DISAPPEARING MIDDLE OR VANISHING BOTTOM - A COMMENT ON GREGORY

The 'disappearing middle' hypothesis suggests a relative growth of bot h low paid and high paid jobs, with a relative decline in the number o f jobs in the middle of the distribution. The methodology underpinning Gregory's 1993 results (which supported the hypothesis for the Austra lian case) is challenged and an alternative approach outlined. The res ults show no 'disappearing middle' between 1985 and 1991 in Australia, when recorded job growth was substantial. This is pertinent to discus sion of the effect of institutions and minimum wage laws on labour mar ket outcomes.