Credential Changes and Education Earnings Premia in Australia

We find that post-school education earnings premia have remained strikingly stable over the 1981 to 2003-04 period in Australia. This stability is in sharp contrast to the rising college premium observed in the US. The observed stability in Australia may in part be due to changes in the credentials earned by individuals entering certain professional occupations during the 1980s and early 1990s, particularly for females. We provide an estimate of the potential effect of within-occupation credential changes on estimates of education earnings premia in Australia over time. Our focus is on credential changes within the nursing and teaching professions, which have moved from predominately certificate and diploma qualifications to university bachelor’s degree or higher as the standard qualificationeducation; earnings structure; wage premium; credentials; Australia

Measuring Minimum Award Wage Reliance in Australia: The HILDA Survey Experience

An important group of interest for industrial tribunals in Australia is those workers who are reliant on awards for their pay and other employment conditions. Research on award reliance and its consequences, however, has long been hampered by the lack of good quality microdata. Most obviously, there are relatively few data sets in Australia that identify the method by which pay is set and also provide detailed information about individuals and the households in which they live. The HILDA Survey, however, is an exception to this, with information about award reliance, and methods of pay setting more generally, being collected for the first time in its 8th survey wave (in 2008). This paper reviews the quality of the data on award reliance that is being collected from this source. It then provides two examples of how these data can inform policy-relevant research questions: (i) to what extent are award-reliant workers found living in income-poor households; and (ii) what role does award reliance play in contributing to the gender pay gap? The results confirm that award-reliant workers are not especially concentrated in poor households, and that for award-reliant workers there is no evidence of any gender-based pay gap.Award reliance, Australia, gender pay equity, HILDA Survey, income distribution, minimum wages

Gender Differences in Rates of Job Dismissal: Why Are Men More Likely to Lose Their Jobs?

Empirical studies have consistently reported that rates of involuntary job separation, or dismissal, are significantly lower among female employees than among males. Only rarely, however, have the reasons for this differential been the subject of detailed investigation. In this paper, household panel survey data from Australia are used that also find higher dismissal rates among men than among women. This differential, however, largely disappears once controls for industry and occupation are included. These findings suggest that the observed gender differential primarily reflects systematic differences in the types of jobs into which men and women select.dismissals, gender differentials, involuntary job separations, HILDA Survey, Australia

Families, incomes and jobs: volume 9

Provides longitudinal data on the lives of Australian residents. Introduction: Commenced in 2001, the Household, Income and Labour Dynamics in Australia (HILDA) Survey is a nationally representative panel study of Australian households. The study is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne. Roy Morgan Research has conducted the fieldwork since Wave 9 (2009), prior to which The Nielsen Company was the fieldwork provider. This is the ninth volume of the Annual Statistical Report of the HILDA Survey, examining data from the first 11 waves of the study, which were conducted between 2001 and 2011. The HILDA Survey seeks to provide longitudinal data on the lives of Australian residents. It annually collects information on a wide range of aspects of life in Australia, including household and family relationships, employment, education, income, expenditure, health and wellbeing, attitudes and values on a variety of subjects, and various life events and experiences. Information is also collected at less frequent intervals on various topics, including household wealth, fertility-related behaviour and plans, relationships with non-resident family members and non-resident partners, health care utilisation, eating habits and retirement. The important distinguishing feature of the HILDA Survey is that the same households and individuals are interviewed every year, allowing us to see how their lives are changing over time. By design, the study can be infinitely lived, following not only the initial sample members for the remainder of their lives, but also the lives of their children and grandchildren, and indeed all subsequent descendants. The HILDA Survey is therefore quite different to the cross-sectional household surveys regularly conducted by the Australian Bureau of Statistics (ABS). Cross-sectional data are of course very important, providing snapshots of the community at a given point in time—for example, the percentage of people married, in employment, or with a disability. But such data also have important limitations for understanding economic and social behaviour and outcomes. Household longitudinal data, known as panel data, provide a much more complete picture because they document the life-course a person takes. Panel data tell us about dynamics—family, income and labour dynamics—rather than statics. They tell us about persistence and recurrence, for example about how long people remain poor, unemployed, or on welfare, and how often people enter and reenter these states. Perhaps most importantly, panel data can tell us about the causes and consequences of life outcomes, such as poverty, unemployment, marital breakdown and poor health, because we can see the paths that individuals’ lives took to those outcomes and the paths they take subsequently. Indeed, one of the valuable attributes of the HILDA panel is the wealth of information on a variety of life domains that it brings together in one dataset. This allows us to understand the many linkages between these life domains; to give but one example, we can examine the implications of health for risk of poor economic outcomes. While in principle a cross-sectional survey can ask respondents to recall their life histories, in practice this is not viable. Health, subjective wellbeing, perceptions, attitudes, income, wealth, labour market activity—indeed most things of interest to researchers and policy-makers—are very difficult for respondents to recall from previous periods in their life. Respondents even have trouble recalling seemingly unforgettable life events such as marital separations. The only way to reliably obtain information over the life-course is to obtain it as people actually take that course. For these reasons, panel data are vital for government and public policy analysis. Understanding the persistence and recurrence of life outcomes and their consequences is critical to appropriate targeting of policy, and of course understanding the causes of outcomes is critical to the form those policies take. For example, it is important to distinguish between short-term, medium-term and long-term poverty because it is likely that for each issue there are different implications for policy: the nature of the policy, the priority it is accorded, and the target group of the policy. Panel data are also important because they permit causal inferences in many cases that are more credible than other types of data permit. In particular, statistical methods known as ‘fixed-effects’ regression models can be employed to examine the effects of various factors on life outcomes such as earnings, unemployment, income and life satisfaction. These models can control for the effects of stable characteristics of individuals that are typically not observed, such as innate ability and motivation, that confound estimates of causal effects in cross-sectional settings. For example, a crosssectional model of the determination of earnings may find that undertaking additional post-school education has a large positive impact on earnings of older workers, but this may not be the case if it is simply that more able individuals, who earn more irrespective of additional education, are more likely to undertake additional education. In principle, a fixed-effects model can ‘net out’ the effects of innate ability and thereby identify the true effect of additional post-school education for these workers.     &nbsp

