Decomposing Differences in Labour Force Status between Indigenous and Non-Indigenous Australians

34 Pages Posted: 6 Oct 2012

See all articles by Guyonne R.J. Kalb

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

Trinh Le

Motu Economic and Public Policy Research Trust

Boyd H. Hunter

Australian National University

Felix Leung

University of Melbourne - Melbourne Institute (MIAESR)

Multiple version iconThere are 2 versions of this paper

Abstract

Despite several policy efforts to promote economic participation by Indigenous Australians, they continue to have low participation rates compared to non-Indigenous Australians. This study decomposes the gap in labour market attachment between Indigenous and non-Indigenous Australians in non-remote areas, combining two separate data sources in a novel way to obtain access to richer information than was previously possible. It shows that among women at least two thirds of the gap can be attributed to differences in the observed characteristics between the two populations. For men, the differences in observed characteristics of the two populations can account for 36 to 47 percent of the gap. A detailed decomposition shows that lower education, worse health, and larger families (particularly for women) explain the lower labour market attachment of Indigenous Australians to a substantial extent. Compared with previous studies, this study is able to explain a larger proportion of the gap in employment between Indigenous and non-Indigenous people due to being able to include a larger set of explanatory variables.

Keywords: labour market attachment, Indigenous Australians, non-linear decomposition

JEL Classification: J15, J21

Suggested Citation

Kalb, Guyonne R.J. and Le, Trinh and Hunter, Boyd and Leung, Felix, Decomposing Differences in Labour Force Status between Indigenous and Non-Indigenous Australians. IZA Discussion Paper No. 6808, Available at SSRN: https://ssrn.com/abstract=2157950

Guyonne R.J. Kalb (Contact Author)

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

Trinh Le

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Boyd Hunter

Australian National University ( email )

Centre for Aboriginal Economic Policy Research
Building 21, Hanna Neumann Building
Canberra ACT 0200
Australia
58207 6125 8207 (Phone)

Felix Leung

University of Melbourne - Melbourne Institute (MIAESR) ( email )

Level 5, FBE Building, 111 Barry Street
161 Barry Street
Carlton, VIC 3053
Australia

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