The Relationship Between Unemployment and Unfilled Vacancies in Australia:1952–1978*

Abstract

This paper attempts to specify, estimate and test the stability of the Australian U‐V curve for the period 1952–78. After rejecting several simple functional forms of the relationship, a dynamic specification based on the separate works of E. S. Phelps and B. Hansen is adopted. This is found to fit the Australian data satisfactorily. Tests for the structural stability of the relationship over the period reveal the presence of two structural shifts. one during 1962 and the other during 1973. Preliminary investigation of possible causes of this instability points to increases in the read level of unemployment benefits and reductions in the assisted migrant intake over the period as significant contributing factors.