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Who can afford to be sick?
No full textIll-health can have a huge effect on the income of a family, writes Robert Tanton for APO
MANY AUSTRALIANS in the workforce have access to paid sick leave. In fact, unless you are a casual employee, or not in the labour force, access to sick leave is probably part of your working conditions. And many of us, if asked, would say we are healthy – in 2007, 84 per cent of men and women of working age, when asked this question, responded that they had good to excellent health.
But what of the 16 per cent who responded that they experienced poor health? Did they have access to sick leave? Did they experience lower incomes?
Recent research by Binod Nepal, Alicia Payne and Laurie Brown at the National Centre for Social and Economic Modelling at the University of Canberra, published in the AMP.NATSEM report Healthy, Wealthy and Wise?, suggests that people aged 25–64 who are in poor health are more likely not to be working, and therefore had lower incomes than people with good health. This effect was seen for every age group, and for both men and women.
One of the strongest results was that 93 per cent of men aged 35–54 in good health were in the labour force; whereas only 59 per cent of men aged 35–54 in poor health were in the labour force. This is the age group where people are usually earning the greatest (see the AMP.NATSEM report She Works Hard for Her Money for average annual earnings by age group and gender). Among those 59 per cent in the labour force but in poor health, average income in 2007 was 1060 per week for men in good health.
Now, remembering that women earn significantly less than men at this age, due to family commitments, working part time, and taking career breaks (again, see She Works Hard for Her Money), we can see that a family with a male in poor health is really going to be struggling. Further, in the case we have been looking at, the male is still in the labour force. In fact, 43 per cent of men with poor health rely on government benefits, so their income may well be less than if they were working.
Obviously the scenario we paint above is a bleak picture, and in fact a family may adjust to a family member in poor health by others taking more of the income-earning load. But the fact is that there are families in our community struggling due to ill health, and the problems associated with earning an income when poor health means a reduced capacity to work full time.
The message from this report is that ill-health can have a huge effect on the income of a family, mainly through the capacity of an individual in the family to work. These implications can be long term, depending on when the person becomes ill. If they suffer long term illness when aged 35–54, lifetime earnings will be lower, and superannuation will be lower. Further, if it is the primary income earner in a family who becomes sick, then the carer is already earning less working part time or is out of the labour force, so the family is hit with a double blow.
The other message from this report is that maintaining good health is, and should be, an important goal of individuals and government’s. It provides a foundation for strong employment and earnings growth, and hence a strong economy. •
Robert Tanton is Principal Research Fellow at the National Centre for Social and Economic Modelling (NATSEM)
Photo: iStockphoto.co
A changing pattern of childlessness
No full textDo the demands of high-status professions explain childlessness among some women? Robert Tanton describes new research findingsWOMEN in high status occupations may find little time for having children and raising a family. But is it also the case that women in other occupations are increasingly remaining childless, or putting off having children? The fertility rate in Australia is currently below the level required to replace the population. While it increased from 1.73 in 2001 to 1.93 in 2007, this is still below the replacement rate of 2.1. Australian research shows that women with a tertiary education have lower fertility rates than women without a tertiary education. Different occupations may also place much higher demands on people working in them, and therefore women working in these occupations may feel they do not have time to raise a family.But if we look back 20 years, how different was the pattern? Were women in more prestigious occupations in 1986 not having children? Were women with degrees in 1986 not having children? And in 2006, what has changed?Every ten years, the Australian Bureau of Statistics provides researchers with a wonderful opportunity to look at how many children Australian women are having. This opportunity comes in the form of one question, included in every second Census, asking for the total number of children each woman has borne.In recent work published in the Journal of Population Research, researchers at the National Centre for Social and Economic Modelling at the University of Canberra and the Centre for Aboriginal Economic Policy Research at the Australian National University used this Census question to look at whether more professional women were childless in 2006 compared to 1986. The researchers, Riyana Miranti, Justine McNamara, Robert Tanton and Mandy Yap, concentrated on women aged 20–44 who were childless in selected occupations over these twenty years, as well as childlessness for women with tertiary qualifications in different fields.The results showed that childlessness for all women (not just those with tertiary education) had increased between 1986 and 2006. In 1986, 27.6 per cent of women were childless; in 2006, the figure was 40.1 per cent. Most of this increase occurred between 1986 and 1996. In part, this is due to women putting off having children to a later age, so the researchers also looked at the figures by age group. They found that among women aged 40–44 (a group not affected as much by women putting off having children) the proportion who were childless had increased significantly, from 9 per cent in 1986 to 15.1 per cent in 2006.When the researchers looked at women with “prestigious” degrees (medicine, law, dentistry, veterinary science) compared to women with other degrees, they found that the proportion of childless women with prestigious degrees was not much higher than the proportion of childless women with other degrees. The overall gap in childlessness between these two groups, once age was taken into account, was very small. When considering prestigious occupations, the authors found that the proportion of childless women had increased between 1986 and 2006, from