La Trobe University

Does Encouragement Differ From Discouragement? A Study of Asymmetry in the Australian Labour Force

Email address: llenten@latrobe.edu.au

JEL Classifications: C22, E24

Abstract:
In this study, a time series analysis of the relationship over the business cycle between labour force participation and unemployment in Australia is presented using the sample period extending from 1978Q1-2000Q4, with the purpose of testing for the presence of asymmetry. Seasonal adjustment of the variables is performed using the method outlined by Harvey (1989), and the seasonally adjusted data is then detrended using the HP filter. The remaining cyclical components of the series are then utilised for the purposes of testing, producing estimates far more robust than those in antecedent studies. It is found that there is no presence of asymmetry in most cases, in complete contrast to other similar recent studies using Australian data. The only exception to this finding is the detection of the presence of asymmetry for males in the deepness type test.

PDF file of paper: lenten.pdf

Session: Empirical Analyses of Business Cycles

Time: Friday, 6 July, 3:30pm - 5pm

Room: B