Was there a Skills Shortage in Australia?

The paper analyses the problem of a "skills shortage" in Australia. It begins with an analysis of the operation of a labour market in terms of stocks and flows of labour services and human capital acquisition. It discusses the definition of a skills shortage, why it persists, and then looks at evidence from Australia, in particular, the resource rich states of Queensland and Western Australia over the past decade. It discusses possible employer responses to a skills shortage. Finally, it discusses whether the government should intervene, and if so what policies may help to relieve a skills shortage.skill shortages, wage adjustments, migrants

Do Migrants succeed in the Australian Labour Market? Furher Evidence on Job Quality

While the Coalition Government was in power in Australia from 1996 to 2007, new immigrants have had to face tougher selection criteria and increased financial pressure. Most studies so far have overlooked the issue of the quality of the jobs obtained by new immigrants to Australia and whether the policy change has contributed to improve or worsen job quality among immigrants and their ability to move upward. Job quality is thought to be related to the channels of information used by immigrants in their job search. Some studies suggest that jobs found via networks of same origin migrants are of lower quality. The aim of this paper is twofold. First, we investigate the effect of time since settlement on the ability of migrants to better their labour market outcomes. Second, we quantify the relationships between job quality and migrants’ job search methods and test whether they were affected by the policy changes. Using the Longitudinal Survey of Immigrants to Australia (LSIA), we estimate the probabilities for immigrants to find “good jobs”, controlling for their initial employability upon arrival in Australia. We test several models involving various definitions of “good job”, from objective conditions, based on the nature and status of the occupation, to more subjective conditions based on job satisfaction. We show that the sole effect of being a second cohort migrant is beneficial for the probability to both find a job and a “good job” within the first year and half after settlement. After this time, cohort two migrants who still have not found a good job experience more difficulty to improve. Moreover, informal channels of information on job prospects have been slightly more efficient in enabling second cohort migrants to find good jobs, even though they still provide individuals with a disadvantage compared to formal channels.migrants; job quality; immigration policy; migrant networks; bivariate probit

Do Migrants Get Good Jobs in Australia? The Role of Ethnic Networks in Job Search

We study the role of ethnic networks in migrants’ job search and the quality of jobs they find in the first years of settlement. We find that there are initial downward movements along the occupational ladder, followed by improvements. As a result of restrictions in welfare eligibility since 1997, we study whether this increases the probability that new migrants accept “bad jobs” quickly and then move onto better jobs over time. Holding employability constant, our results support this view. However, accounting for their higher employability, new migrants seem to fare better up to a year and half after settlement.immigration policy, job quality, migrants, ethnic networks

Antagonistic Managers, Careless Workers and Extraverted Salespeople: An Examination of Personality in Occupational Choice

This paper is an econometric investigation of the choice of individuals between a number of occupation groupings utilising an extensive array of conditioning variables measuring a variety of aspects of individual heterogeneity. Whilst the model contains the main theory of occupational choice, human capital theory, it also tests dynasty hysteresis through parental status variables. The focus is an examination of the relationship between choice and personality with the inclusion of psychometrically derived personality variables. Occupational choice is modelled using multinomial logit estimation using the Household Income and Labour Dynamics in Australia (HILDA) survey data. Human capital variables are found to exhibit strong credentialism effects. Parental status has a small and limited effect on occupation outcomes indicative of only some small dynasty hysteresis. On the other hand, personality effects are found to be significant, relatively large and persistent across all occupations. Further, the strength of these personality effects are such that they can in many instances rival that of various education credentials. These personality effects include but are not limited to: managers being less agreeable and more antagonistic; labourers being less conscientiousness; and sales people being more extraverted.occupational choice, personality traits, credentialism, dynasty hysteresis

