Determinants of job separation and occupational mobility Chandra Shah MONASH UNIVERSITY - ACER

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

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

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

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

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

6. Theoretical models on turnover • Human capital • Job matching • Job search CEET

7. Research questions • What are the significant demographic, human capital and labour market factors affecting the job separation process of individuals? • 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? CEET

8. Main results • The significant factors affecting turnover behaviour are: • gender • age • marital status • qualifications • hours of work • reason for job separation • tenure in previous job • industry and occupation CEET

9. Turnover by sex, persons who worked sometime in year to February 2002, Australia (%) CEET

10. Turnover by age, persons who worked sometime in year to February 2002, Australia (%) CEET

11. Turnover by occupation, persons who worked sometime in year to February 2002, Australia (%) CEET

12. Percentage job losers, movers in year to February 2002, Australia CEET

13. Labour market destinations, movers in year to February 2002, Australia CEET

14. 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 CEET

15. 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) CEET

16. 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 CEET

17. Predicted probability of job separation for ‘typical’ workers

18. 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 CEET 18

19. 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 CEET 19

20. 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 CEET 20

21. 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 CEET 21

22. 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 CEET 22

23. 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 CEET 23

24. 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 CEET 24

25. Predicted probabilities of occupational mobility CEET

26. Predicted probabilities of transition to same occupation for ‘typical’ male workers CEET

27. Predicted probabilities of transition to same occupation for four typical female workers CEET

28. Predicted probabilities of transition unemployment for ‘typical’ male workers CEET

29. Predicted probabilities of exit from labour force for ‘typical’ male workers CEET

30. Predicted probabilities of exit from labour force for ‘typical’ female workers CEET

31. 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 CEET

32. Predicted probabilities of horizontal change for ‘typical’ male workers CEET

33. Predicted probabilities of horizontal change for ‘typical’ female workers CEET

34. Predicted probabilities of downward change for ‘typical’ male workers CEET

35. Predicted probabilities of downward change for ‘typical’ female workers CEET

36. Predicted probabilities of upward change for ‘typical’ male workers CEET

37. Predicted probabilities of upward change for ‘typical’ female workers CEET