OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

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Job displacement in Australia

Evidence from the HILDA survey

Australia has a dynamic labour market with high job turnover. According to the HILDA Survey data, about one-fifth of all employees separate from their job every year, and about one fifth of those are displaced workers - laid off for economic reasons. Using multivariate probit regression we find that men, older workers and workers with less than secondary education tend to be displaced more often. In certain industries, such as construction and manufacturing, the incidence of displacement has been higher over the last fifteen years. Workers with lower tenure and casual employees also face a higher probability of displacement. However, a very high proportion - close to 80% percent - of displaced workers find a new job within two years. Among certain groups of workers, the share finding new employment is significantly lower: women, older workers, and less educated workers, workers who had a casual job and part-time workers. However, not all groups search for a job after being displaced. We find evidence that women, older workers and workers in low-skilled occupations are quite likely to exit the labour force following displacement.


Keywords: Australia, HILDA, labour market, displaced workers, household panel
JEL: J6: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers; J3: Labor and Demographic Economics / Wages, Compensation, and Labor Costs; J2: Labor and Demographic Economics / Demand and Supply of Labor
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