Roger Wilkins

The Consequences of Underemployment for the Underemployed

Underemployment is generally conceived as excess labour supply associated with employed persons — that is, as a situation where employed persons would like to work more hours at prevailing wage rates. Using information collected by the 2001 Household, Income and Labour Dynamics in Australia survey, this study examines the effects of underemployment on outcomes such as income, welfare dependence and subjective well-being. Results obtained imply that, while unemployment clearly has greater adverse consequences, underemployment is nonetheless associated with significant detrimental effects on the outcomes examined. Negative effects are found for both part-time employed and full-time employed workers who would prefer to work more hours, but effects are greater for underemployed part-time workers, and are particularly large for part-time workers who would like to work full-time. Indeed, for part-time workers seeking full-time employment, adverse effects attributable to underemployment are, for some outcomes, not far short of those attributable to unemployment.

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

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 codesJ14, J18

Evaluating the Evidence on Income Inequality in Australia in the 2000s

Published ABS data from the Survey of Income and Housing (SIH) show a substantial increase in income inequality between 2001 and 2010. However, almost all of the increase occurred over a period when changes in survey methodology and income concept were occurring. I document these changes, present results of analysis of the SIH unit record data, and present independent evidence on income inequality trends using the HILDA Survey, tax records and National Accounts. I conclude that the SIH overstates the growth in income inequality, even when the income variable examined is notionally consistently defined across surveys. The extent of overstatement is uncertain, however, reflecting ambiguity about the nature and extent of changes to the distribution of household market income.

Economic Approaches to Studying Underemployment

Labor economists have long been interested in why it is that markets for labor do not behave like markets for many other goods and services. In particular, many labor markets are characterized by the imbalance between demand and supply, meaning that the available labor resources are not fully utilized, and these imbalances are often persistent. For economists, such outcomes are inefficient; labor services cannot be stored and hence if at any time they are not being used, the output that could have resulted is lost forever. The underutilization of labor also imposes significant costs on affected individuals and their families, and not just in terms of foregone income.

Disability Support Pension Recipients: Who Gets Off (and Stays Off) Payments?

We use Centrelink payment records on Disability Support Pension (DSP) recipients over the period 1995 to 2002 to investigate individual transitions off payments. Our findings are consistent with the existence of a close correspondence between disability benefit receipt and labour market outcomes: entry to DSP via unemployment benefits is associated with substantially reduced prospects of exiting DSP, while employment during the DSP spell is associated with not only an increased probability of exiting DSP, but also more success in staying off payments once an exit has been made. A further finding of our analysis is that persons who exit DSP due to take-up of employment have a relatively high rate of return to payments compared with persons who exit for other reasons, and indeed exhibit a high propensity to cycle off and on payments.

Dynamic properties of income support receipt in Australia

Using administrative records on Australian income support (welfare) recipients over the period July 1995 to June 2002, we examine dynamic properties of income support receipt and the personal characteristics associated with alternative patterns of receipt. We draw on three concepts: churning – the process of ending a spell on income support and subsequently commencing a new spell; transferring – moving from one payment-type to another within a spell on income support; and Total proportion of Time On income support (TTO) – the proportion of time on income support in a given period. We find that churning and transferring are significant features of income support receipt in Australia. For example, over half of recipients churn within five years of commencing an income support spell, and onefifth make a payment transfer within the same time frame. Examination of the characteristics associated with each of five distinct patterns of receipt reveals substantial differences in patterns by age, family composition, unemployment status, health status, and recent history of income support receipt.

Measuring Income Inequality in Australia

This article surveys the Australian data sources suited to the study of income inequality. Strengths and weaknesses of the data sources are discussed and a brief overview of inequality trends is presented. While there are several suitable data sources, each source has limitations for the purposes of ascertaining both the level of inequality at a point in time and trends in inequality over time. Drawing together the collective findings of the alternative data sources in part addresses the limitations of individual data sources, but there nonetheless remain significant sources of uncertainty about inequality levels and trends in Australia.

Credential Changes and Education Earnings Premia in Australia

Post-school education earnings premia have remained strikingly stable over the 1981 to 2003–2004 period in Australia. This stability contrasts sharply with the rising college premium observed in the USA. The observed stability in Australia may in part be due to changes in the credentials earned by individuals entering certain professional occupations (especially nursing and teaching) during the period, particularly for women. We construct an estimate of the potential effect of within-occupation credential changes on estimates of education earnings premia in Australia over time.

Gender Differences in Involuntary Job Loss: Why Are Men More Likely to Lose Their Jobs?

Empirical studies have consistently reported that rates of involuntary job loss 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 article, household panel survey data from Australia are used that also find higher rates of job loss 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.

Explaining the Growth in the Number of Recipients of the Disability Support Pension in Australia

This article shows that one‐third of the growth in the Disability Support Pension (DSP) recipiency rate over the last 30 years can be explained by population ageing and increases in the retirement age for women. A wide range of factors is likely to have contributed to the remaining growth, but we argue that the growing attractiveness of DSP compared to other income‐support payments has played an important role. Looking forward, population growth and planned increases in the retirement age will both put upward pressure on the DSP roll, which, without major reform, could plausibly hit 1 million recipients within 10 years.