Melbourne Institute Working Paper Series Database (1984 - 2010)

Melbourne Institute Working Paper No. 06/2000

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

by

Stephen Knight, Mark Harris and Joanne Loundes

Date: March 2000

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 strong evidence of state dependence. In certain key respects, the findings of this study differ markedly from those of other Australian labour market studies. It is expected that these findings will provide further insight into the causes of contemporary unemployment, and may constitute further evidence of a 'scarring' effect of unemployment.

 

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