asian migrants controlling for various characteristics including age, education, and English language ability. More importantly, we control for the visa status of the migrants. Our results suggest that there are significant ?unexplained differences? for males that may be ascribed to ?discrimination? against Asian migrants. However, the results for females are mixed: the evidence suggests that Asian females do worse than non-Asian females only in the first year after arrival

Antagonistic managers, careless workers and extraverted salespeople: an examination of personality in occupational choice

This paper is an econometric investigation of the choice of individuals between a number of occupation groupings utilising an extensive array of conditioning variables measuring a variety of aspects of individual heterogeneity. Whilst the model contains the main theory of occupational choice, human capital theory, it also tests dynasty hysteresis through parental status variables. The focus is an examination of the relationship between choice and personality with the inclusion of psychometrically derived personality variables. Occupational choice is modelled using multinomial logit estimation using the Household Income and Labour Dynamics in Australia (HILDA) survey data. Human capital variables are found to exhibit strong credentialism effects. Parental status has a small and limited effect on occupation outcomes indicative of only some small dynasty hysteresis. On the other hand, personality effects are found to be significant, relatively large and persistent across all occupations. Further, the strength of these personality effects are such that they can in many instances rival that of various education credentials. These personality effects include but are not limited to: managers being less agreeable and more antagonistic; labourers being less conscientiousness; and sales people being more extraverted

Occupational choice: personality matters

In modern societies, people are often classified as White Collar or Blue Collar workers: that classification not only informs social scientists about the kind of work that they do, but also about their social standing, their social interests, their family ties, and their approach to life in general. This analysis will examine the effect of an individual's psychometrically derived personality traits and status of their parents on the probability of attaining a white collar occupation over the baseline category of a blue collar occupation; controlling for human capital and other factors. The paper uses data from the Household Income and Labour Dynamics in Australia (HILDA) survey to estimate a random effects probit model to capture the effects on the probability of being in a white collar occupation. The results are then examined using the average marginal effects of the different conditioning variables over the whole sample. The analysis confirms the previous findings of human capital theory, but finds that personality and parental status also have significant effects on occupational outcomes. The results suggest that the magnitude of the average marginal effect of parental status is small and the effect of the personality trait conscientiousness is large and rivals that of education. Finally, estimates of separate models for males and females indicate that effects differ between the genders for key variables, with personality traits in females having a relatively larger effect on their occupational outcomes due to the diminished effects of education

Job Mobility along the Technological Ladder : A Case Study of Australia

Labour economists have been increasingly interested in the impact of technological change upon employment and unemployment. However, the predominant focus of empirical studies has been on employment and unemployment stocks, whereas technological change is more likely to affect the flows of labour. This paper focuses on the latter issue. In particular, given the technological change, two major questions posed in this paper are: (i) who moves from low-tech to high-tech jobs and who moves from high-tech to low-tech jobs, and (ii) what are the factors which drive such movements. The data used in this study are from the 1994 Australian Labour Mobility Survey. A new index describing the technological level of a job is constructed and the magnitude and direction of movements along the technological ladder are examined. Using individual-level socio-economic variables, we explain the determinants of the direction of the job change. Some relevant policy implications are also discussed

Was Working Nation Working?

After several months of research and consultation the previous Labor government introduced in May 1994 a set of labour market programs targeted at the long term unemployed with its publication of Working Nation. With the new Coalition government taking office in March 1996 we saw the end of Working Nation. Working Nation had a short life: it was born accompanied with a loud fanfare, it was buried quietly. Did Working Nation labour market programs lead to a fall in unemployment and a fall in long term unemployment? This paper attempts to evaluate its success using simple econometric methods on macroeconomic data. Our results suggest that although Working Nation had a very short life it succeeded in helping the long term unemployed: it was a very valuable social experiment which was aborted for political reasons. The Coalition government has apparently lost interest in the long term unemployed: there has been a massive cutback in expenditure on labour market programs and the only plans it has announced to date are the work for the dole scheme for long term unemployed young people. It is hoping that its industrial relations legislation will lead to a miraculous solution to the problem of unemployment and long term unemployment which has plagued most of the OECD economies for several years