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

Author

Listed:
  • Stephen Knights

    (Balliol College Oxford, UK)

  • Mark Harris

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Joanne Loundes

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

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.

Suggested Citation

  • Stephen Knights & Mark Harris & Joanne Loundes, 2000. "Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence," Melbourne Institute Working Paper Series wp2000n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2000n06
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2000n06.pdf
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