Monday, March 26, 2012

State finances & labour market flexibility

Henry Ergas has a column in today's Australian on Queensland's finances. That is paywalled but Henry's blog with notes on the column isn't. There are some interesting comments and links, however what caught my attention as something different were his comments on Queenslands  regional  labour market.









Labour market performance: As I note in the column, Queensland’s labour market seems less flexible than that in other states, with larger, more persistent variations in unemployment rates between regions. Here is the cross-sectional variance of unemployment rates for each State and Territory, unadjusted for labour force size, for December 2010 to December 2011, using data sourced from http://www.deewr.gov.au/lmip/default.aspx?LMIP/SALM.
I'm not on top of the data or stats to be able to comment here but perhaps something deserving of further research. The data from DEEWR is quarterly unemployment with a break down into smaller sub-regional areas.  Queensland Economy Watch has recently commented on the volatility of our monthly data so i'm not sure on reliability of sub-regional  data, albeit quarterly, or what has been used here? The timeframe of the data series used here is also rather short.

Back in 2007 Ergas was posting at Statewatch, a website funded by the Menzies Centre at a time when the Howard Guvmint was faced with wall-to-wall state ALP guvmints. He now sometimes posts at the right wing libertarian Catallaxy blog where the war on keynesianism is in full swing. Times change, eh!





1 comment:

  1. KS, thanks for this post. Ergas's observation is interesting. His finding may have something to do with Qld's population being more dispersed than other States, with proportionately fewer people living in the capital city and more in regional and rural areas, where unemployment tends to be lower. For example, the unemployment rate in Darling Downs-South West always tends to be low (e.g. 3-4%) because young people who can't get a job there move to Brisbane. Given the significant difference in unemployment rates between rural areas and Brisbane, this could mean a greater variation in unemployment rates in Qld than other States. This is just a rough guess and I'll try to find time to investigate in more detail.

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