The Decline in Male Employment in Australia: A Cohort Analysis

We investigate the nature and sources of the decline in the level of employment of working age males in Australia in recent decades, drawing on both Australian Bureau of Statistics labour force survey data and census data. Alternative measures of the male employment rate are considered before settling on two complementary measures: the full-time employment rate and the full-time equivalent employment rate. The latter measure weights part-time jobs according to the fraction of a full-time job they represent. We then go on to estimate models of the determinants of these two employment rates using data from the population censuses conducted between 1971 and 2001. We construct a pseudo panel by ‘stacking’ the seven census data sets (Deaton 1997, Kapteyn et al 2005). This facilitates the tracing of birth cohorts over time, in turn making it possible to control for cohort unobserved heterogeneity that may bias cross-sectional estimates of effects of other characteristics, in particular age and year/time period. We produce evidence that a number of factors have contributed to the decline in male employment, including growth in educational enrolment and attainment, the decline in couple households with dependent children, growth in income taxes and welfare replacement rates, growth in labour productivity and changes in the structure of labour demand away from traditionally male-dominated industries. Significantly, we find that, all else (observable) constant, more recent birth cohorts have higher employment rates than earlier birth cohorts.