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The Scarring Effects of Unemployment, Low Pay and Skills Under-utilisation in Australia Compared

Author

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  • Mavromaras, Kostas

    (University of Adelaide)

  • Sloane, Peter J.

    (Swansea University)

  • Wei, Zhang

    (NILS, Flinders University)

Abstract

There is a substantial literature on the scarring effects of unemployment on future employment prospects and a smaller one on the scarring effects of low pay, but the possibility that skills mismatch in the form of skills under-utilisation, may also have similar detrimental effects, has not previously been considered. This paper uses the first ten waves of the HILDA survey data to investigate the inter-related dynamics of unemployment, low pay and skills under-utilisation in Australia, focussing on differences by gender and educational pathways. It shows that skills under-utilisation also exhibits scarring effects, in addition to earlier evidence on wage penalties and reduced job satisfaction.

Suggested Citation

  • Mavromaras, Kostas & Sloane, Peter J. & Wei, Zhang, 2013. "The Scarring Effects of Unemployment, Low Pay and Skills Under-utilisation in Australia Compared," IZA Discussion Papers 7440, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7440
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    References listed on IDEAS

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    Cited by:

    1. Susaeta, Lourdes & Suárez Ruz, Esperanza & Gutiérrez-Martínez, Isis & Idrovo Carlier, Sandra & Pin, José Ramon, 2015. "A Comparative Analysis of Youth Labor Market Exclusion," IESE Research Papers D/1100, IESE Business School.
    2. Amy Wei Tian & Ying Wang & Terence Chia, 2018. "Put My Skills to Use? Understanding the Joint Effect of Job Security and Skill Utilization on Job Satisfaction Between Skilled Migrants and Australian Born Workers in Australia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(1), pages 259-275, August.
    3. PN (Raja) Junankar, 2015. "The impact of the Global Financial Crisis on youth unemployment," The Economic and Labour Relations Review, , vol. 26(2), pages 191-217, June.
    4. Floro Ernesto Caroleo & Francesco Pastore, 2018. "Overeducation at a Glance. Determinants and Wage Effects of the Educational Mismatch Based on AlmaLaurea Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(3), pages 999-1032, June.
    5. Stijn Baert & Dieter Verhaest, 2019. "Unemployment or Overeducation: Which is a Worse Signal to Employers?," De Economist, Springer, vol. 167(1), pages 1-21, March.
    6. O. Fiona Yap, 2020. "A New Normal or Business-as-Usual? Lessons for COVID-19 from Financial Crises in East and Southeast Asia," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(5), pages 1504-1534, December.
    7. Mattia Filomena, 2021. "Unemployment Scarring Effects: A Symposium On Empirical Literature," Working Papers 453, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    8. Tomoko Kishi & Shigeki Kano, 2017. "Labour market transitions in Australia and Japan: A Panel Data Analysis," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 20(3), pages 175-197.
    9. Wouter Zwysen, 2015. "The effects of father’s worklessness on young adults in the UK," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-15, December.
    10. Mangan, John & Trendle, Bernard, 2017. "Hard-to-fill vacancies: An analysis of demand side responses in the Australian state of Queensland," Economic Analysis and Policy, Elsevier, vol. 54(C), pages 49-56.
    11. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    12. Valerie Egdell  & Vanessa Beck, 2020. "A Capability Approach to Understand the Scarring Effects of Unemployment and Job Insecurity: Developing the Research Agenda," Work, Employment & Society, British Sociological Association, vol. 34(5), pages 937-948, October.
    13. Crawley, Andrew & Welch, Sarah & Yung, Julieta, 2021. "Improving estimates of job matching efficiency with different measures of unemployment," Journal of Macroeconomics, Elsevier, vol. 67(C).
    14. Zwysen, Wouter, 2014. "A disadvantaged childhood matters more if local unemployment is high," ISER Working Paper Series 2014-43, Institute for Social and Economic Research.

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    More about this item

    Keywords

    dynamic estimation; state dependence; education pathways; job quality;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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