Regional Economic Disparities in Australia

August 1, 2004

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Format: Chicago

Uma Ramakrishnan, and Martin D. Cerisola Regional Economic Disparities in Australia, (USA: International Monetary Fund, 2004) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Australia's remarkable economic performance during the 1990s has not resulted in a significant convergence of real per capita income, output, and employment levels across the country's states and territories. This paper explores the role of certain economic rigidities that may have contributed to the lack of convergence, including rigidities in labor markets and in the structure of federal government transfers to households and subnational governments. The analysis suggests that the wage awards system has restricted the adjustment of real wages to productivity differentials, thus contributing to higher unemployment rates in some states. Federal government transfers to households also appear to have adversely affected work incentives in high unemployment states by limiting participation in the labor force.

Subject: Income, Labor, Production growth, Unemployment, Unemployment rate

Keywords: Cross-state dispersion, Pay, State, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/144
Stock No:

WPIEA1442004
ISBN:

9781451856477
ISSN:

1018-5941

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