CEET1 Determinants of job separation and occupational mobility Chandra Shah MONASH UNIVERSITY - ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING 13 th Annual National CEET Conference Thursday, 30 October 2009

CEET2 Motivation 1.Job turnover is an important aspect of a dynamic labour market. In an open economy it facilitates an optimal allocation of labour 2.The consequences of turnover can be large for the individual, for the firm and the wider economy

CEET3 Individual 1.Job change has the potential to increase earnings and earnings growth, particularly for young people 2.Joblessness after job separation has the potential to reduce earnings and skills development and increases the risk of unemployment ‘recidivism’ (including risk to households)

CEET4 Enterprise 1.Turnover allows for optimal allocation of labour and assists with bringing new ideas and new ways of doing business into the firm 2.Firms with high turnover generally invest less in training and have less worker-to-worker transfer of firm-specific skills and knowledge

CEET5 Economy 1.Turnover can help reduce the imbalance in the demand and supply of skilled labour 2.High rates of turnover has the potential to reduce social cohesion and community capacity building

CEET6 Theoretical models on turnover 1.Human capital 2.Job matching 3.Job search

CEET7 Research questions 1.What are the significant demographic, human capital and labour market factors affecting the job separation process of individuals? 2.Conditional on job separation, what are the factors affecting a person’s job-to-job (differentiated by occupation) and job-to- joblessness (unemployment and exit from the labour force) transitions?

CEET8 Main results The significant factors affecting turnover behaviour are: 1.gender 2.age 3.marital status 4.qualifications 5.hours of work 6.reason for job separation 7.tenure in previous job 8.industry and occupation

CEET9 Turnover by sex, persons who worked sometime in year to February 2002, Australia (%) StayersMovers New entrantsAll Males Females All

CEET10 Turnover by age, persons who worked sometime in year to February 2002, Australia (%) StayersMovers New entrantsAll All

Turnover by occupation, persons who worked sometime in year to February 2002, Australia (%) OccupationStayersMovers New entrantsAll Managers Professionals Associate professionals Trades Adv clerical & service Inter. clerical sales & service Inter. prod & transport Elem. clerical sales & service Labourers All CEET11

Percentage job losers, movers in year to February 2002, Australia Occupation of last jobMalesFemalesPersons Managers Professionals Associate professionals Trades Adv clerical & service Inter. clerical sales & service 3533 Inter. prod & transport Elem. clerical sales & service Labourers All CEET12

Labour market destinations, movers in year to February 2002, Australia Job-to-job Job-to- joblessness Occupation of last job Same HorizDownUpUnemp Out of LFAll Managers Professionals Associate professionals Trades Adv clerical & service Inter. clerical sales & service Inter. prod & transport Elem. clerical sales & service Labourers All CEET13

CEET14 Results from job separation Immigrant status Probability of job separation is 20% (13 %) higher for a male from MESC (non-MESC) who arrived after 1997 than for an Australian-born Probability of job separation is 22% (14 %) higher for a female from MESC (non-MESC) who arrived after 1997 than for an Australian-born

CEET15 Results from job separation Qualifications No significant difference in the probability of job separation between males with qualifications and without qualifications Probability of job separation significantly higher for females with qualifications compared to those without (3-6 percent)

CEET16 Results from job separation Marital status Only significant for women but the size of the effect is relatively small Hours of work Probability of job separation 11% higher for males working part- time than full-time Probability of job separation 4% higher for females working part-time than full-time Occupation Significant effect for both males and females Probability of job separation is generally lower from higher skilled occupations

Predicted probability of job separation for ‘typical’ workers

CEET18 Results from occupational mobility Immigrant status MESC immigrants’ occupational mobility is generally the same as that of Australian-born Non-MESC males are more likely to become unemployed Non-MESC females are more likely to leave the labour force but only those who arrived prior to 1997 are more likely to become unemployed

CEET19 Results from occupational mobility Marital status Married men are more likely to stay in same occupation and they are less likely to become unemployed than unmarried men Married women are less likely to become unemployed but they are more likely to leave the labour force than unmarried women

CEET20 Results from occupational mobility Metro/non-metro Both men and women in metro areas are more likely to stay in the same occupation than those in non-metro areas Males in non-metro areas more likely to change to another occupation in the same major group Hours of work All part-time workers are less likely to make job-to-job transition than full-time workers (males 18% and females 14% ) Male part-time workers are less likely to become unemployed but more likely to leave the labour force Female part-time workers more likely to leave the labour force

CEET21 Results from occupational mobility Qualifications In general, persons holding higher level qualifications are more likely to make job-to-job transitions than those who have no qualifications While men with qualifications are less likely to become unemployed, women with qualifications are less likely to leave the labour force Certificate I/II have no significant effect on occupational mobility, except persons with qualifications at this level are about 7% less likely to leave the labour force than those who have no qualifications

CEET22 Results from occupational mobility Tenure For men, short tenure in the previous job is generally associated with a higher probability of unemployment but a lower probability of leaving the labour force For women, short tenure is associated with a higher probability of staying in the same occupation and a lower probability of leaving the labour force

CEET23 Results from occupational mobility Reason for job separation Job losers are less likely to find employment in the same occupation than job leavers They are also more likely to be unemployed and leave the labour force

CEET24 Results from occupational mobility Reason for job separation Job losers are less likely to find employment in the same occupation than job leavers They are also more likely to be unemployed and leave the labour force

Predicted probabilities of occupational mobility No change Horizontal Down Up UnempOut of LF Male Job leaver, FT Job loser, FT Job leaver, PT Job loser, PT Female Job leaver, FT Job loser, FT Job leaver, PT Job loser, PT CEET25

Predicted probabilities of transition to same occupation for ‘typical’ male workers CEET26

Predicted probabilities of transition to same occupation for four typical female workers CEET27

Predicted probabilities of transition unemployment for ‘typical’ male workers CEET28

Predicted probabilities of exit from labour force for ‘typical’ male workers CEET29

Predicted probabilities of exit from labour force for ‘typical’ female workers CEET30

CEET31 Concluding comments Qualifications are significant in explaining job separation for women but not men Qualifications are associated with a lower probability of unemployment for men and lower probability of exit from the labour force for women Qualifications have the potential to reduce joblessness ‘recidivism’, ‘scarring’ and skills atrophy Immigrants have different patterns of job turnover depending on whether they came from a MESC or not but also their time since arrival

Predicted probabilities of horizontal change for ‘typical’ male workers CEET32

Predicted probabilities of horizontal change for ‘typical’ female workers CEET33

Predicted probabilities of downward change for ‘typical’ male workers CEET34

Predicted probabilities of downward change for ‘typical’ female workers CEET35

Predicted probabilities of upward change for ‘typical’ male workers CEET36

Predicted probabilities of upward change for ‘typical’ female workers CEET37