Displacement Effects of Active Labour Market Policy: The Youth Labour Market in Finland

In 1994 the number of workers participating in active labour market programmes in Finland was 299,000. On average there where 125,000 workers in these programmes at any one time, the average length of participation in a programme being about 5 months. In relation to the 2.5 million-strong Finnish labour force, these figures are proportionally large. In 1994 the total expenditure on unemployment amounted to 6.7 per cent of GNP of which the share spent on active labour market programmes was about 25 per cent. The study investigates the displacement effects of active labour market programmes in the youth labour market in Finland. The two age groups analysed are 15-19-year-olds and 20-24-year-olds. The results, based on a VAR analysis of quarterly data from the period 1981.1-1995.2, suggest that the displacement effects of job-creation programmes may be substantial. The study cannot, however, provide any robust estimates of the likely size of such displacement effects on youth employment in Finland. This revised version was published online in July 2006 with corrections to the Cover Date.     

The Labour Market Effects of Vocational Education and Training in Australia

We provide estimates of the effects of completing a Vocational Education and Training (VET) qualification on individual labour market outcomes, particularly on the probability of employment and on earnings. Estimates are provided for 1997, 2001 and 2005. The estimation methodology is based on matched comparisons of persons at each level of VET qualification among Year 12 completers and non‐completers. We find that among Year 12 completers, there is little benefit from obtaining certificate level qualifications, but there are positive employment and earnings outcomes associated with obtaining diploma level qualifications. Among persons who did not complete Year 12, however, there are benefits from obtaining any kind of VET qualification, including the lower level Certificate I and II qualifications.     

Labour Market Deregulation in Australia: The slow combustion approach to workplace change

Since the beginning of the 1990s Australia has experienced a gradual but far-reaching process of labour market deregulation. Labour market deregulation has proceeded primarily through the dismantling of the distinctive system of awards-the main avenue of external, protective regulation in Australia for much of the 20th century. This paper examines labour market deregulation and its implications for the Australian workforce. It situates the changes in terms of their institutional starting point in the award system and the growing pressures in the 1980s for increased labour market flexibility. It argues that labour market deregulation is amplifying existing trends to growth in precarious employment, wage dispersion and the development of a low-pay sector amongst full-time employees. In addition, it is sponsoring a significant fragmentation of working-time arrangements.     

Until the End of Time: Labour Market Reform in Australia

While it is widely acknowledged that labour market reform is a necessary ingredient of the strategy to make the Australian economy world-competitive, there are divergent views on what the nature of the reform process should be. The changes being currently implemented and mooted may not provide the basis for strong productivity growth; holistic enterprise bargaining and voluntarist labour market arrangements are required.     

Labour Utilization and Wage Inflation in Australia: An Empirical Examination*

This paper tests the hypothesis that the level of labour utilization within the firm should be substituted into the Phillips Curve in place of traditional measures of excess demand. Gregory and Smith (1983) proposed overtime hours as a proxy for labour utilization within the firm. For various reasons we prefer the deviation from trend in hours worked. The results support the underlying hypothesis, and add strength to the view that to understand the process of wage inflation at the macro level we must examine the utilization of labour at the micro level of the firm.     

Sex Discrimination and Occupational Segregation in the Australian Labour Market*

This paper explores the implications of the difference between the occupational distribution for males and females in a joint model determining earnings and occupation. The male/female wage differential is evaluated for a number of broad occupational classifications. This is followed by an evaluation of the role and relative importance of inter-occupational and intra-occupational effects as contributors to the overall male/female wage differential The main conclusion following from the econometric results is that intra-occupational effects dominate Thus, policies which attempt to address the gender wage differential by re-allocation of labour across occupations are unlikely to solve the problem.     

Occupational Prestige and Labour Market Behaviour in Papua New Guinea*

‘Underdevelopment economics is a vastly important subject, but it is not a formal or theoretical subject. It is a practical subject which must expect to call upon any branch of theory (including non-economic, for instance, sociological, theory) which has any relevance to it’ [17].     

Family Income and Wealth,Youth Unemployment and Active Labour Market Policies

This paper studies some features of unemployment in Italy using cross section individual micro data. Since unemployment is particularly harsh with respect to youths, interest is focused on 15-29-year-old youngsters. The analysis is carried out using standard logit models and the results show that personal and family characteristics play an essential role in shaping youth activity and unemployment rates of short and long duration, together with product market conditions and labour market features. In particular, the income effect seems relevant for participation decisions, while the family wealth helps in reducing youth unemployment. Various policy instruments might be able to reduce youth unemployment, especially if these instruments are targeted through means-testing on family income and wealth and through a proper distinction between the first job seekers and the strictly unemployed.     

The Labour Market and Inequality

Newspoll reported in 2000 that by a margin of 70 to 28 per cent, Australians would prefer the gap between rich and poor to get smaller rather than have the nation's overall wealth grow as quickly as possible. This article examines the reasons for the increase in the dispersion of earnings, and changes in unemployment and workforce participation, which are central to this concern about inequality. The major finding is that the widening dispersion of earnings and changes in labour force status are principally due to changes in the structure of labour demand in favour of more skilled jobs. The article then considers what this changing job mix implies for policy directed to maintaining income inequality.     

Open Market Operations in Australia: A US Perspective*

This paper investigates open market operations in Australia and incorporates some key features of these operations into a simple rational expectations macroeconomic model Where relevant, comparisons with US operating procedures are made. The major finding is that the Reserve Bank of Australia like the Federal Reserve uses the overnight interest rate as its policy instrument However, specific features of the Australian money market imply that direct control of the interest rate will be a more efficient policy in Australia than in the United States.     

Wage Adjustments and Labour Market Systems: A Cross-Country Analysis*

Evidence is presented on how well alternative systems of wage determination facilitate disaggregate labour market adjustment. Tests of statistical causality are used to relate labour market pressure to relative wage changes. The conclusion is that rates of change of relative wages are determined independently of the microeconomic market balance. This result holds irrespective of the institutional form of the wage-fixing system.     

Youth Unemployment in Australia

This article was prepared by Larry D. Singell, Professor of Economics, University of Colorado, Boulder. In 1982 the author was Visiting Fellow at te University of Melbourne. Profess Singell wishes to thank Dr J. P. Nieuwenhuysen, Dr P. Stricker, and the anonymous referees of the Australian Economic Review for their very useful comments. The autor takes full responsibility for any remaining short-comings.     

The Role of Education vis-a-vis Job Experience in Explaining the Transitions to Employment in the Spanish Youth Labour Market

It is well known that young cohorts experience higher unemployment rates than their adult counterparts. However, it is less well known that more educated young cohorts may face higher unemployment rates than less educated ones. This seems to be the evidence in some OECD countries such as Spain and Italy. We use data on the Spanish labour market and estimate a duration model for young unemployed people. University graduates’ lack of job experience may explain this puzzling observation.     

Subsidised Training and Youth Employment: Distinguishing Unobserved Heterogeneity from State Dependence in Labour Market Histories

Using the 1990–2 wave of the French Labour Force Survey to study the employment histories of young people I consider transitions between six labour market states: employment contracts whether permanent or temporary, unemployment, training, education and non-participation. I use a fixed effect estimator in a dynamic multinomial logit model which can accommodate any form of unobserved heterogeneity in levels. This analysis can be extended to Markov processes of any order. I relate heterogeneity components to individual and family characteristics by using simulated maximum likelihood methods. These procedures allow evaluation of the effects training schemes have on youth employment histories.