The Recipient Value and Distributional Impact of the Commonwealth Seniors Health Card in 2007

This paper considers the recipient value and distributional impact of the Commonwealth Seniors Health Card (CSHC) by analysing a range of possible behavioural responses to economic incentives. First, I estimate the recipient value by considering the trade-off between moral hazard and risk pooling. The utility gain through risk-pooling is found to be negligible. The deadweight loss through moral hazard may be considerable. I also use illustrative models to demonstrate the possible effects of the CSHC on savings and labour supply. Whilst the CSHC may induce some people to save and work more, it may have the opposite effect on others.distributional impact, health insurance, recipient value, Australia, retirement 

Are Low Skill Public Sector Workers Really Overpaid? A Quasi-Differenced Panel Data Analysis

Public-private sectoral wage differentials have been studied extensively using quantile regression techniques. These typically find large public sector premiums at the bottom of the wage distribution. This may imply that low skill workers are ‘overpaid’, prompting concerns over efficiency. We note several other potential explanations for this result and explicitly test whether the premium varies with skill, using Australian data. We use a quasi-differenced GMM panel data model which has not been previously applied to this topic, internationally. Unlike other available methods, this technique identifies sectoral differences in returns to unobserved skill. It also facilitates a decomposition of the wage gap into components explained by differences in returns to all (observed and unobserved) skills and by differences in their stock. We find no evidence to suggest that the premium varies with skill. One interpretation is that the compressed wage profile of the public sector induces the best workers (on unobserved skills) to join the public sector in low wage occupations, vice versa in high wage occupations. We also estimate the average public sector premium to be 6% for women and statistically insignificant (4%) for men.public sector, wages, quasi-differenced panel data, GMM, Australia

Employment Effects of Army Service and Veterans’ Compensation: Evidence from the Australian Vietnam-Era Conscription Lotteries

Exploiting the Australian National Service lotteries of 1965-72, I estimate the effect of Army service on employment outcomes. Population data from military personnel records, tax returns, veterans’ compensation records and the Census facilitate a rich and precise analysis, identified by 53,000 compliers. The employment effect is confined to men who served in Vietnam and is very large, at -37 percentage points (95%CI: -32, -43) in 2006. The effect has emerged gradually since the 1990s, and is mirrored by veterans’ Disability Pension effects. These results contrast with those for the USA, possibly reflecting differences in employment incentives associated with veterans’ compensation.Vietnam veterans; employment; natural experiment; Australia; conscription

What Would the Average Public Sector Employee be Paid in the Private Sector?

This paper estimates the average Australian public sector wage premium. It includes a detailed critical review of the methods available to address this issue. The chosen approach is a quasi-differenced panel data model, estimated by the Generalised Method of Moments, which has many advantages over other methods and has not been used before for this topic. I find a positive average public sector wage premium for both sexes. The best estimates are 6.7% for men and 10.5% for women. The estimate is statistically significant for men (p = 0.024) and for women (p public sector, wages, premium, panel data, GMM, Australia 

Is the Age Gradient in Self-Reported Material Hardship Explained by Resources, Needs, Behaviours or Reporting Bias?

Older people report much less hardship than younger people in a range of contexts, despite lower incomes. Hardship indicators are increasingly influential, so the source of the gradient has considerable policy implications. We propose a theoretical and empirical strategy to decompose the sources of this relationship. We exploit a unique feature of the Household, Income & Labour Dynamics Australia (HILDA) survey, which collects reports of hardship from all adult household members, facilitating within-couple estimates. The majority of the relationship is explained by observed resources, particularly wealth and home ownership. One third of the relationship is explained by unobserved differences between households, which we interpret as age-related behavioural choices. Reporting error does not appear to contribute to the age gradient.Hardship, age

Long-Run Mortality Effects of Vietnam-Era Army Service: Evidence from Australia’s Conscription Lotteries

We estimate the effect of Vietnam era Army service on mortality, exploiting Australia’s conscription lotteries for identification. We utilise population data on deaths during 1994-2007 and militarypersonnel records. The estimates are identified by over 51,000 compliers induced to enlist in the Army, including almost 16,000 who served in Vietnam. The implicit comparison group is the set of men who did not serve in the Army, but who would have served had their date of birth been selected in the ballot. We find no statistically significant effects on mortality overall, nor for any cause of death (by ICD-10 Chapter). Under reasonable assumptions on the death rate of compliers, the results can be expressed as relative risks (RR) of death during 1994-2007. The estimated overall RR associated with Army service is 1.03 (95% CI: 0.92, 1.19). On the assumption that Army service affected mortality only for those who served in Vietnam, the estimated RR for Vietnam Veterans is 1.06 (95% CI: 0.81, 1.51). We also find no evidence to support a hypothesis of offsetting effects due to domestic Army service (beneficial to longevity) and service in Vietnam (detrimental).mortality; Vietnam veterans; Australia; conscription lottery

How to get a better bang for the taxpayers\u27 buck in all sectors, not only Indigenous programs

A report released today by the Centre for Independent Studies (CIS) has drawn attention to the lack of quality evaluations being conducted on Indigenous programs. The report identified 1082 Indigenous-specific programs delivered by government agencies, Indigenous organisations, not-for-profit NGOs and for-profit contractors. It found 92% have never been evaluated to see if they are achieving their objectives. While it oversteps in some regards, this report raises a very important point: we don\u27t really know what works if we don\u27t check. That\u27s a lesson that applies to all areas of public policy spending, not just Indigenous affairs

The Effect of Motherhood on Wages and Wage Growth: Evidence for Australia

Labour market theory provides several reasons why mothers are likely to earn lower hourly wages than non-mothers. However, the size of any motherhood penalty is an empirical matter and the evidence for Australia is limited. This paper examines the effect of motherhood on Australian women’s wages and wage growth using a series of panel-data models which control for other relevant factors, both observed and unobserved. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, an unexplained motherhood wage penalty of around four per cent for one child, and eight per cent for two or more children, is found. Further analysis suggests that the wage penalty emerges over time through reduced wage growth, rather than through an immediate wage decline after the birth of a child. This reduction in wage growth is consistent with discrimination but also with a reduction in mothers’ work effort.Motherhood Wage Penalty, Wage Growth, Fixed Effects

Does family background affect earnings through education? A generalised approach to mediation analysis

We seek to quantify the role of education as a mechanism through which family background affects earnings. To this end, we propose a generalisation of statistical ‘mediation analysis’. In our approach, the treatment and mediator can be multidimensional. This allows us to directly and flexibly account for a range of background characteristics which affect child earnings through the pathway of education and through other mechanisms. The results suggest that educational attainment explains 24%-39% of the overall family background effect on earnings in Australia. The mediating role of education seems to be larger for Australia than for the UK

Foster carers in New South Wales: profile and projections based on ABS Census data

Administrative data on foster carers in New South Wales (NSW) are sadly lacking. Based on research commissioned by the NSW Department of Community Services, this paper uses the Australian Bureau of Statistics Census of Population and Housing and other data to provide up to date information on the characteristics of foster carers and the demographic trends that are influencing their numbers. Census data indicate that foster carer families are most likely to contain women aged 35-54 years, not in the labour force. Couples account for two thirds of all foster carers, with the majority of those couples also caring for birth children. While single parents account for less than one-fifth of all foster carers, they are more likely to foster than couples, either with or without birth children. Higher rates of fostering were found in relatively disadvantaged areas. Projected increases in female labour force participation are expected to contribute to a decline (or to slower growth) in the number of foster carers over the next decade. However, projected increases in sole parent families and couples without children are expected to have the opposite effect. The relative magnitude of these effects was not ascertained