Melbourne Institute of Applied Economic and Social Research - Research Publications

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    Does drug use lead to homelessness for young, disadvantaged people?
    McVicar, D ; Moschion, J ; van Ours, J (Royal Statistical Society, 2019-06-01)
    Drug use among homeless young people tends to be higher than drug use among those who are not homeless. Is that because drug use causes homelessness, as is often assumed? Duncan McVicar, Julie Moschion and Jan van Ours investigate.
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    Homelessness and Incarceration: A Reciprocal Relationship?
    Moschion, J ; Johnson, G (Springer Verlag, 2019)
    Objectives Examine whether exits from incarceration lead to homelessness and whether homelessness leads to incarceration. Methods This paper uses a unique longitudinal dataset which follows disadvantaged Australians over 2.5 years and provides very detailed information on their housing circumstances. Although studies consistently report a positive association between incarceration and homelessness, little is known about the causal relationship between them. We advance in that direction by exploiting the longitudinal dimension of our data in two ways: (i) employing individual fixed effects models to deal with time-invariant unobserved heterogeneity; (ii) lagging key independent variables to minimise reverse causality issues. Results Our results show that homelessness does not increase the risk of incarceration. In contrast, incarceration does increase the probability that an individual will become homeless, but not immediately. Exploiting details of the accommodation calendar 1-24 months after release, we find a modest immediate effect of incarceration on homelessness (a 3 percentage points increase), which increases 6 months after release (to around 12 percentage points) and persists for a further 11 months with respondents most often staying in precarious housing arrangements (boarding houses or with friends with no alternative) rather than becoming literally homelessness. Conclusions Our study shows the importance of having adequate coverage for post-release programs to break the link between incarceration and homelessness. Specifically, we find that the critical period for ex-inmates starts 6 months after release suggesting that this may be the time when support programs are currently lacking and would be most efficient.
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    Early illicit drug use and the age of onset of homelessness
    McVicar, D ; Moschion, J ; van Ours, JC (Wiley, 2019-01)
    We investigate the effect of taking up daily use of cannabis on the onset of homelessness by using Australian data. We use a bivariate simultaneous mixed proportional hazard model to address potential biases due to common unobservable factors and reverse causality. We find that taking up daily use of cannabis substantially increases the probability of transitioning into homelessness for young men but not young women. In contrast, the onset of homelessness increases the probability of taking up daily use of cannabis for young women but not for young men. In a trivariate extension we find that the use of other illicit drugs at least weekly has no additional effect on transitions into homelessness for either gender but there is a large if imprecisely estimated effect of onset of homelessness on taking up weekly use of such drugs for young women.
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    Do Childhood Experiences of Parental Separation Lead to Homelessness?
    Moschion, J ; van Ours, J (Elsevier, 2019-01)
    This paper investigates whether parental separation increases the likelihood of becoming homeless for disadvantaged households. Previous studies have only provided descriptive evidence for the general population suggesting that parental separations relate to reductions in housing quality and stability. Using a unique dataset of disadvantaged Australians who provide retrospective information on parental separation and housing circumstances, we examine transitions into homelessness following parental separation. Accounting for observed as well as unobserved family and individual characteristics, and exploiting the timing of events, we show that parental separation significantly increases the likelihood of experiencing homelessness among children under the age of 12. For older children, parental separation increases the likelihood of boys becoming homeless, but not girls.
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    Achievement effects from new peers: Who matters to whom?
    McVicar, D ; Moschion, J ; Ryan, C (Elsevier, 2018-10-01)
    This paper presents estimates of achievement-related peer effects on school students’ literacy using data from national test scores, across multiple literacy measures and student cohorts, for the population of public secondary school students in Years 7 and 9 (aged 12/13 and 14/15 years) in the Australian state of Victoria. Identification is achieved via individual fixed effects and by distinguishing between secondary school peers who attended the same primary school as the individual and those who did not. Estimates of peer effects are based on the new peers, whose primary school achievement could not have been affected by the individual. The results provide strong evidence for the existence of peer effects, with small but positive and statistically significant effects from having higher-achieving peers on average and from having a higher proportion of very high-achieving peers. Further, it is individuals in the middle of the ability distribution who benefit most from having high achieving peers.
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    The Welfare Implications of Addictive Substances: A Longitudinal Study of Life Satisfaction of Drug Users
    Moschion, J ; Powdthavee, N (Elsevier, 2018-02)
    This paper provides an empirical test of the rational addiction model, used in economics to model individuals’ consumption of addictive substances, versus the utility misprediction model, used in psychology to explain the discrepancy between people’s decision and their subsequent experiences. By exploiting a unique data set of disadvantaged Australians, we provide longitudinal evidence that a drop in life satisfaction tends to precede the use of illegal/street drugs. We also find that the abuse of alcohol, the daily use of cannabis and the weekly use of illegal/street drugs in the past 6 months relate to lower current levels of life satisfaction. This provides empirical support for the utility misprediction model. Further, we find that the decrease in life satisfaction following the consumption of illegal/street drugs persists 6 months to a year after use. In contrast, the consumption of cigarettes is unrelated to life satisfaction in the close past or the near future. Our results, though only illustrative, suggest that measures of individual’s subjective wellbeing should be examined together with data on revealed preferences when testing models of rational decision-making.
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    Gender Gaps in Early Educational Achievement
    MOSCHION, J ; Cobb-Clark, D (Springer Nature, 2017-10)
    This paper analyzes the source of the gender gap in third-grade numeracy and reading. We adopt an Oaxaca-Blinder approach and decompose the gender gap in educational achievement into endowment and response components. Our estimation relies on unusually rich panel data from the Longitudinal Survey of Australian Children in which information on child development reported by parents and teachers is linked to each child’s results on a national, standardized achievement test. We find that girls in low- and middle-socio-economic-status (SES) families have an advantage in reading, while boys in high-SES families have an advantage in numeracy. Girls score higher on their third-grade reading tests in large part because they were more ready for school at age 4 and had better teacher-assessed literacy skills in kindergarten. Boys’ advantage in numeracy occurs because they achieve higher numeracy test scores than girls with the same education-related characteristics.
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    The impact of fertility on mothers' labour supply in Australia: Evidence from exogenous variation in family size
    Moschion, J (John Wiley & Sons, 2013-09-13)
    This paper estimates the impact of fertility on mothers' labour supply in Australia, using exogenous variation in family size generated by twin births and the gender mix of siblings. Results show that having more than one child decreases mothers' labour market participation by 12 percentage points and hours worked by around four hours per week. Having more than two children reduces labour market participation by 12 percentage points and hours worked by three hours a week. Compared with other countries, the effects for Australia are large.
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    RECONCILING WORK AND FAMILY LIFE: THE EFFECT OF PRESCHOOLING
    Moschion, J (PRESSES FOND NAT SCI POLIT, 2012-03-01)
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