Econometric modelling of housing assistance and labour market participation

Abstract

In this paper, we build on the analysis presented in an earlier report (Whelan 2004) where a similar set of issues were examined. We extend this analysis in a number of important ways. First, additional data from the Household, Income and Labour Dynamics in Australia (HILDA) dataset is now available for analysis purposes. The availability of additional waves of data makes it possible to consider the relationship between HA and labour market behaviour in a more robust manner. Further, the identification of CRA recipients proceeds in a different manner to that used in the earlier study. The approach draws on the tax-benefit simulator described in Wood et al. (2005) and provides additional information that is useful for policy analysis. In particular, it is possible to identify the EMTRs faced by HA recipients and their relationship with observed labour market outcomes. The analysis also presents additional models to those considered in Whelan (2004). For example, in Chapter 6 we consider the effect of the potential value of public housing on labour force participation. Finally, this paper exploits an additional source of information on the labour market activity of actual and potential HA recipients in the form of the Western Australian Department of Housing and Works (DHW) public housing dataset. This contains information on individuals who are on the waiting list for or reside in public housing in that state.