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Incentives to Work: Replacement Ratios and the Cost of Job Loss among Indigenous Australians

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  • Anne Daly
  • Boyd Hunter

Abstract

The relationship between the social welfare system and employment incentives has received considerable attention in the literature. This paper uses data from the National Aboriginal and Torres Strait Islander Survey to consider these issues for indigenous Australians. Two measures are calculated: the replacement ratio which measures the expected gains from employment for those not in work; and the cost of job loss which measures the expected costsof becoming unemployed for those in employment. The estimates presented here show that the replacement ratio is higher for females than males and for those in a married or de facto relationship compared with single people. About 5 per cent of single males and females could expect a higher income from social security than from non‐Community Development Employment Projects (CDEP)scheme employment. Among those with dependent partners 24 per cent of males and 40 per cent of females looking for work could expect a higher income from social security than from non‐CDEP employment. The estimates of the cost of job loss, which include the effects of the duration of unemployment and the replacementratio, show a high cost for some indigenous Australians because of their expected longer duration of unemployment.

Suggested Citation

  • Anne Daly & Boyd Hunter, 1999. "Incentives to Work: Replacement Ratios and the Cost of Job Loss among Indigenous Australians," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(3), pages 219-236, September.
    • Handle: RePEc:bla:ausecr:v:32:y:1999:i:3:p:219-236
    DOI: 10.1111/1467-8462.00110
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    Cited by:

    1. Nicholas Biddle & Boyd Hunter, 2006. "An Analysis of the Internal Migration of Indigenous and Non-indigenous Australians," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 9(4), pages 321-341, December.
    2. Monica Howlett & Matthew Gray & Boyd Hunter, 2016. "Wages, Government Patterns and Other Income of Indigenous and Non-Indigenous Australians," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 19(2), pages 53-76.
    3. Boyd Hunter, 2007. "Conspicuous Compassion and Wicked Problems: The Howard Government’s National Emergency in Indigenous Affairs," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 14(3), pages 35-54.
    4. Boyd Hunter & Matthew Gray, 2004. "Further investigations into Indigenous labour supply: what discourages discouraged workers?," Labor and Demography 0407005, University Library of Munich, Germany.
    5. Boyd Hunter, 2007. "The cumulative causation and the productivity commission’s framework for overcoming Indigenous disadvantage," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 10(3), pages 185-202.
    6. Matthew Gray & Boyd Hunter, 2005. "Indigenous Job Search Behaviour," The Economic and Labour Relations Review, , vol. 16(1), pages 71-94, July.
    7. Elisa Birch, 2014. "The Determinants of Earnings for Indigenous Australian Workers," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 17(3), pages 211-232.

    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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