Intergenerational mobility in Australia: national and regional estimates using administrative data
with Bhash Mazumder
We produce the first estimates of intergenerational mobility in Australia using tax data covering over a million individuals born between 1978 and 1982. We find that the intergenerational elasticity in total income is 0.185, and that the rank-rank slope is 0.215. These are among the lowest estimates for advanced economies. We show that there is both substantial upward mobility from the bottom of the income distribution and substantial downward mobility from the top. We also produce the first regional estimates of intergenerational mobility for Australia. While mobility is rapid throughout most of the country there is meaningful dispersion — with the mining boom in particular driving strong upward mobility over the period observed.
Intergenerational income mobility – income ranks
What drives second generation success? The role of education, culture and social context
I explore the role of education, culture and social context in the intergenerational income mobility of second generation migrant communities in Australia. I present a new decomposition of intergenerational income mobility, and find a central role for differences in education mobility in driving differences in income mobility between migrant communities. Further, differences in the cultural values migrant communities bring with them, and the context of their migration, are associated with large differences in second generation educational achievement and attainment. Second generation migrants from countries that outperform on tests of student achievement, or face higher income penalties in the first generation, tend to have better educational outcomes. I use a rich array of survey and test score data to show the outperformance of migrants from poorer backgrounds emerges late in adolescence, and is reflected in attainment, aspirations and the perceived returns to education, but not in school test scores.
Intergenerational income mobility for Australian migrant communities
Place, jobs, peers and the importance of the teenage years: exposure effects and intergenerational mobility
I show that where a child grows up has a causal effect on their adult income, but that place matters most in the teenage years. I use variation in the age at which Australian children move to identify place exposure effects, finding an additional year in a place with better outcomes is of more value in adolescence than in early childhood. I explore two potential explanations. First, this pattern of place effects is partly explained by the fact that spending more years in a place in adolescence lifts the probability of entering the associated local labour market. Second, among permanent postcode residents, I identify long-lasting peer effects using cross-cohort variation in peer parental income.
How much of the effect of your destination you get, based on when you move
Featured in the Sydney Morning Herald, 17 March 2018, by Peter Martin.
Work in progress
Measuring intergenerational income mobility: a synthesis of approaches using Australian tax data
with Bhash Mazumder
Baby Bonuses: natural experiments in cash transfers, birth timing and child outcomes
with Bob Breunig
Published in the Economic Record, Volume 94, Issue 304, March 2018
Full code and some data available on request
In this paper we use the 1 July 2004 introduction of the Australian Baby Bonus to identify the effect of family income on child test scores at grade three. We use a difference-in-differences design. We find no evidence the Baby Bonus improved child outcomes in aggregate, but some evidence of a modest effect for children from disadvantaged backgrounds. We examine whether birth shifting associated with the Baby Bonus and two other Australian maternity payments has negative long-term effects on children. Despite concerns about this unintended treatment, we find no clear evidence of health or educational consequences.
The relationship between immigration to Australia and the labour market outcomes of Australian-born workers
with Bob Breunig and Hang Thi To
Published in the Economic Record, Volume 93, Issue 301, June 2017
We examine the relationship between immigration to Australia and the labour market outcomes of Australian-born workers. We use immigrant supply changes in skill groups, defined by education and experience, to identify the impact of immigration on the labour market. We find that immigration flows into those skill groups that have the highest earnings and lowest unemployment. Once we control for the impact of experience and education on labour market outcomes, we find almost no evidence that immigration harms the labour market outcomes of those born in Australia.