Opening Remarks - Inaugural Asian and Australasian Society of Labour Economics Conference

Opening Remarks - Inaugural Asian and Australasian Society of Labour Economics Conference

PM&C Who We Are The Secretary
Thursday, 07 December 2017

Dr Martin Parkinson AC PSM

Martin Parkinson.

Let me first acknowledge the traditional owners of the land on which we meet: the Ngunnawal people, and their elders past and present. I pay my respects to them and to all Aboriginal and Torres Strait Islander people here today.

Thank you to the organisers of this inaugural Asian and Australasian Society of Labour Economics Conference – and a special thank you to Bob Gregory for inviting me to speak.

It’s my pleasure to be with you today to launch this great initiative, and to be present at the largest gathering of economists in Australia this year.

As the old joke goes, ask two economists a question and you get three different answers. What happens if you ask 300 economists? Well, we’ll find out soon. 

We have an incredible line-up of speakers.

When I look around this room I see so many familiar faces, including from alma maters, the Australian National University and from Princeton.

This Conference will no doubt develop into an important academic and policy network in our part of the world, providing an invaluable forum to discuss major economic issues in our region.

The launch of this Society is well timed.

We live in the fastest growing region of the world.

Larry Summers recently pointed out that before the industrial revolution, it took thousands of years to improve living standards by even 75 per cent. [1] This accelerated to around 50 per cent over a lifetime during the industrial revolution.

In our own time, such improvements can materialise within a few years. 

China experienced 50 per cent growth of per capita income in just seven years ¾ from 1990 to 1997, and then again from 2001 to 08. [2] And China was not the only country in Asia to experience such rapid growth.

Yet this growth has been so quick that the links and institutions that help bind the rest of the world are often less prominent here.

This conference is exactly the kind of binding this region needs.

I was drawn to economics, as a 15 or 16-year-old school boy, because it helped answer big questions — like why are some people poor and some people rich.

Labour economics is central to these questions, and many others.

Today, let me put a few questions to you.

The first question has been an important theme in my professional life: how can we improve the lives of women in our society?

How women engage in the economy, particularly in the workforce, is a large part of that.

We know removing barriers to female participation in the economy will make us richer. It empowers women and benefits their families.

Some officers in my department have been doing some empirical work recently on the workforce participation of women in the Indo-Pacific region. [3]

This research shows a slow but steady rise in the participation ratio of females to males — up from 67 per cent at the turn of the century to nearly 71 per cent by 2016.

Good news so far. The picture becomes more interesting when we look closer.

In low-income countries — where people on average earn less than around $US1,000 a year — women work as much as 85 per cent as men.

In high-income countries, it’s lower, at 75 per cent. And it’s lowest in middle-income countries, at 65 per cent.

But if the high rate of female workforce participation in very low income countries appears driven by necessity, perhaps by desperation unimaginable to many of us, then what does labour economics tell us about how they can improve their lives?

And what does it tell us about opportunities for women in middle and high-income countries?

For example, OECD statistics highlight a correlation between a lower gender gap in unpaid caring work done by women and men and higher rates of women’s workforce participation. [4] Have we got this right?

Well, I reckon most women in this room could give you a pretty quick answer to that one.

Another big question for labour economists is to understand the impact of the technological revolution on labour markets — on the work we do, under what terms, and for what pay. And what impact will this have on unemployment, and on income and wealth inequality.

This is a topic of more conjecture than real analysis. For all the talk of a barbelled labour market and fears jobs will be transient at best, redundant at worst, the truth in Australia is:

  • We are generating almost 7,000 net new jobs a week. [5]
  • Casualization has remained at around 20 per cent for the last decade. [6]
  • And incomes, post tax and transfers, have grown around 50% since 1986 and with broadly similar increases across each of the income quintiles.

I mentioned that there is sometimes more conjecture than real analysis in debates on the impact technological change will have on labour markets.

Equally, we need to remember that people do have genuine fears about their futures. We can’t be blinded to this by the glow of a beautiful economic model.

We must also acknowledge the limits of our own analytical practices.

The truth is much policy-making and economic analysis are based on relatively static expectations about the future, extrapolating current trends.

This is fine when things are stable. But in times of disruption, projections from current trends can be illusory.

Perhaps we need to do more ‘adaptive’ analysis and policy-making — taking insights from more sources; collaborating with different stakeholders on solutions, focused on what works, not what looks best on paper; and constantly adapting our approach as new information comes to light.

Having left you with more questions than answers, let me introduce your keynote speaker!

Dr Stephen Machin is a Professor of Economics, and Director of the Center for Economic Performance at the London School of Economics.

Stephen has made a major contribution to the economic literature on crime and education, and more recently has delved into the now omnipresent world of online crime.

Stephen is an important economic voice in the United Kingdom and I thank him for travelling to Canberra to share his insights with you.

Indeed, as a former President of the European Association of Labour Economists, Stephen may also have some particular insights on the challenges in running a society of labour economists!

Please join me in welcoming Stephen to deliver the opening address to this Society’s inaugural conference.

[1] “Rethinking Global Development Policy for the 21st Century.” Lawrence H. Summers Center for Global Development November 8, 2017.

[3] ‘Digitisation and the gender participation gap in the Asia-Pacific’ (forthcoming), Tim Watson, Michael Corliss and Donna-Jean Nicholson, Paper for the ‘Women and the Future of Work in the Asia Pacific conference’, Bangkok, 31  January-1 February,

[4] Sources: OECD Gender Data Portal, and OECD Employment Database,; see also OECD (2017), The Pursuit of Gender Equality: An Uphill Battle, OECD Publishing, Paris.