Essays on the Australian labour market

Abstract

This Thesis empirically examines several aspects of the Australian labour market. Chapter 1 studies the effects of ethnic discrimination on females' employment. Most ethnic minorities experience employment gaps. However, these gaps can result from either employers' discrimination or from the employees' cultural norms towards market employment. Conventional measures of discrimination are likely to reflect the effects of both. Chapter 1 offers a novel differences-in-differences methodology that separates the effects of the employees' cultural norms from the employers' discrimination. Applied to the HILDA data this methodology reveals non-trivial effects of the cultural norms. Despite employment gaps for all ethnic minorities we find evidence of employers' discrimination only against Asians. Chapter 2 also studies employment status. It uses a mixture regression approach to identify the homogeneous groups in the sample. The two identified groups qualitatively differ with respect to how the characteristics affect the employment status of the respondents. The career-oriented group is more likely to work when married and when they have children. The family-oriented group, in contrast, is less likely to work in such circumstances. Education increases employment chances for the career-oriented, but has no effect on the family-oriented group. The (negative) effects of children on employment are three to five times larger for the family-oriented group than for average females. Roughly 40% of females sampled in HILDA wave 13 are family-oriented and need much stronger incentives to return to employment after childbearing than the conventional estimates would imply. Chapter 3 examines the determinants of the earnings losses of mothers. It studies whether the partial effects of children on mother's expected earnings can be explained by her human capital. The lifetime children effects are well explained by the (under-accumulated) experience of the mothers. In contrast, the human capital variables do not explain the partial effects of small children. Such effects, as we show, decrease with the mothers' education. We also construct earnings-age profiles for mothers and non-mothers aggregating the earnings gap along the profiles. Such measure of the loss also decreases with the mothers' education, but the marginal effects of children are not monotonic. The second child comes cheaper than the first, but the third one is more difficult than the second.