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Location and Unemployment

Published online by Cambridge University Press:  01 January 2023

Bruce Bradbury  and
Jenny Chalmers
Bruce Bradbury
Affiliation:
Social Policy Research Centre, University of New South Wales
Jenny Chalmers
Affiliation:
Centre for Applied Social Research, School of Social Science and Planning, RMIT University
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Abstract

Are people receiving unemployment-related income support more likely to exit from income support if they live in a stronger labour market? This paper examines this question using data from the Australian Department of Family and Community Services Longitudinal Data Set (LDS). We find that, controlling for other observed characteristics, living in an area with a one percentage point lower unemployment rate is associated with a 5 per cent increase in the probability of exit. This implies a 9 per cent decrease in the mean duration of benefit receipt. This should be considered an upper bound for the impact of regional labour market characteristics as it partly reflects the fact that people with low skill levels can only afford to live in high unemployment regions. To control for unobserved characteristics (such as skill levels) that are constant over time we look at changes in income support among people who move location. This suggests a much lower, but still significant, impact of local labour market conditions on unemployment benefit receipt.

Type
Symposium on Social Inclusion
Information
The Economic and Labour Relations Review , Volume 14 , Issue 2 , January 2004 , pp. 208 - 234
Copyright
Copyright © The Author(s) 2004

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Footnotes

*

This paper is based on work funded through the Australian Housing and Urban Research Institute (AHURI). AHURI gratefully acknowledges the financial and other support it has received from the Commonwealth, State and Territory governments. The authors would like to thank the members of the project user group, Garry Barrett, Bill Mudd, Peter Murphy and Joan Vipond, together with Alex Heath, AHURI staff, seminar participants and an anonymous referee for comments on earlier versions of this paper.

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