Melbourne Institute of Applied Economic and Social Research - Research Publications
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ItemThe Impact of Paid Parental Leave on Labor Supply and Employment Outcomes in Australia(ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD, 2020-07-02)The introduction of the Australian Paid Parental Leave scheme in 2011 provides a rare opportunity to estimate the impacts of publicly funded paid leave on mothers in the first year postpartum. The almost universal coverage of the scheme, coupled with detailed survey data collected specifically for the scheme’s evaluation, means that eligibility for paid leave under the scheme can be plausibly taken as exogenous, following a standard propensity score-matching exercise. Consistent with much of the existing literature, the study finds a positive impact on mothers’ taking leave in the first half year and on mothers’ probability of returning to work in the first year. The paper provides new evidence of a positive impact on continuing in the same job under the same conditions, where previous conclusions have been mixed. Further, it shows that disadvantaged mothers – low income, less educated, without access to employer-funded leave – respond most.
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ItemNo Preview AvailableWage Growth Distribution and Decline among Individuals: 2001-2017(Reserve Bank of Australia, 2019)We examine how wage growth is distributed across the Australian population over the period 2001 to 2017. We explore to what extent wage growth is explained by individual characteristics and job characteristics, while controlling for changes in aggregate factors. We also examine the link between low wage growth and financial well-being. The results show that post 2008, and particularly from 2013 onwards, wage growth had significantly slowed down. This result remains, even after controlling for a broad range of individual, household and job characteristics (and for time-invariant unobserved characteristics). Our results also show that the employee’s age, education, occupation and industry explain a large share of differences in wage growth. Conversely, the employee’s gender and employment contract seem less important. Overall, about half of the wage growth is explained by individual and job characteristics. Finally, we show that wage growth has a significant positive, but small, correlation with financial well-being indicators.
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ItemAustralian Children Growing Up with Opportunity(WILEY, 2017-09)Abstract This article focuses on the early years of children in Australia. It discusses the inequality of opportunity as reflected in the statistics and the potential impacts of this inequality. A brief literature review is provided regarding the impact of formal childcare and preschool attendance on child development, with a specific focus on the impact for children from disadvantaged families. The article concludes with a discussion of possible policy directions to counteract the inequality of opportunity.
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ItemHave tax-transfer policy reforms increased inequality?(Melbourne Institute of Applied Economic and Social Research, 2020-02-01)Australia has experienced 28 years of uninterrupted annual economic growth. Since reaching a peak of 11 per cent in 1993, the unemployment rate declined sharply and has been below 6 per cent for most of the period since mid-2003. Yet despite unprecedented economic expansion in Australia since the mid-1990s, fiscal reform has created a less progressive tax-transfer system, contributing to rising income inequality.
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ItemUnderstanding the rising trend in female labour force participation(Melbourne Institute of Applied Economic and Social Research, 2020-05-01)Female labour force participation has increased tremendously since World War II in developed countries. Prior research provides piecemeal evidence identifying some drivers of change but largely fails to present a consistent story. Using a rare combination of data and modelling capacity available in Australia, we develop a new decomposition approach to explain rising female labour force participation since the mid-1990s. The approach allows us to identify, for the first time, the role of tax and transfer policy reforms as well as three other factors that have been shown to matter by earlier studies. These are (i) changes in real wages, (ii) population composition changes, and (iii) changes in labour supply preference parameters. A key result is that –despite the ongoing emphasis of public policy on improved work incentives for women in Australia and elsewhere– changes in financial incentives due to tax and transfer policy reforms have contributed relatively little to achieve these large increases in participation. Instead, the other three factors drive the increased female labour force participation.
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ItemThe Dutch labour market early on in the COVID-19 outbreak: Regional coronavirus hotspots and the national lockdown(Melbourne Institute: Applied Economic & Social Research, 2020-09-01)We explore the impact of COVID-19 hotspots and regional lockdowns on the Dutch labour market. Using weekly administrative panel microdata for 50 per cent of Dutch employees until the end of March 2020, we study whether individual labour market outcomes, as measured by employment, working hours and hourly wages, were more strongly affected in provinces where COVID-19 confirmed cases, hospitalizations and mortality were relatively high. We do not observe a region-specific impact of COVID-19 on labour market outcomes. The results suggest individual characteristics are more important, including the employee’s age, type of contract and type of job. The evidence suggests that the decline of the labour market was all due to the impacts from the government-enforced lockdown and higher virus case numbers did not reinforce this decline. This suggests that preventive health measures should be at the regional level, isolating hotspots from low-risk areas.
