Transition probabilities between four labour market states (full-time employment, part-time employment, unemployment and inactive) for three age groups (the young, mature and old) are calculated using monthly gross flow data for Australia from October 1997 to May 2012. We determine the responses...

We estimate small open economy models with involuntary unemployment using Australian data from 1993 to 2007, focusing on hiring costs and real wage rigidity. We find a strong preference for models with hiring costs, which account for 0.97% of GDP. The data favor models with real over nominal...

Using a four-state model, we show that Australian labour markets became more flexible after 1980, but most gains occurred before 1993. We find that the responses of the transition probabilities to the phases of the business cycle are gender-dependent. For men, job-losing probabilities are...