Labour Market Programs and the Australian Beveridge Curve: 1978 to 1996

Melbourne Institute Working Paper No. 25/97

Date: October 1997


Elizabeth Webster


Labour market programs are often advocated on the basis that by re-introducing unemployed people to the culture of the workplace, they will re-skill and motivate them enough to make them suitable employees to prospective employers. Accordingly total employment will rise and vacancy rates will fall. If successful, we should be able to detect a systematic relationship between labour market program expenditure and the distance of the Beveridge curve from the origin ceteris paribus. There are few studies in the world which have directly tired to assess the impact of labour market program expenditure on the Beveridge curve. Our estimates for Australia over the last 18 years do not support the view that labour market programs have moved the Beveridge curve inwards, that is there is no evidence that they lead to an expansion of aggregate employment.

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