Dynamics of Household Joblessness: Evidence from Australian Micro-Data 2001-2007

27 Pages Posted: 8 Apr 2011

See all articles by Nicolas Herault

Nicolas Herault

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Guyonne R.J. Kalb

University of Melbourne - Melbourne Institute: Applied Economic & Social Research; IZA; ARC Centre of Excellence for Children and Families over the Life Course

Rezida Zakirova

Monash University, Department of Economics; Melbourne Institute

Date Written: April 6, 2011

Abstract

This paper investigates the persistence over time of living in a jobless household, aiming to disentangle the roles of state dependence and unobserved heterogeneity. In addition, the potential heterogeneity of state dependence is examined through estimation of interaction terms with the lagged household joblessness variable. Finally, the robustness of results is explored through the use of alternative definitions of household joblessness each based on different variables available in our data. Using the two definitions that are most different, we find substantial state dependence which is larger for women than for men under both definitions. That is, being in a jobless household in the previous year increases the probability of currently living in a jobless household by 7.7 to 17.2 percentage points for men and 12.7 to 25.1 percentage points for women. Although state dependence clearly is an important factor, as are a number of observed characteristics, unobserved heterogeneity also plays an important role for men and women: 32 to 40 per cent of the unexplained variance can be attributed to unobserved heterogeneity for men, and for women this is 42 to 46 per cent. A few characteristics (age, disability, student status, living outside of major cities, having a university degree, presence of preschool children) seem to affect the level of state dependence to some extent. However, aside from the age effect, which can increase state dependence by up to 50 per cent for men aged 60 to 64, the level of state dependence seems fairly homogenous amongst men and amongst women.

Keywords: Household joblessness, state dependence, unobserved heterogeneity

JEL Classification: D19, I32, J01, J64

Suggested Citation

Herault, Nicolas and Kalb, Guyonne R.J. and Zakirova, Rezida, Dynamics of Household Joblessness: Evidence from Australian Micro-Data 2001-2007 (April 6, 2011). Melbourne Institute Working Paper No. 10/11, Available at SSRN: https://ssrn.com/abstract=1803997 or http://dx.doi.org/10.2139/ssrn.1803997

Nicolas Herault (Contact Author)

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

HOME PAGE: http://www.findanexpert.unimelb.edu.au/researcher/person125238.html

Guyonne R.J. Kalb

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

ARC Centre of Excellence for Children and Families over the Life Course ( email )

185 Pelham Street
Carlton, 3053
Australia

Rezida Zakirova

Monash University, Department of Economics ( email )

Australia

Melbourne Institute ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia
+61383442183 (Phone)
+61383442111 (Fax)

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