Tuesday, 26 July, 2016

Sydney-aerial-shot

HRF senior research fellow Dr Anthea Bill was recently awarded her PhD qualification.

Her doctoral thesis uses sophisticated spatial data analysis techniques to explore the important issue of entrenched unemployment in some Australian city suburbs. Following is a brief synopsis of the findings.

Despite almost two decades of strong economic growth in Australia, particularly relative to the OECD average, clusters of co-located high unemployment suburbs have endured, as individuals in certain suburbs have struggled to negotiate the labour market.

Whether unemployment is actually worse (or better) because it is spatially concentrated (or dispersed) depends on whether the spatial organisation of cities has independent effects on socio-economic outcomes.

This thesis provides evidence that spatial concentration is producing independent effects on labour market outcomes in Sydney and Melbourne.

After controlling for population mix and employment accessibility, residential characteristics in neighbouring suburbs influence each other’s labour market outcomes. There is some push and pull, however, between the interplay of neighbouring suburbs with job-competition and ‘socialisation’ processes associated with information networks and job search, both operating between neighbouring suburbs.

The research has shown that supply-side or individual characteristics do matter in determining labour market outcomes, but on the other hand, the significance of spatial fixed effects suggests that placed-based characteristics are also important. The prominence of spatial spillovers between neighbourhoods for certain common characteristics, points to the need for location-specific policies.

The findings of this study would support a mixture of people- and place-based approaches.

Direct policy intervention to provide stimulus or address barriers to employment for factors with strong positive spatial spillovers will promote higher overall employment outcomes, as effects ripple out to neighbours, thereby magnifying the initial investment.

Addressing issues of housing affordability in inner areas is also a key policy consideration in improving access to the job-rich inner city.

Policy options might include planning, regulatory and financial mechanisms to stimulate private sector investment in affordable housing, and potentially better use of the not-for-profit sector for increasing and managing affordable housing.

To find out more about this study, which was completed at the University of Newcastle’s Faculty of Business and Law, under the supervision of Professor Martin Watts, contact Anthea

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