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Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence

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  • Stephen Knights
  • Mark N. Harris
  • Joanne Loundes

Abstract

In this study, individual labour market dynamics are analysed using the Australian Longitudinal Survey. A random utility framework for analysing discrete choices is adopted. In this context, a model incorporating a state dependent relationship between employment outcomes is estimated. The influence on individual employment outcomes of additional variables including education, gender and unemployment benefits is also investigated. It is found that, even after controlling for observable and unobservable differences between individuals, there is evidence of state dependence, which may constitute evidence of a ‘scarring’ effect of unemployment.

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  • Stephen Knights & Mark N. Harris & Joanne Loundes, 2002. "Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 284-298, September.
    • Handle: RePEc:bla:ecorec:v:78:y:2002:i:242:p:284-298
    DOI: 10.1111/1475-4932.00058
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