Wages Drive Employment in Australian Manufacturing Sector, Output Plays Minor Role
The study looked at the relationships between employment, output, prices, and wages in the Australian manufacturing sector from 1975 to 1988. They found three long-term connections among these factors. Input prices were not part of these connections, and both input and output prices were not strongly linked to the equations. Short-term models showed that wages had a big impact on employment changes, while output had a smaller effect on employment in both short and long terms.