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Explaining Changes in the Social Structure of Employment: The Importance of Geography

Spatial inequality of income and employment is increasing in Australian cities. This paper explores the factors underlying increasing neighbourhood inequality with a particular focus on employment inequality. Particular attention is paid to the role of public housing: the increased targeting of public housing is identified as a partial explanation of the observed changes. A conventional Blinder decomposition is used to identify the role of observable characteristics of the population, such as education, demographics, ethnicity and industry structure, and returns to those characteristics. The changes in observable personal characteristics indicate that there has been a significant amount of sorting by these characteristics since 1976. For example, Australian cities have become more socially stratified since that time with well educated people increasingly living together. However, it is important to note that the differences between low-status and other areas cannot be explained solely by changes in personal characteristics of the local residents. In summary, geography apparently matters!

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Paper provided by University of New South Wales, Social Policy Research Centre in its series Discussion Papers with number 0067.

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Length: 42 pages
Date of creation: Jul 1996
Date of revision:
Handle: RePEc:wop:sprcdp:0067
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Web page: http://www.sprc.unsw.edu.au/dp/
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  1. Case, Anne C, 1991. "Spatial Patterns in Household Demand," Econometrica, Econometric Society, vol. 59(4), pages 953-65, July.
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  4. Gregory, R.G. & Hunter, B., 1995. "The Macro Economy and the Growth of Ghettos and Urban Poverty in Australia," CEPR Discussion Papers 325, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  5. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  6. Thursby, Jerry G., 1992. "A comparison of several exact and approximate tests for structural shift under heteroscedasticity," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 363-386.
  7. Boyd Hunter, 1995. "The Social Structure of the Australian Urban Labour Market: 1976-1991," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 28(2), pages 65-79.
  8. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
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