What 17 years of data tells us about Australia

Tuesday, Aug 1, 2017, 02:30 AM | Source: Pursuit

By Mark Wooden, Roger Wilkins

What 17 years of data tells us about Australia

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The Household, Income and Labour Dynamics in Australia Survey, or HILDA as it is known, is unique among Australian household surveys. Initiated by the Australian government at the start of this century, HILDA is not only nationally representative, it is longitudinal, in that the same people are interviewed each year.

Now in its seventeenth year, HILDA is providing important insights into the life courses of Australians that are simply not possible with any other data source.

Among the many insights, perhaps the key finding from the HILDA Survey is just how volatile the lives of many Australians are. Consider, for example, the question of income poverty. Annual poverty rates generally range in the vicinity of 10 per cent to 14 per cent. The HILDA Survey, however, shows that most 'poor' households are not persistently poor: over half of those who experience poverty over a 10-year period are in poverty for only 1 or 2 years.

The 2017 HILDA survey has found the intergenerational wealth divide is biting for Australians. Animation: Lucy Fahey / Voiceover: Chris Hatzis

More importantly, the types of persons who are exposed to persistent poverty—approximately 3 per cent of the population—are very different to those for whom poverty is a more transitory situation. And we would argue that it is the former group who should be a greater focus of government assistance.

This volatility in economic fortunes perhaps also provides some insight into why our welfare system appears to be so valued by Australians. HILDA shows that, while less than 20 per cent of 15-64 year olds personally receive welfare at any one point in time, over a 15-year period, 71 per cent of them will at some stage have a member of their household receiving welfare.

In the area of employment and work, HILDA research has also been debunking many myths. Research examining gender pay gaps, for example, finds that very little of the gap, when measured in hourly terms, is because of pay differences at the bottom of the wage distribution. The large differences in the pay of men and women would appear to be mainly due to glass ceiling effects and differential rates of promotion and career progression.

Other research has looked at the question of whether casual employment has negative consequences for mental health, but no evidence to support this could be found. One reason for this finding is that, for many, casual employment is not a permanent state. However, for those who do end up finding themselves 'trapped' in casual employment, there may be more adverse consequences. Our own ongoing research, for example, suggests that prolonged exposure to casual employment has scarring effects on future earnings.

HILDA data confirm what is well known — that, on average, the better educated you are the better off you will be in terms of a wide range of economic and social outcomes. But more controversially, when it comes to earnings of university graduates, the data also suggest that where people study matters much less than what they study.

HILDA does not have an exclusive focus on economic well-being. Notably it includes questions designed to measure subjective well-being. These 'happiness' measures have been the subject of much scrutiny, in part because they are thought to better capture what people really care about. On the other hand, it is also argued that people are naturally resilient and tend to always report being reasonably content with their lives.

The HILDA data suggest that the reality lies somewhere between these two extremes. Life satisfaction scores do respond in predictable ways to changing life events, such as job loss and serious illness. Nevertheless, for most people these responses are quite small, while the effects of more serious shocks tend to be short-lived. But what the HILDA data are very good for is identifying the sorts of individuals for whom this is not true – the people who persistently report low levels of life satisfaction. This may be a very small group (perhaps 2 per cent of the population) but it is this group who are most vulnerable to multiple sources of economic and social disadvantage.

HILDA has also improved our understanding of family life in Australia. It has shown, for example, that men are starting to do more around the house as their partners do more in the paid workforce. But men still have a lot of room for improvement, which might help explain why women are on average less satisfied with their husbands than are men with their wives.

Perhaps surprisingly, but consistent with findings for other countries, HILDA shows that children reduce the happiness of their parents. This of course raises the question of why people choose to have children in the first place. One answer is that we are irrational, or at least ill-informed. However, Melissa Graham at Deakin University presents evidence that children may have a positive long-term impact on health and well-being.

HILDA is designed to 'live' forever, and its value in improving our understanding of the lives of Australians will continue to grow as it grows older; for example, by allowing us to understand intergenerational effects. Here's hoping HILDA continues well into adulthood.

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