A Study into the Persistence of Living in a Jobless Household

Relatively little is known about the dynamics of living in a jobless household at the individual level. We seek to fill this gap by using the Household Income and Labour Dynamics in Australia survey to estimate a dynamic random effects probit model of household joblessness. We find that state dependence clearly is an important factor in the persistence of household joblessness, as are a number of observed characteristics, while unobserved heterogeneity is also shown to play an important role. Interestingly, the results indicate that the degree of state dependence differs very little between individuals with different characteristics.