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Capital Constraints and Employmen
Author(s) -
Fahrer Jerome,
Simon John
Publication year - 1995
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.1995.tb00874.x
Subject(s) - constraint (computer aided design) , investment (military) , capital (architecture) , labour economics , economics , fixed capital , recreation , capital investment , physical capital , capital accumulation , capital deepening , business , financial capital , capital formation , market economy , finance , human capital , engineering , geography , mechanical engineering , archaeology , politics , political science , law
This article considers whether capital is a significant constraint on employment in Australia. We calculate the level of capital‐constrained employment for seven sectors of the Australian economy. The calculations suggest that the manufacturing; transport, storage and communication; and recreation, personal and other services sectors have sufficient capital installed to increase employment. In two other sectors, mining and wholesale and retail trade, the potential for increases in employment through increased capital utilisation may be constrained by surplus labour (as of June 1993). While some sectors are capital constrained at the moment, we find that the investment requirements to increase employment in these sectors are not onerous. We also project investment requirements in each of the sectors for employment growth over the next five years. These projections suggest that a jump in investment followed by relatively modest growth is required to sustain growth in employment.