## Australia: Selected Issues

_IMF Staff Country Reports, February 9, 2017_

## Source details

**Canonical URL:** [Australia: Selected Issues](https://www.imf.org/en/publications/cr/issues/2017/02/09/australia-selected-issues-44634)

## Other formats

- [Markdown version](/en/publications/cr/issues/2017/02/09/australia-selected-issues-44634/index.md)
- [Structured JSON version](/en/publications/cr/issues/2017/02/09/australia-selected-issues-44634/index.json)
- [Bundle manifest](/en/publications/cr/issues/2017/02/09/australia-selected-issues-44634/bundle-manifest.json)

## Bibliographic details
- Published: February 9, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475575842.002

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### Summary
- This Selected Issues paper examines the adjustment of Australian labor markets to the recent adverse shocks.
- Australia’s labor markets were not severely impacted by the global financial crisis and are adjusting smoothly to the sizeable commodity prices bust and mining investment downturn.
- However, some labor market indicators suggest persistent weaknesses.
- There does not appear to be a significant increase in structural employment in the wake of the commodity prices bust and mining investment decline.
- Increased flexibility in average hours per worker has likely moderated employment reduction in downturns and prevented a larger increase in unemployment in the wake of the mining investment downturn.
- At the same time, elevated underemployment signals additional slack, and is likely weighing down wage growth.

### Major themes and findings
- Adjustment dynamics of labor markets following commodity prices bust and mining investment downturn.
- Role of average hours per worker flexibility in moderating employment reductions.
- Evidence does not point to a significant increase in structural unemployment following the downturn.
- Elevated underemployment as an indicator of additional labor market slack.
- Implications for wage growth given persistent underemployment.

### Policy-relevant observations
- Monitoring underemployment is important for assessing labor market slack and its effect on wage growth.
- Labor market flexibility in hours worked has been a key buffer against larger rises in unemployment during the mining investment downturn.
- No explicit policy prescriptions are listed on the page, but the analysis highlights areas (underemployment, hours flexibility, structural employment) relevant for labor and macroeconomic policy.

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## Content in this bundle

- **Country Report**
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_Source: https://www.imf.org/en/publications/cr/issues/2017/02/09/australia-selected-issues-44634_