The evolution of mining employment during the resource boom and bust cycle in Australia

Abstract

Mining employment in Australia can be cyclical and volatile. Since the gold rush in the 1850s, Australia has experienced two major mining booms. The first was in the 1970s and the second (i.e., the mineral boom) was in the mid-2000s and so it is important to have a discussion about trends in the Australian mining industry and about employment during mining cycles. This study employs Australian mining industry data to investigate sectoral labor mobility (moving from one industry to another) when the business cycles have changed. This research has used quarterly data from 1950q1 to 2018q4 for several industries such as mining, the building and construction industry, rental, hiring and real estate services, transport, postal and warehousing, agriculture, forestry and fishing, and manufacturing to conduct an empirical analysis. The findings of this study provide evidence that the sectoral shift of mining employment in Australia’s mineral and resource industry is highly correlated and dependent on the world economic circumstances. What happens in the world economies has an important bearing on how shocks are transmitted to the Australian mining industry and other sectors. The study also shows that displaced mining workers move around from one industry to another. In particular, the building and construction, agricultural, fishing and forestry, manufacturing, and real estate industries are found to be highly affected by the movement of labor.