IMF Working Papers

Regional Economic Disparities in Australia

By Uma Ramakrishnan, Martin D. Cerisola

August 1, 2004

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Uma Ramakrishnan, and Martin D. Cerisola Regional Economic Disparities in Australia, (USA: International Monetary Fund, 2004) accessed September 18, 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:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2004/144

  • Stock No:

    WPIEA1442004

  • ISBN:

    9781451856477

  • ISSN:

    1018-5941