Quarterly data from 1959 to 1964 are spliced from historical national accounts data. Sources: ABS; RBA. Concerns about labour market ‘scarring’ were front of mind for policymakers during this period. The sobering experience from previous recessions had taught us that these episodes leave long-lasting marks on individuals, communities and the economy. There are many forms this can take.
For example, if people stay unemployed for too long, their skills may deteriorate or become obsolete and their prospects for re-engaging in meaningful work may decline. [3] This can result in more people in long-term unemployment or, alternatively, people withdrawing from the workforce. Monetary and fiscal policy responded quickly to support the community and to reduce the likelihood of this outcome.