Labour Market Dynamics in Australia

type="main" xml:lang="en"> <title type="main">Abstract</title> <p>This article estimates a stylised search-and-matching model on data for Australia, covering the period 1978–2008. Using Bayesian methods, I find that the model does a fairly good job in replicating the data. Surprisingly, I find a large value for the worker's bargaining power and low vacancy-posting costs. The model generates a strong Beveridge curve and matches the standard deviations of all variables but vacancies. I identify technology and separation shocks to be the main drivers of fluctuations. </section>