The Profile of Labour Force Discouragement in Australia

This study presents a time series analysis of the cyclical relationship between the labour force participation rate and the unemployment rate in Australia over the period 1979-1998. The Hodrick-Prescott filter is employed to extract the cyclical components of the series, which are used for the purposes of testing. This generates estimates more robust than in previous studies. At an aggregate level, the negative correlation between these variables has risen in magnitude over the sample period. Disaggregation of the data according to demographic categories shows greater discouragement among female workers, unmarried workers, Australian-born workers, students, workers with children, and workers in certain states and cities.