Dr Herault’s slides are available to download at the download tab above.

Dr Nicolas Herault’s paper uses repeated cross-sectional data from Australia covering all working-age individuals (aged 25 to 54) between 1994 and 2010, a period that encompasses several policy reforms. Including a rich set of explanatory variables, reduced-form equations for labour force participation and hours worked are estimated separately for single parents, single men, single women, married men, and married women with and without children. A novelty of our empirical approach is the inclusion of three individual-specific explanatory variables that reflect the key levers of means-tested policy: benefit rates, withdrawal thresholds, and withdrawal rates. These variables are computed for each individual in our sample, accounting for their circumstances and the year of observation, using a microsimulation model to compute individual-specific benefit rates, benefit withdrawal rates and benefit withdrawal thresholds. The results reveal some interesting variations in the associations between policy parameters, labour force participation and hours worked across demographic groups and along the wage rate distribution.

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