about 51 per cent in 1986 to 60.5 per cent in 2006. Most of this growth in childlessness occurred between 1986 and 1996. They also looked at women considered “professionals and managers” by the Australian Bureau of Statistics, and found that the proportion of childless women had increased for this group also.But the most interesting result from the occupation analysis was that the gap in childlessness between women in prestigious occupations (including professionals/managers) and women in other occupations had narrowed over the 20 year period from 1986 to 2006. In other words, in terms of childlessness, the women in other occupations were catching up to the women in prestigious occupations.The reasons for this finding are complex, but may have to do with women in prestigious occupations being able to afford childcare, and having a greater capacity to balance work and family. In fact, women in other occupations may now be facing the sorts of challenges that women in prestigious occupations were facing in 1986 and 1996, in terms of increasing pressure at work and putting off having families.The other thing that may be driving the increasing childlessness for women in all occupations, but may have more of an impact in lower income non-professional occupations, is the financial pressure of housing loans, so couples are putting off a family until the house is at least partly paid off. •Robert Tanton is Principal Research Fellow at the National Centre for Social and Economic Modelling (NATSEM)Photo: Alex E. Proimos/ Flickr
\u27A narrowing gap? Trends in the childlessness of professional women in Australia\u27 1986–2006 by Riyana Miranti, Justine McNamara, Robert Tanton and Mandy Yap can be accessed here> by readers with university affiliations or by subscribing to Springerlink\u27s Journal of Population Research
Children at risk of social exclusion: methodology and overview
No full textThis paper by Robert Tanton, Ann Harding, Anne Daly, Justine McNamara and Mandy Yap, reports on recent work conducted by the National Centre for Social and Economic Modelling (NATSEM) on an area index measuring Australian children who are at risk of being in social exclusion. This is done at a regional level (Statistical Local Area). Social exclusion is taken to mean that the child\u27s family suffers a number of aspects of disadvantage. Being at risk of social exclusion does not mean the child suffers social exclusion; it means children in the SLA have a higher risk of being in social exclusion. The method we have used to summarise a number of social exclusion variables is principal components analysis. This is a method used for a number of summary measures of disadvantage, such as the ABS SEIFA index (ABS 2003) and the NZ Indexes of deprivation (Salmond and Crampton 2002). We have split children into two groups, those aged 0 - 4 and those aged 5 - 15. This is because we think different factors may affect each of these groups. We have then created an index for the risk of social exclusion. We expected these indexes to be quite similar to the ABS SEIFA indexes. A focus of interest is the ways in which they diverge from the SEIFA indexes - that is, where these indexes provide different information, due to the fact that they are for children only. This divergence is investigated in this paper. We find that the indexes are significantly correlated with the ABS SEIFA indexes. The ABS SEIFA indexes use similar variables to our indexes but are calculated for all persons, not just children, and are calculated for Collection Districts and aggregated to SLAs. This high correlation does suggest that many high risk areas for children in social exclusion are also disadvantaged areas. Despite the high correlation, we found that the Child social exclusion index was different enough from the SEIFA indexes to provide additional information on child social exclusion
Where will we need childcare and aged care?
No full textRobert Tanton reports on new research looking at the spatial implications of population growth
THERE HAS been a lot of talk recently about how many Australians there will be in the future, and how we should prepare for this. A new population minister, Tony Burke, has been charged with preparing a strategy to cope with a forecast population of 35.9 million by 2050.Underlying this growth in population is a changing age demographic. The federal Treasury predicts that the proportion of people aged 15–64 will reduce from 67.4 per cent of the population in 2010 to 60.2 per cent of the population in 2050, while the proportion of people aged 85 and over will increase from 1.8 per cent of the population in 2010 to 5.1 per cent of the population in 2050.While the national implications for government budgets of population ageing have been comprehensively examined in Australia by Treasury in its Intergenerational Reports, much less attention has been devoted to more localised spatial implications. Yet it is already clear that the spatial implications of population ageing will create unprecedented challenges for the future delivery of government services. For example, small area population projections suggest that many regional and rural areas are likely to be characterised by strong growth in the number of aged Australians, allied with a dwindling number of children and a shrinking proportion of the population of labour force age.Recent work at the National Centre for Social and Economic Modelling (NATSEM) has provided modeling capabilities that allow us to see where different groups will be living in the future, based on where people currently live and where people of different ages are predicted to live in the future. This modeling allows us to look at (for example) where older people who are living alone will be living in the future; and where children aged three to four with all parents working will be living.A recent paper by NATSEM’s Ann Harding, Yogi Vidyattama and Robert Tanton, Population Ageing and the Needs-Based Planning of Government Services, uses this model to show where two groups – older people living alone, and families with young children and all parents working – would be living in 2027. The aim is to give some idea of where aged care units, and childcare services will be required in the future, and how many people in each area would need these services.The paper shows that growth in the proportion of families with children aged three and four and all parents working will be strongest in Western Sydney (Parramatta, Auburn, Blacktown and Liverpool), but there are also areas in inner Sydney where high growth is expected. In Melbourne, areas experiencing high growth are to the