The impact of public sector employment on regional economic activity: countering seasonal fluctuations and economic shocks

ABSTRACT

This research documents multidimensional facets of public value provided by public sector employment in regional Australia. Evidence and estimates of the contribution and impact of public sector employment to regional labour markets and economic activity are documented for the Illawarra, South Coast and Capital regions of New South Wales, Australia. Using a mixed methods approach, results presented illustrate that public sector employment embodies a significantly larger proportion of total employment and economic activity in most regional labour markets compared to Greater Sydney or Australia in general. Other analyses reveal both counter-seasonal and countercyclical contributions of public sector income and spending to regional economic activity. The main finding of this research is that public sector employment provides a stable foundation to regional economies that are otherwise strongly influenced by seasonal patterns associated with tourism and agriculture. The importance of public sector employment to the regional economies has been amplified in recent crisis periods associated with large scale bushfires and COVID-19.

KEYWORDS:

• Public sector
• regional employment
• gross regional product
• countercyclical
• COVID-19
• black summer bushfires

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Greater Sydney is defined by the Australian Bureau of Statistics as comprising the following areas: Central Coast, Baulkham Hills and Hawkesbury, Blacktown, City and Inner South, Eastern Suburbs, Inner South West, Inner West, North Sydney and Hornsby, Northern Beaches, Outer South west, Outer West and Blue Mountains, Parramatta, Ryde, South West, Sutherland (ABS 2016a)

2. A more recent census was conducted in August 2021, however, the data is not expected to be released until October 2022.

3. The LGAs used by .id for GRP estimates are available at .id (2021a).

4. Identity of High School and region suppressed to protect respondent identity.

5. Greater Sydney is defined by the Australian Bureau of Statistics as comprising the following areas: Central Coast, Baulkham Hills and Hawkesbury, Blacktown, City and Inner South, Eastern Suburbs, Inner South West, Inner West, North Sydney and Hornsby, Northern Beaches, Outer South west, Outer West and Blue Mountains, Parramatta, Ryde, South West, Sutherland (ABS 2016a)

6. A more recent census was conducted in August 2021, however, the data is not expected to be released until October 2022.

7. The LGAs used by .id for GRP estimates are available at .id (2021a).

8. Identity of High School and region suppressed to protect respondent identity.

Additional information

Funding

This work was supported by the South Coast Labour Council.

Notes on contributors

Martin O’Brien

Martin O'Brien is a labour economist in the Faculty of Business and Law, University of Wollongong. He is the director of their MBA program and also Director of the Centre for Human and Social Capital Research. Since obtaining his PhD from the University of Newcastle examining older male labour force participation, he has published widely in the areas of older worker employment issues, workforce redundancy, and evaluation of regional employment policies. Since 2015 his research has taken more of an employment relations flavour, with a prominent role as expert witness in a number of cases in the Fair Work Commission, including penalty rates, family and domestic violence leave, junior rates of pay, part-time and casual employment, and minimum wages.