Unemployment : Economic Analysis and Policy Modelling

Unemployment is Australia's major economic and social problem. The Departments of Employment, Workplace Relations and Small Business, and of Family and Community Services, and the Productivity Commission, are all interested in unemployment reduction. These government partners and the Melbourne Institute have identified important gaps in modelling possible policy initiatives (e.g. wage restraint, changing work incentives), on the level and distribution of unemployment and the government's budget. The project will involve the development of five economic models to analyse the effect of such policy initiatives. The Treasury and the Reserve Bank will also provide advice to the project.

Fourteen research papers are planned. Together these will present important new evidence on the aggregate and distributional effects of different labour market policies in Australia. We would envisage all the papers being publishable in refereed journals and at least six of them being publishable either in one of the top three economics journals in Australia or in international journals of high repute.

From the perspective of outcomes for Australia, there will be a greatly improved understanding of the likely effects of a range of possible policies aimed at reducing unemployment.

The project is funded by the ARC SPIRT Grant, 2000-2001, Industry partners: Departments of Employment, Workplace Relations and Small Business, Department of Family and Community Services, Productivity Commission.