National Bureau of Economic Research

Question: Discuss about the National Bureau of Economic Research. Answer: Introduction The Australian definition of unemployment mostly encompasses all individuals who are over the age of 15 and have not undertaken any paid job in the survey week. On the other hand, long-term unemployment refers to those who are unemployed for more than 52 weeks. The major cause that led to high rate of unemployment is Australia is the Great Depression that took place almost 12 years ago (Myles et al., 2016). Measurement of unemployment:- Unemployment mostly takes place when an individual is without job and is actively looking for employment. The US Bureau of Labor Statistics computes employment and unemployment for those over the age of 16. The labor force survey makes use of two different measurements in order to measure the rate of unemployment. The Current Population Survey (CPS): It is also termed as the household survey that is based on a sample of 60,000 households. The unemployment rate that is based on the ILO definition is measured with the help of this survey (Kaplan Schulhofer-Wohl, 2012). The Current Employment Statistics Survey (CES): It is also termed as the payroll survey that is based on a sample of 160,000 trades (Claxton et al., 2013). On the other hand, the US Bureau of Labor Statistics makes the use of six measurements in order to calculate unemployment. U1: This indicates the percentage of labor force unemployed for 15 weeks or for a longer period. U2: This indicates the percentage of labor force who lost their work U3: This is the official unemployment rate that takes place when an individual are without jobs and are actively searching for work (Antenucci et al., 2014). U4: U3 plus the percentage of dejected workers, who consider that there is no job accessible for them and have stopped searching for the job U5: This indicates the individuals described in U4 + the percentage of marginally attached workers who are not engrossed in working U6: This indicates the individuals described in U5 along with part-time employees who want to work as full-timers however; are mainly underemployed. The causes of unemployment in the Australian Economy There are several causes that leads to unemployment in the Australian economy and as a result, the country has been undergoing from the constant increase in the rate of unemployment. Governmental policies: There are various governmental policies that have been implemented in order to reduce the rate of unemployment in Australia. Despite, all this the rate of unemployment is still in an augmenting mode. As per the reports, in the last 20 years there has been no improvement in the employment rate on Australia mostly due to growth in effective skilled employees (Milner, Morrell LaMontagne, 2014). Decrease in Labor demand: The demand for labor in Australia has been decreasing drastically mostly due to the changes in technology. The adaptation of more capital-intensive technology had also led to decrease in the labor for demand. There are various global factors also which are accountable for the decrease in labor demand in Australia, such as fall in import, competition faced by the skilled labor of south-east Asia as well as monetary deregulation (Marchand Weber, 2016). Underemployment There are mostly two forms of underemployment that are recognized in the present global standards. The first one is the time-related underemployment that reflects inadequate hours of work in relation to a different employment circumstances that an individual is desiring to engage in. The second one is insufficient employment circumstances that refer to those in employment who want to alter their work activities. The reason that leads to underemployment includes inadequate use of skills as well as insufficient wages and excessive labor hours. ABS measurement of underemployment is restricted to time-related underemployment. An individual who is engaged in time-related underemployment comprises all employed workers who fulfil the following criteria (Blustein, Kozan Connors-Kellgren, 2013). Eager to work for additional hours: This indicates that an individual is eager to get another job in addition to their present job in order to raise their hours of work. This also indicates the replacement off any of their present jobs with another job with raised hours of work. According to the ABS structure, eager to work for additional hours is tested by asking part-time employees whether they desire to work for extra hours. Available to work additional hours: It takes place when an individual is ready within a specific succeeding period in order to work for additional hours if they are given the opportunity to work for additional hours. According to the ABS structure, availability to work additional hours is concluded both in terms of instant availability and in terms of availability within the subsequent four weeks. The ABS underemployment structure is mostly based on the separation of employed individuals into two mutual groups: Employees who are considered to be fully employed. In other words, people who worked full-time during the reference week. Employees who are not completely employed. This comprises part-time workers who desire to work for more hours (Li, Duncan Miranti, 2013). Unemployment varies from region to region in Australia The rate of unemployment varies in Australia from region to region. The rate of unemployment is higher in the under-privileged areas as compared to the capital cities. The reasons behind the differences of unemployment from region to region in Australian economy are as follows: Employment