The Sources of Unemployment: A Simple Econometric Analysis

Valentine, Tom

doi:10.1111/j.1759-3441.1993.tb00897.x

Cited by 13 publications

(11 citation statements)

References 3 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Year 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 UR UR* UR** Unemployment 1980 to 2001 Table A.2 presents an econometric model of the unemployment rate for the period 1980 to 2001. It describes how unemployment reacted to wage changes over that period and the large initial wages overhang that had been created in the nineteen seventies and is similar to the model used in Valentine (1993). The model includes an equation explaining profits (gross operating surplus) so that the impact of wage changes on different components of GDP can be taken into account.…”

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

Real Wages and Unemployment: State of the Debate

Valentine¹

2004

Self Cite

View full text Add to dashboard Cite

he question of the impact of real wages on employment and unemployment continues to be contentious. A recent example is Bell (2000) in which a number of the essays touch on this question and related policy issues. Unfortunately, many of the essays use questionable arguments to sidestep the question altogether and this approach is consistent with a major strand in the Australian academic literature on unemployment. Therefore, it would be useful to restate the terms of this debate so that the arguments can be embedded in an appropriate framework. The second part of this paper attempts that task.The third section of the paper examines two examples of sustained high unemployment rates that occurred in Australia in the twentieth century. In both cases, the high unemployment rate resulted from an attempt to improve the income distribution by increasing wage rates. An econometric analysis presented in the Appendix examines the role of high real wages in these experiences. In both cases the focus is on how the economy reacted to a real wage shock, that is, a sharp increase in real wages.

show abstract

Section: Resultsmentioning

confidence: 99%

“…Moreover, the return on capital remains constant. As Valentine (1993) points out this may reduce the incentive for investment (which would increase national income and therefore reduce the unemployment rate) relative to the situation that would exist if wages were market determined.…”

Section: The Debatementioning

confidence: 99%

Real Wages and Unemployment: State of the Debate

Valentine¹

2004

Self Cite

View full text Add to dashboard Cite

show abstract

“…Study of the determinants of the aggregate rate of unemployment has followed several distinct paths. Valentine (1993) and Trivedi and Baker (1985), for example, attempt to model the unemployment series itself. Hence, variations in the unemployment rate are related to variables for the cost of labour, real output, real unemployment benefits, structural change and demographic factors, and various adjustment variables (such as lagged dependent variables).…”

Section: Unemploymentmentioning

confidence: 99%

Australia's Unemployment Problem

Miller

2000

Economic Record

View full text Add to dashboard Cite

A number of Australian studies have provided microeconomic and macroeconomic perspectives on the causes of, and solutions to, Australia's unemployment problem. This paper provides an evaluation of these studies. Several important findings can be noted. First, from the cross‐sectional studies economists have gained a good understanding of the factors contributing to a high probability of unemployment. Effective use is currently being made of this information. Second, there is general consensus from the time‐series studies regarding the estimates of the aggregate labour demand wage and output elasticities. In addition, it has been widely acknowledged that lower real wages and economic growth would help reduce the high rate of unemployment. Despite the information available we are making slow progress towards reducing the unemployment rate. This may be due to political reasons or because we are unsure of how to deliver the wage cuts and faster rates of economic growth presented as solutions to the unemployment problem.

show abstract

“…The mid 1970s witnessed a sharp jump in unemployment from 2 per cent to 6 per cent. Much of the jump can be attributed to a 10 per cent increase in real labour costs, mostly wages but also extra leave provisions and higher payroll taxes (Pissarides 1991; Lewis & Kirby 1988;Russell & Tease 1991;Valentine 1993;Stacey & Downes 1995). Different causes have been given for the labour cost increase, including higher taxes and unemployment benefits.…”

Section: The Causes Of the Long-run Rise In Unemployment Since The 1960smentioning

confidence: 99%