Social determinants and regional disparity of unemployment duration in Australia: A multilevel approach

The economic and social costs associated with unproductive time spent in labour market transitions between jobs and between unemployment and employment have been the subject of recent policy debate. There is now broad support for policies that provide both positive and negative incentives to those on unemployment benefits to influence relocation decisions to areas of better labour market opportunities. In this paper we examine the social determinants of time to exit from unemployment to employment and variation across functional economic regions, separately for men and women. Taking a life-course approach and using the first eight waves of the Household, Income and Labour Dynamics in Australia (HILDA) Survey we allow individuals to experience repeated episodes of unemployment over time by estimating a multilevel discrete-time event history model for the hazard of exit from unemployment. The model has a three-level hierarchical structure with episodes of unemployment nested within individuals, and individuals are themselves nested within regions. This enables an assessment of unobserved heterogeneity in unemployment duration among individuals and also among functional economic regions.