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ItemEssential work and emergency childcare: Identifying gender differences in COVID-19 effects on labour demand and supply(Melbourne Institute: Applied Economic & Social Research, 2020)We examine whether the COVID-19 crisis affects women and men differently in terms of employment, working hours and hourly wages outcomes, and whether the effects are demand or supply driven. COVID-19 impacts are studied using administrative data on all Dutch employees up to 30 June 2020, focusing on the national lockdown and the emergency childcare for essential workers in the Netherlands. First, we find that the impact of COVID-19 is much larger for non-essential workers than for essential workers. Although, on average, women and men are equally affected, female non-essential workers are more affected than male non-essential workers. Second, partnered individuals with young children are equally affected by the crisis as others, irrespective of gender and spousal employment. Third, singleparent essential workers experience relatively large negative labour supply effects, suggesting emergency childcare was not sufficient for this group. However, overall, labour demand effects appear more important than labour supply effects.
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ItemThe Ups and Downs of the COVID-19 Crisis: A Gender Divide?(Melbourne Institue: Applied Economic & Social Research, 2020-12-01)The first few months of the COVID-19 crisis have seen ups and downs in the labour market, with different trends observed in the various states, and some groups more affected than others. This Research Insight highlights who, where and when people in Australia were most affected, and what the current situation looks like.
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ItemThe role of financial factors in the mobility and location choices of General Practitioners in Australia(BioMed Central, 2019-05-24)Background The geographic distribution of health workers is a pervasive policy concern. Many governments are responding by introducing financial incentives to attract health care workers to locate in areas that are underserved. However, clear evidence of the effectiveness of such financial incentives is lacking. Methods This paper examines General Practitioners’ (GPs) relocation choices in Australia and proposes a dynamic location choice model accounting for both source and destination factors associated with a choice to relocate, thereby accounting for push and pull factors associated with job separation. The model is used to simulate financial incentive policies and assess potential for such policies to redistribute GPs. This paper examines the role of financial factors in relocating established GPs into neighbourhoods with relatively low socioeconomic status. The paper uses a discrete choice model and panel data on GPs’ actual changes in location from one year to the next. Results This paper finds that established GPs are not very mobile, even when a financial incentive is offered. Policy simulation predicts that 93.2% of GPs would remain at their current practice and that an additional 0.8% would be retained or would relocate in a low-socioeconomic status (SES) neighbourhood in response to a hypothetical financial incentive of a 10% increase in the earnings of all metropolitan GPs practising in low-SES neighbourhoods. Conclusion With current evidence on the effectiveness of redistribution programmes limited to newly entering GPs, the policy simulations in this paper provide an insight into the potential effectiveness of financial incentives as a redistribution policy targeting the entire GP population. Overall, the results suggest that financial considerations are part of many factors influencing the location choice of GPs. For instance, GP practice ownership played almost as important a role in mobility as earnings.
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ItemChildcare Use and Its Role in Indigenous Child Development: Evidence from the Longitudinal Study of Indigenous Children in Australia(Wiley, 2019-03-01)We investigate patterns of childcare use and its influence on the cognitive development of Indigenous children. The influence of childcare on Indigenous children's cognitive outcomes is less well understood than for non-Indigenous children due to a lack of appropriate data. We focus on a cohort of Indigenous children in Australia who have been followed from infancy and for whom rich information on childcare use and cognitive outcomes is observed. Compared to Indigenous children who never participated in childcare, Indigenous children who participated in childcare performed better on several early cognitive outcomes. Using regression and propensity score matching, we show that this difference is driven by selection into childcare, with children from more advantaged families being more likely to attend formal childcare. However, matching analysis results suggest that relatively disadvantaged children might benefit more from attending childcare, as indicated by the positive estimated effects found for those who never attended childcare.