Participation, Unemployment, and Wages

• Published date: 01 December 2021
• Author: Deborah A. Cobb‐Clark,Lihini De Silva
• Date: 01 December 2021
• DOI: http://doi.org/10.1111/1467-8462.12433

The Australian Economic Review, vol. 54, no. 4, pp. 482–493 DOI: 10.1111/1467-8462.12433

Participation, Unemployment, and Wages

Deborah A. Cobb‐Clark and Lihini De Silva*

Abstract

The HILDA Survey data have substantially

deepened our understanding of the Australian

labour force. In this article, we highlight key

insights relating to: (1) labour force partici-

pation; (2) unemployment; and (3) wages.

Using the panel structure of the data, along

with the breadth of questions asked, re-

searchers have been able to overcome econo-

metric challenges and better understand how

the Australian labour market operates. Much

attention has also been directed towards

understanding persistent labour market dis-

advantage and the long‐lasting impact it can

have. Together, these studies provide a

plethora of useful recommendations for

shaping future social and economic policy.

1. Labour Force Participation

The HILDA Survey data have supported a

substantial body of research aimed at under-

standing labour market participation. In this

section, we highlight the findings of this

research, focusing particularly on health and

disability, retirement and women.

1.1 Health and Disability

Those in poor health or experiencing dis-

ability face obstacles in participating fully in

the labour market. Research suggests that, for

lasting impacts, policies must focus on

education and training, rather than short‐term

job creation (Damrongplasit, Hsiao and

Zhao 2018).

Health is a major driver of labour force exit

among older and younger workers.1 Studies

using HILDA Survey data report that, for

older workers, chronic illness increases the

risk of involuntary retirement. Furthermore,

for those already experiencing labour market

disadvantage, illness compounds the impact

on employment (Welsh et al. 2018). Similarly,

mental and developmental disorders signifi-

cantly increase the risk of labour force

absence among young people (Callander

2018).

Work limitations can have a lasting impact

on participation, disproportionately affecting

those with severe limitations and low‐skilled

women (Oguzoglu 2010, 2011). Long‐term

health conditions and obesity are significant

causes of presenteeism (i.e., being at work,

but with reduced functioning) and

* School of Economics, University of Sydney, NSW,

2006, Australia. Corresponding author: Cobb‐Clark,

email <deborah.cobb-clark@sydney.edu.au>.

© 2021 The University of Melbourne, Melbourne Institute: Applied Economic & Social Research, Faculty of Business

and Economics

Published by John Wiley & Sons Australia, Ltd