We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
A Markov-switching structural vector autoregressive model of boom and bust in the Australian labour market.
- Authors
Gaston, Noel; Rajaguru, Gulasekaran
- Abstract
Major economic events, such as the global financial crisis, are episodes of identifiable duration that differ from other time periods. Using monthly data on the unemployment rate, labour force participation rate and employment for Australia for the period from 1978 to 2012, we estimate a Markov-switching SVAR model to examine the relationship between unemployment and labour force participation and the performance of the Australian labour market. Three distinct labour market regimes are identified. We find that the labour market switches between periods of low unemployment and high participation, prolonged periods of relative stability and short, sharp periods of high unemployment and low participation. A key finding is that, due to the behaviour of workers not in the labour force, the long-term effect of an upswing in labour hiring results in a lower unemployment rate and a lower labour force participation rate.
- Subjects
AUSTRALIA; UNEMPLOYMENT statistics; AUTOREGRESSION (Statistics); MARKOV processes; GLOBAL Financial Crisis, 2008-2009; LABOR supply; LABOR market
- Publication
Empirical Economics, 2015, Vol 49, Issue 4, p1271
- ISSN
0377-7332
- Publication type
Article
- DOI
10.1007/s00181-015-0920-4