EMPLOYMENT AND POPULATION ADJUSTMENT IN RURAL AUSTRALIA. Anne Margaret Garnett

Transcription

1 EMPLOYMENT AND POPULATION ADJUSTMENT IN RURAL AUSTRALIA Anne Margaret Garnett A thesis submitted for the degree of Doctor of Philosophy The University of Canberra Canberra April 2007

2 ABSTRACT Rural regions in Australia have been, and continue to be, distinguished by very different population and labour market characteristics than those of more urbanised areas. Since the 1980s, rural regions have been exposed to a range of economic events and policies which has impacted on the structure and composition of the population and the labour force. These changes include trade liberalisation and globalisation, deregulation, declining numbers of agricultural establishments, advances in technology, increases in productivity and changes in the levels of public and private provision of goods and services. In addition, in recent years, serious shortages of labour, particularly skilled labour, has emerged as a major issue facing rural regions. However, there has been little economic research into rural labour markets relative to other labour markets, particularly since the 1980s. While there has been significant public discussion and political debate in recent years on the apparent changes experienced by rural regions, evidence regarding the nature, causes and impacts of these changes has often been anecdotal. For example, there is the popular notion of the tree change which refers to the idea that people are leaving metropolitan areas and moving to rural areas. Concurrently, there is also the significant discussion on the rural downturn, which refers to the belief that rural regions are declining in term of population and employment growth. Further, the agricultural sector has continued to be cited as the likely cause for downturns in rural population and employment growth rates in rural areas. However, again, there is a lack of economic research to substantiate these claims. i

3 The aim of this thesis is to redress the lack of economic research and to provide a comprehensive analysis of rural labour markets and population in Australia since the 1980s. Analysis focuses on the changing structure and composition of rural labour markets and the impact of population shifts on rural localities. Evidence is provided on the extent to which two decades of significant structural, technological and regulatory change have impacted on rural labour markets in Australia. This then provides a sound basis for the policy discussion in this thesis on population and labour market changes in rural Australia and the causes and implications of these changes. ii

4 Acknowledgements I would like to express my sincere thanks to my supervisor, Professor Phil Lewis, for his dedicated supervision and thoughtful guidance. His encouragement and support have been invaluable. I would also like to thank my family, friends, and God for their continual support. iv

5 Table of Contents Abstract Acknowledgements List of Figures and Tables i v ix Chapter 1 Introduction 1.1 Background Aim Method 3 Chapter 2 Defining and Quantifying Rural Australia 2.1 Introduction Defining and Quantifying Rural Australia The Social Dimension Geographical Location and Industrial Base Research Purpose Measuring Rural Australia: Methods of Regional Classification Rural, Remote and Metropolitan Areas Classification Griffith Service Access Frame Accessibility/Remoteness Index of Australia (ARIA) Section of State Structure ABS Remoteness Structure Productivity Commission Classification Small Area Labour Market Classification Australian Classification of Local Governments Australian Bureau of Agricultural and Resource Economics Classification Medical Classifications Comparison of Classifications Characterising Features of Rural Regions Measuring Rural Regions 30 Chapter 3 Population and the Labour Market in Rural Australia 3.1 Introduction Rural Population and Labour Markets Population and Labour Force Employment Status 35 v

6 3.2.3 Employment by Industry Changes in Rural Population and the Labour Market Population Change Employment Change Unemployment Rates Participation Rates Population and Labour Market Changes, Changes in Employment by Industry Changes in the Age Profile Distribution of Population by Age Regional Population by Age Group Educational Attainment Education Levels by Region Indigenous Education Levels by Region Distinctiveness of Rural Labour Markets 68 Chapter 4 The Agricultural Labour Market 4.1 Introduction The Importance of Agriculture Regional Multipliers Multiplier Estimates Agricultural Labour Markets Over Time Total Employment The Structure and Composition of Employment Off-Farm Income Modelling Labour Demand Labour Demand Models Previous Models A Model of Labour Demand Estimated Results for Labour Demand Discussion of Results Growth in Labour Intensive Industries Technological Change Conclusion 108 Chapter 5 Factors Affecting Rural Population 5.1 Introduction 110 vi

7 5.2 Fertility, Mortality, and International Migration Fertility Rates Mortality Rates International Migration Net Migration Flows Regional Net Migration Origins and Destinations of People Moving Previous Studies Non-Econometrics Studies Econometrics Studies The Model Variables Variable Definitions Results Coastal Regions Inland Regions Remote Regions Discussion of Results Coastal Regions Inland Regions Remote Regions Conclusion 159 Chapter 6 Rural Labour Market Policy 6.1 Introduction Measurement Issues Employment and Unemployment Unemployment Employment Growth Participation Rates Skills Shortages Addressing the Skills Shortage National Skills Shortage Policy Seasonal Labour Shortages Reasons for Seasonal Labour Shortages Policy to Address Seasonal Labour Shortages Labour Market Programs Community Development Employment Project 189 vii

8 6.6.2 Regional Partnerships Program Evaluation Education and Training Internal Migration Government Services and Policy Reforms Negative Externalities Current Rural Policy Microeconomic Reform Trade Liberalisation Deregulation of Marketing Authorities Infrastructure Reform Net Effects of Microeconomic Reform Conclusion 210 Chapter 7 Conclusion 7.1 Distinguishing Features of Rural Labour Markets The Role of Agriculture Interregional Migration Policy Issues Conclusion 219 References 220 viii

9 List of Tables and Figures Tables 2.1 Comparisons of Regional Classifications, Australia Population and Labour Force, 2001, per cent Population and Workforce by Status and Gender by Community Size, Employment by Industry, 2001, per cent Regional Population Growth, ; ; , per cent Regional Population Change, , per cent Regional Employment Growth, and , per cent Regional Unemployment Rates, , per cent Regional Labour Force Participation Rates, , per cent Annual Increase in Population, Labour Force and Employment, by Community Size, Employment by Industry, 1991, 1996, 2001, per cent Population Age Distribution by Regional Classification, 1991, 1996, 2001, per cent Age Distribution by Age Group for each Regional Classification, 1991, 1996, 2001, per cent Regional Educational Attainment by Highest Educational Qualification, 2001, per cent Indigenous and Total Regional Population by Highest Educational Qualification, 2001, per cent Composition of Agricultural Employment by Employment Status and gender, Australia, Wage Elasticities of Demand for Labour Fertility Rates, and , Australia Net Migration by regional Classification, Australia, and Origins and Destinations of Regional Migration, Australia, Origins and Destinations of Regional Migration, Australia, Estimated Coefficients, Coastal Regions, and Estimated Coefficients, Inland Regions, and Estimated Coefficients, Remote Regions, and ix

10 Figures 4.1 Total Employment in Agriculture, Composition of Employment, Australia, Agricultural establishments, Australia, 1960/61 to 2002/ Off-Farm Income as a Percentage of Total Family Income, Employment in Horticulture and Fruit Growing, (000s) Employment in Grain, Sheep and Beef, (000s) 106 x