On Measuring Uncertainty: Snakes and Ladders

The Global Crisis demonstrated to the world that Ratings Agencies had misled the public about the stability of financial institutions. The Finance literature had decided that it was impossible to have bubbles in financial markets and any surge in the stock market would be self-correcting. Recent papers have discussed the role of "uncertainty" and its measurement in influencing economic decisions. They attempt to measure uncertainty by indexes of volatility of the stock market, GDP, forecaster disagreement, mentions of uncertainty in news media, and the dispersion of productivity shocks to firms. Underlying their measures of uncertainty is the hypothesis that an increase in uncertainty leads to lower consumption by households and lower investment by firms, and hence leads to lower aggregate investment and growth. This paper argues that although risk can be measured, uncertainty cannot be measured. Even though risk can be measured, a simple symmetric measure (variance or standard deviation) is inappropriate because agents are loss averse and treat gains differently from losses. Although, it is clear that an increase in uncertainty worsens economic conditions, in this paper I shall also argue that this attempt at "measuring" risk or (fundamental) uncertainty is flawed

Australia: The Miracle Economy

Most of the countries of the OECD are still suffering from the Global Financial Crisis (GFC) (or as the Americans call it the Great Recession), but the Australian economy appears to be powering ahead. It is a miracle economy! Unlike most of the OECD countries, Australia did not even have a recession. In this paper we study the behaviour of the Australian economy compared to some of the OECD countries and see that, in fact, Australia has a miracle economy. The comparisons are made in terms of several macroeconomic indicators, GDP, Unemployment, Inflation, Current Account Balances, and debt

Was there a skills shortage in Australia?

The paper analyses the problem of a skills shortage in Australia. It begins with an analysis of the operation of a labour market in terms of stocks and flows of labour services and human capital acquisition. It discusses the definition of a skills shortage, why it persists, and then looks at evidence from Australia, in particular, the resource rich states of Queensland and Western Australia over the past decade. It discusses possible employer responses to a skills shortage. Finally, it discusses whether the government should intervene, and if so what policies may help to relieve a skills shortage

The informal labour market in India: Transitory or permanent employment for migrants?

This paper studies the characteristics of the workers in the informal economy and whether internal migrants treat this sector as a temporary location before moving on to the organised or formal sector to improve their lifetime income and living conditions. We limit our study to the Indian urban (non-agricultural) sector and study the characteristics of the household heads that belong to the informal sector (self-employed and informal wage workers) and the formal sector. We find that household heads that are less educated, come from poorer households, and/or are in lower social groups (castes and religions) are more likely to be in the informal sector. In addition, our results show strong evidence that the longer a rural migrant household head has been working in the urban areas, ceteris paribus, the more likely that individual has moved out of the informal wage sector. These results support the hypothesis that, for internal migrants, the informal wage labour market is a stepping stone to a secured life in the formal sector

Occupational Choice: Personality Matters

In modern societies, people are often classified as "White Collar" or "Blue Collar" workers: that classification not only informs social scientists about the kind of work that they do, but also about their social standing, their social interests, their family ties, and their approach to life in general. This analysis will examine the effect of an individual's psychometrically derived personality traits and status of their parents on the probability of attaining a white collar occupation over the baseline category of a blue collar occupation; controlling for human capital and other factors. The paper uses data from the Household Income and Labour Dynamics in Australia (HILDA) survey to estimate a random effects probit model to capture the effects on the probability of being in a white collar occupation. The results are then examined using the average marginal effects of the different conditioning variables over the whole sample. The analysis confirms the previous findings of human capital theory, but finds that personality and parental status also have significant effects on occupational outcomes. The results suggest that the magnitude of the average marginal effect of parental status is small and the effect of the personality trait "conscientiousness" is large and rivals that of education. Finally, estimates of separate models for males and females indicate that effects differ between the genders for key variables, with personality traits in females having a relatively larger effect on their occupational outcomes due to the diminished effects of education.occupational choice, personality, human capital, dynasty hysteresis

The Impact of the Global Financial Crisis on Youth Labour Markets

This paper investigates the impact of the GFC on youth unemployment and long term unemployment. In particular, we study whether the GFC had a bigger impact on youths than adults, and whether youth unemployment rates increased due to an increase in youth wages relative to adult wages. To anticipate our results, we find that the youth unemployment rates increased significantly more than that of adults even though youth wages had been falling relative to adult wages