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The Influence of Psychological Well-being, Ill Health and Health Shocks on Single Parents' Labour Supply

Author

Listed:
  • Alan S Duncan

    (Bankwest Curtin Economics Centre (BCEC), Curtin University)

  • Mark N Harris

    (School of Economics and Finance, Curtin University)

  • Anthony Harris

    (Centre for Health Economics (CHE), Monash University)

  • Eugenio Zucchelli

    (University of Lancaster, UK)

Abstract

This paper proposes a discrete-choice behavioural model of labour supply to examine the role of ill-health on single parents’ employment. The model provides estimates of individual preferences over a given set of labour market states and allows these preferences to be influenced by a measure of mental health, a latent health index purged of reporting bias and various measures of health shocks. Exploiting longitudinal data from the HILDA Survey, we find that psychological well-being, ill-health and health shocks significantly influence single parents’ marginal disutility of work and marginal utility of income. Further, we apply behavioural microsimulation methods to estimate the likely labour supply responses among single parents in Australia from restricting eligibility to access disability support via the Australian Disability Support Pension (DSP) scheme. Our simulation exercise reveals that imposing tighter DSP eligibility rules has a moderate but positive effect on single mothers’ employment.

Suggested Citation

  • Alan S Duncan & Mark N Harris & Anthony Harris & Eugenio Zucchelli, 2013. "The Influence of Psychological Well-being, Ill Health and Health Shocks on Single Parents' Labour Supply," Bankwest Curtin Economics Centre Working Paper series WP1307, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    • Handle: RePEc:ozl:bcecwp:wp1307
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    More about this item

    Keywords

    health; disability; wellbeing; health shocks; discrete choice; behavioural microsimulation; labour supply;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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