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The Relationship between Labor Market Conditions and Welfare Receipt in Australia: A Stock-Flow Analysis

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Abstract

This paper estimates the role of labor market conditions in the recent decline in welfare receipt among the working age population in Australia. A stock-flow model is used, which involves modeling the underlying welfare flows and using the results to simulate the effect of labor market conditions on the welfare stock. The simulation analysis suggests that improvements in the labor market explain the majority of the decline. A range of robustness checks are undertaken including using alternative levels of geographic disaggregation to deal with likely measurement error in labor market data.

Suggested Citation

  • Ha Vu, 2012. "The Relationship between Labor Market Conditions and Welfare Receipt in Australia: A Stock-Flow Analysis," ANU Working Papers in Economics and Econometrics 2012-573, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2012-573
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp573.pdf
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    1. Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
    2. Cappellari, Lorenzo & Jenkins, Stephen P., 2008. "The Dynamics of Social Assistance Receipt: Measurement and Modelling Issues, with an Application to Britain," IZA Discussion Papers 3765, Institute of Labor Economics (IZA).
    3. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
    4. Lixin Cai & Guyonne Kalb & Yi-Ping Tseng & Ha Vu, 2008. "The Effect of Financial Incentives on Labour Supply: Evidence for Lone Parents from Microsimulation and Quasi-Experimental Evaluation," Fiscal Studies, Institute for Fiscal Studies, vol. 29(2), pages 285-325, June.
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    More about this item

    JEL classification:

    • C59 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Other
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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