Melbourne Institute Working Paper Series Database (1984 - 2010)

Melbourne Institute Working Paper No. 06/2001

Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia

by

Alan Duncan and Mark N. Harris

Date: June 2001

Abstract: This paper derives and estimates an econometric model of labour supply among sole parents in Australia, using modelling techniques which treat the labour supply decision as a utility maximising choice between a given number of discrete states. In estimation, we control for random preference heterogeneity as well as xed and search costs. Using our econometric model, we look at the e.ects of actual and hypothetical welfare policy reforms on the employment choices of sole parents in Australia. The microsimulation results presented in this paper use the Melbourne Institute Tax and Transfer Simulator (MITTS), developed at Melbourne Institute of Applied Economic and Social Research.

 

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