Black hole magnetosphere with small scale flux tubes--II. Stability and dynamics

In some Seyfert Galaxies, the hard X-rays that produce fluorescent emission lines are thought to be generated in a hot corona that is compact and located at only a few gravitational radii above the supermassive black hole. We consider the possibility that this X-ray source may be powered by small scale magnetic flux tubes attached to the accretion disk near the black hole. We use three dimensional, time dependent force-free simulations in a simplified setting to study the dynamics of such flux tubes as they get continuously twisted by the central compact star/black hole. We find that, the dynamical evolution of the flux tubes connecting the central compact object and the accretion disk is strongly influenced by the confinement of the surrounding field. Although differential rotation between the central object and the disk tends to inflate the flux tubes, strong confinement from surrounding field quenches the formation of a jet-like outflow, as the inflated flux tube becomes kink unstable and dissipates most of the extracted rotational energy relatively close to the central object. Such a process may be able to heat up the plasma and produce strong X-ray emission. We estimate the energy dissipation rate and discuss its astrophysical implications.Comment: 16 pages, 17 figures. Accepted for publication in MNRA

Disability benefit growth and disability reform in the US: lessons from other OECD nations

Abstract Unsustainable growth in program costs and beneficiaries, together with a growing recognition that even people with severe impairments can work, led to fundamental disability policy reforms in the Netherlands, Sweden, and Great Britain. In Australia, rapid growth in disability recipiency led to more modest reforms. Here we describe the factors driving unsustainable DI program growth in the U.S., show their similarity to the factors that led to unsustainable growth in these other four OECD countries, and discuss the reforms each country implemented to regain control over their cash transfer disability program. Although each country took a unique path to making and implementing fundamental reforms, shared lessons emerge from their experiences. JEL codes J14, J18</jats:p

Rising top-income persistence in Australia: evidence from income tax data

We use a new Australian longitudinal income tax dataset, Alife, covering 1991–2017, to examine levels and trends in the persistence in top-income group membership, focussing on the top 1%. We summarize persistence in multiple ways, documenting levels and trends in rates of remaining in top-income groups; re-entry to the top; the income changes associated with top-income transitions; and we also compare top-income persistence rates for annual and ‘permanent’ incomes. Regardless of the perspective taken, top-income persistence increased markedly over the period, with most of the increase occurring in the mid-2000s and early 2010s. In the mid- to late2010s, Australian top-income persistence rates appear to have been near the top of the range of tax-data estimates for other countries. Using univariate breakdowns and multivariate regression, we show that the rise in top-income persistence in Australia was experienced by many population subgroups

Survey under-coverage of top incomes and estimation of inequality: what is the role of the UK’s SPI adjustment?

Survey under-coverage of top incomes leads to bias in survey-based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK’s pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principal income distribution series (reported annually in Households Below Average Income) has been based on household survey data in which the incomes of a small number of ‘very rich’ individuals are adjusted using information from ‘very rich’ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under-coverage of top incomes, and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries