Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence

Abstract

In this study, individual labour market dynamics are analysed using the Australian Longitudinal Survey. A random utility framework for analysing discrete choices is adopted. In this context, a model incorporating a state dependent relationship between employment outcomes is estimated. The influence on individual employment outcomes of additional variables including education, gender and unemployment benefits is also investigated. It is found that, even after controlling for observable and unobservable differences between individuals, there is evidence of state dependence, which may constitute evidence of a ‘scarring’ effect of unemployment.

Underemployment among Mature‐Age Workers in Australia

“…These findings have parallels with the literature investigating the determinants of unemployment using panel data in Australia (see Knights et al, 2002), where it was also found that most variables do not have a major influence on current unemployment status once the labour market history is controlled for. In contrast, other variables have played less of a role.…”

Is a Risk Index Approach to Unemployment Possible?

“…This is similar to the ¢ndings of Nakamura and Nakamura (1985) where a number of observable factors that are usually linked to labour market outcomes were insigni¢cant once the factors embodied in the person's lagged labour market behaviour were held constant. Knights (1999) presents similar ¢ndings. The reason for this change may be associated with the nature of the regressors.…”

Adult employment probabilities of socially maladjusted children

“…The literature has emphasized gender differences when analyzing non-cognitive skills and their impact on subsequent outcomes (e.g., Le et al 2005;Cobb-Clark and Tan 2011;Uysal Pohlmeier 2011;Mohanty 2012;Fletcher 2013) because the distribution of both noncognitive skills and patterns in the labor market may differ by gender (e.g., Knights et al 2002). We explore these circumstances by adding a gender-specific investigation to the pooled analysis.…”