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Dynamics of Household Joblessness: Evidence from Australian Micro-Data 2001–2007

Author

Listed:
  • Nicolas Hérault

    () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Guyonne Kalb

    () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Rezida Zakirova

    () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper investigates the persistence over time of living in a jobless household, aiming to disentangle the roles of state dependence and unobserved heterogeneity. In addition, the potential heterogeneity of state dependence is examined through estimation of interaction terms with the lagged household joblessness variable. Finally, the robustness of results is explored through the use of alternative definitions of household joblessness each based on different variables available in our data. Using the two definitions that are most different, we find substantial state dependence which is larger for women than for men under both definitions. That is, being in a jobless household in the previous year increases the probability of currently living in a jobless household by 7.7 to 17.2 percentage points for men and 12.7 to 25.1 percentage points for women. Although state dependence clearly is an important factor, as are a number of observed characteristics, unobserved heterogeneity also plays an importantrole for men and women: 32 to 40 per cent of the unexplained variance can be attributed to unobserved heterogeneity for men, and for women this is 42 to 46 per cent. A few characteristics (age, disability, student status, living outside of major cities, having a university degree, presence of preschool children) seem to affect the level of state dependence to some extent. However, aside from the age effect, which can increase state dependence by up to 50 per cent for men aged 60 to 64, the level of state dependence seems fairly homogenous amongst men and amongst women.

Suggested Citation

  • Nicolas Hérault & Guyonne Kalb & Rezida Zakirova, 2011. "Dynamics of Household Joblessness: Evidence from Australian Micro-Data 2001–2007," Melbourne Institute Working Paper Series wp2011n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2011n10
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2011n10.pdf
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    References listed on IDEAS

    as
    1. Peter Dawkins & Paul Gregg & Rosanna Scutella, 2005. "Employment Polarisation in Australia," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 336-350, December.
    2. Paul W. Miller, 1997. "The Burden of Unemployment on Family Units: An Overview," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(1), pages 16-30.
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    4. Dickens & David T. Ellwood, 2004. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 313-370 National Bureau of Economic Research, Inc.
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    6. Paul Gregg & Rosanna Scutella & Jonathan Wadsworth, 2010. "Reconciling workless measures at the individual and household level. Theory and evidence from the United States, Britain, Germany, Spain and Australia," Journal of Population Economics, Springer;European Society for Population Economics, pages 139-167.
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    8. Stephen Nickell, 2004. "Poverty And Worklessness In Britain," Economic Journal, Royal Economic Society, vol. 114(494), pages 1-25, March.
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    10. Paul Gregg & Rosanna Scutella & Jonathan Wadsworth, 2010. "Reconciling workless measures at the individual and household level. Theory and evidence from the United States, Britain, Germany, Spain and Australia," Journal of Population Economics, Springer;European Society for Population Economics, pages 139-167.
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    12. Scutella, Rosanna & Wooden, Mark, 2008. "The effects of household joblessness on mental health," Social Science & Medicine, Elsevier, pages 88-100.
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    More about this item

    Keywords

    Household joblessness; state dependence; unobserved heterogeneity;

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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