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

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Author Info
Stephen Knights (Balliol College Oxford, UK)
Mark Harris (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
Joanne Loundes (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

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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 strong evidence of state dependence. In certain key respects, the findings of this study differ markedly from those of other Australian labour market studies. It is expected that these findings will provide further insight into the causes of contemporary unemployment, and may constitute further evidence of a 'scarring' effect of unemployment.

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Publisher Info
Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2000n06.

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Length: 28 pages
Date of creation: May 2000
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Handle: RePEc:iae:iaewps:wp2000n06

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  1. Bruce Chapman & Matthew Gray, 2002. "Youth Unemployment: Aggregate Incidence and Consequences for Individuals," CEPR Discussion Papers 459, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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  2. Jeff Borland & Yi-Ping Tseng, 2004. "Does 'Work for the Dole' Work?," Melbourne Institute Working Paper Series wp2004n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  3. Matthew Gray, 2000. "The Effects of Unemployment on the Earnings of Young Australians," CEPR Discussion Papers 419, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  4. Jarvis, Lovell S. & Cancino, Jose P. & Bervejillo, Jose E., 2005. "The Effect of Foot and Mouth Disease on Trade and Prices in International Beef Markets," 2005 Annual meeting, July 24-27, Providence, RI 19424, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  5. Nordström Skans, Oskar, 2004. "Scarring effects of the first labour market experience: A sibling based analysis," Working Paper Series 2004:14, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  6. Jeff Borland & Yi-Ping Tseng, 2003. "How Do Administrative Arrangements Affect Exit from Unemployment Payments? The Case of the Job Seeker Diary in Australia," Melbourne Institute Working Paper Series wp2003n27, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  7. Victoria Prowse, 2005. "State Dependence in a Multi-State Model of Employment Dynamics," IZA Discussion Papers 1623, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Victoria Prowse, 2005. "State Dependence in a Multi-state Model of Employment," Economics Papers 2005-W20, Economics Group, Nuffield College, University of Oxford. [Downloadable!]
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