Unemployment in Australia: Duration and Recurrent Spells*
*We acknowledge with thanks helpful discussions with several colleagues in the Faculty of Economics at Australian National University, especially with R. D. Terrell and N. M. Hung. We also thank Paul Paterson and an anonymous referee who have commented constructively on an earlier version. Mr R. Baker of the Australian Bureau of Statistics provided some unpublished data. Of course, we retain all responsibility for any errors. Financial support was provided by the Reserve Bank of Australia.
Abstract
Using a parametric technique. this paper estimates average completed duration of unemployment for several age and sex categories. It shows that the use of Labour Force Survey data leads to underestimates due to the presence of recurrent unemployment. When allowance is made, using A BS Persons Looking for Work and Labour Force Experience data, it is shown that new entrants to unemployment in 1981 could expect to remain unemployed for nearly six months. For teenagers evidence is presented to suggest that, contrary to current economic thought, teenagers may on average be unemployed for longer periods per spell and may have less experience of recurrent spells than their counterparts. It also shows that changes in the unemployment rate are dominated by changes in duration.