opportunities in mining states compared to non-mining states: Most of the people in Australia prefer to work in mining states due to huge employment opportunities. As a result, it leads to decline in the employment rate in the agricultural sectors of Australia. The advancement in technology and capital-intensive machines leads to decline in the employment rate in agricultural and other non-mining sectors. Hence, the unemployment rate is higher in non-mining sectors as compared to mining sectors (Hicks, Basu Sherley, 2014). Difference in population expansion: In the coastal region of Australia, the growth rate of population is larger than the growth rate of population in the main land. As a result, the rate of unemployment is also higher in the main land as compared to the rate in coastal region. Lack of capital in native areas of Australia: There is a lack of job prospects in the native areas of Australia due to lack of capital as well as backward infrastructure. This had led to high rates of unemployment in the native areas as compared to the developed areas. Effect of government regulation on inefficiencies in the Australian labor market As per the reports, the labor market in Australia is more efficient as compared with other labor markets in other OECD countries. The graph shows the demand curve for labor that is indicated by DLDL curve whereas, supply curve for labor is indicated by SLSL curve. The rate of equilibrium wage was at W0 before the government regulation took place. However, the equilibrium wage increased to W due to government regulation policy. Due to the depression and technological improvement, the workers were less interested to utilize the preceding amount of labor at this higher wage rate. Hence, at this higher level of the wage rate, the government will now employ the lower amount of labor, suppose L. As a result, there will be a surplus supply of labor amounting MN, which leads to increase in unemployment rate. This in turn leads to inefficiencies in the Australian labor market. Critically analyze the Australian government policies to decrease unemployment Critical to accomplish low level of unemployment are stable and well-tuned macroeconomic approaches. Several reforms have been designed in order to improve the competitiveness of the Australian economy both globally and domestically. Labor policy that was introduced by the government to foster productivity as well as lower unemployment. These reforms were mostly implemented to address several disadvantages that many people face in the labor market. However, the policies led to increase in the rate of unemployment rather than decreasing it as the policies generated surplus workers. This in turn leads to further inequality as well as lower productivity among the workers rather than diminishing the source of unemployment. The reforms were extremely diverse as well as broad based however; the reforms had less scope to bring further profit in productivity and overall wellbeing. The increasing incompetence in Australian labor market indicated that improvements in the technological willingn ess relative to other countries had no impact in improving the overall competitiveness in Australia (Halevi et al., 2015). Conclusion It can be concluded that the policies by the government led to increase in the rate of unemployment rather than decreasing it as the policies generated surplus workers. It can also be concluded that the reason that leads to underemployment includes inadequate use of skills as well as insufficient wages and excessive labor hours. References Antenucci, D., Cafarella, M., Levenstein, M., R, C., Shapiro, M. D. (2014). Using social media to measure labor market flows (No. w20010). National Bureau of Economic Research. Blustein, D. L., Kozan, S., Connors-Kellgren, A. (2013). Unemployment and underemployment: A narrative analysis about loss. Journal of Vocational Behavior, 82(3), 256-265. Claxton, G., Rae, M., Panchal, N., Damico, A., Whitmore, H., Bostick, N., Kenward, K. (2013). Health benefits in 2013: moderate premium increases in employer-sponsored plans. Health Affairs, 32(9), 1667-1676. Halevi, J., Harcourt, G. C., Kriesler, P., Nevile, J. (2015). Post-Keynesian Essays from Down Under Volume II: Essays on Policy and Applied Economics: Theory and Policy in an Historical Context (Vol. 2). Palgrave Macmillan. Hicks, J., Basu, P. K., Sherley, C. (2014). The impact of employment specialisation on regional labour market outcomes in Australia. Australian Bulletin of Labour, 40(1), 68. Kaplan, G., Schulhofer-Wohl, S. (2012). Interstate migration has fallen less than you think: Consequences of hot deck imputation in the Current Population Survey. Demography, 49(3), 1061-1074. Li, J., Duncan, A., Miranti, R. (2013). Underemployment among mature age workers in Australia. Marchand, J., Weber, J. G. (2016). Local Labor Markets and Natural Resources: A Synthesis of the Literature. Milner, A., Morrell, S., LaMontagne, A. D. (2014). Economically inactive, unemployed and employed suicides in Australia by age and sex over a 10-year period: what was the impact of the 2007 economic recession?. International journal of epidemiology, dyu148. Myles, N., Large, M., Myles, H., Adams, R., Liu, D., Galletly, C. (2016). Australias economic transition, unemployment, suicide and mental health needs. Australian and New Zealand journal of psychiatry, 0004867416675035. Unemployment disparity across regions | The Treasury. (2016). Treasury.gov.au. Retrieved 12 December 2016, from https://www.treasury.gov.au/PublicationsAndMedia/Publications/2012/Economic-Roundup-Issue-2/Report/Unemployment-disparity-across-regions