Essays in applied microeconomics

Abstract

This thesis comprises three essays in applied microeconomics. In Chapter 2, I use the Household Income and Labour Dynamics Survey in Australia (HILDA) to explore the relevance and contribution of greedy jobs to the gender pay gap in Australia. Greedy jobs involve working long and unpredictable hours in jobs where individuals are not easily substitutable. They engender compensating differentials resulting in an earnings to hours elasticity that often exceeds one. Chapter 2 shows that occupational gender earnings gaps are highest in occupations where greedy jobs proliferate and that wage-setting institutions engender heterogenous effects on occupational gender earnings gaps. Relative to the United States, occupational gender earnings gaps are smaller in Australia, consistent with evidence that labour market institutions compress the earnings distribution. Within occupations, the use of collective agreements attenuates the size of occupational gender earnings gaps, while the use of individual agreements increases them. Not surprisingly, individuals employed in greedy occupations predominantly use individual agreements to negotiate pay.

Chapter 3 evaluates the Australian government's co-contribution policy, a retirement savings policy targeted at low and middle income (LMI) individuals that matched personal contributions made to superannuation. Using the Australian Taxation Office Longitudinal Information Files (ALife), we apply a difference-in-difference approach and exploit administrative changes made to the policy to identify the impact of the matching program on savings behaviour of LMI individuals. Reducing the income eligibility threshold led to a 0.9 percentage point decline in the number of individuals who made a contribution and a 6.2 per cent decrease in the value of retirement contributions made. Conditional on making a non-concessional (post-tax) contribution prior to the change in eligibility rules, the value of individual contributions declined by between 16 to 22 per cent.

Chapter 4 examines the impact of two changes to Australia's Parenting Payment Single (PPS) program, a welfare payment for low-income single mothers. One change lowered the age of youngest child cut off for program eligibility, forcing new welfare entrants onto the less generous Newstart (unemployment) payment. A second change increased job search requirements for those on PPS. Using the Multi-Agency Data Integration Project (MADIP), now known as the Person Level Integrated Data Asset (PLIDA), we apply a difference-in-difference strategy which exploits the rule changes combined with an unannounced end to grandfathering provisions to disentangle the two effects. While we find little effect of the increased job search requirements on the employment rates of single mothers, the decreased generosity of the program did exert a small and negative impact on the employment rate of single mothers. The policy change also produced a large decrease in the share of single mothers who relied on a combination of welfare and employment. 35 per cent of single mothers who ever received PPS between 2011 and 2016 eliminated their use of welfare. On average, due to the decreased generosity of the welfare payments, single mothers had lower incomes after the policy changes. Show more