In this paper an extended version of the model presented in Lewis and Kirby (1987) is used to examine the effects of income policy on employment and real wages and to idenrify sources of Labour Market structural changes. The results provide further evidence that there have been significant changes in Australian labour market behavior during the operation of certain incomes policies. In particular, it is estimated that, since the introduction of the Accord, equilibrium resl wages have been more than 6 per cent lower than would otherwise have been expected. However, there does not appear to have been a significant shift in equilibrium employment during this period.