east of the city (Knox, Yarra Ranges and Waverley East). In Brisbane, areas experiencing high growth are Waverley and Hills District. In Canberra, new areas like Ngunnawal and Palmerston in Gungahlin, and older western suburbs in Belconnen (like MacGregor, Flynn and Florey) will experience relatively high growth in the number of children aged three to four with all parents working.In summary, for many cities, it tends to be the new areas where the demand for childcare places is going to be (so western Sydney; south-east outskirts of Melbourne; and new suburbs in North Canberra). But urban renewal has also meant areas closer to the city, traditionally seen as older suburbs, will also experience growth in the number of children aged three to four with all parents working.Areas with a high growth in the proportion of people aged 70 and over living alone include Liverpool, Baulkham Hills and Camden in western Sydney; and some areas in inner Sydney. In Melbourne, the high growth areas are on the northern outskirts (areas like Hume and Whittlesea), and eastern (Casey and Cardinia) and western outskirts (Wyndham). In Brisbane, the high growth areas are to the north-west of the city (Griffin-Mango Hill), and in Canberra the newer suburbs of Ngunnawal and Nicholls, and the older Belconnen suburbs of McKellar and Bruce.In terms of service provision to older Australians living alone, the general impression given by this research is that there will be a ring of outlying suburbs in each city where there will be strong growth in the number of older Australians living alone, suggesting considerable challenges in future service delivery to older Australians.The Rudd government is right to be thinking about how we go about planning for the future demographics. Given the time lag in getting services like childcare places or aged homes in, the questions that need to be answered should not only be about a sustainable level of population overall, but also around where future services will be required to service the different populations in each area. This research shows that much of the growth for both these service populations will tend to be on the outskirts of the capital cities. •Robert Tanton is Principal Research Fellow at the National Centre for Social and Economic Modelling (NATSEM)
Photo: Andrew Jeffre
The gender divide: forty years on
No full textWomen are catching up, reports Robert Tanton - but the progress is uneven, according to a recent study OVER THE PAST FOUR DECADES women have been playing catch up with men in terms of wages, education levels and wealth. It is hard to believe that just forty years ago, women in the public service were forced to resign when they got married; and when I was working in the public service, there were stories from the 1970s of women with young children putting in weekly leave forms because part time work was not available.So how far have women come? She Works Hard for the Money: Australian Women and the Gender Divide, a recent AMP.NATSEM report by Rebecca Cassells, Riyana Miranti, Binod Nepal and Robert Tanton, looks at how well women are doing in terms of this catch up. The report found that women have gained ground in areas of education and employment, but significant gaps still exist in terms of lifetime earnings and superannuation.One interesting result from the report was that the gender wage gap, adjusted for hours of work, number of children, occupation and education (which we take into account when we calculate the gap) was only 0.6 per cent for Gen Y women. This is not much – about 40,000 salary.But for Gen X women the difference was 3.5 per cent (or 40,000 salary). And for the Baby Boomer women it was 13.4 per cent (or about 1.5 million over a lifetime, whereas men will earn 3.3 million over a lifetime; a woman with a degree and children will earn 40,000 if they took a year off, and 1.5 million that we find for people with bachelor degrees. There are a number of possible reasons for this much larger difference, and some of the findings from our report shed light on the differences. For example, we find that full time women are working fewer hours per week, and that when women take time off to care for someone they tend to take unpaid leave whereas men will use flexible working hours (which means they will continue to be paid for the hours they use to care for children). We also find that full time working women spend much more of their time doing housework and looking after children than full time working men. So over their lifetime, women are spending more time doing unpaid work.One consequence of this difference in lifetime earnings is that women’s superannuation is not as high as men’s superannuation. Using 2007 data we found that by age 55, when people are starting to think about retirement, 44 per cent of men will have a superannuation balance of more than $100,000, but only 31 per cent of women will have this level of superannuation.So what does all this add up to? The main conclusion is that women have caught up with men in many aspects (income, employment, education), but that the time out to have and raise children, and the change in their working life to care for children, still leaves them significantly worse off at certain periods of their life, and hence over their lifetime. The Australian government should be applauded for bringing in paid maternity leave, but the break just after having a baby is only a small part of the story. The cost of having children really adds up in the years of unpaid labour – looking after young children, dropping them off to school, looking after them when they are sick – and what this report finds is that women are still doing the bulk of this work. •Robert Tanton is Principal Research Fellow at the National Centre for Social and Economic Modelling (NATSEM) Photo: Andrew Jeffre
Old, poor and single
No full textWill an extra 30 per week to a single aged pension. The total cost to the government would be about $1.3 billion. This policy change would reduce the poverty rate for single aged pensioners from 46.5 per cent to 36.5 per cent. The benefit paid is still just below the poverty line, but by about four per cent rather than the 14 per cent gap before the change.
Extending this analysis to small areas in Australia, we found that many of the areas that experienced below average decreases in poverty rates fall on the edges of Australia’s capital cities, in areas like Hornsby in New South Wales and Manningham in Melbourne, and that many rural areas experience above average decreases in poverty (Bourke in NSW and Cook in North Queensland).
But many remote areas in Australia have high poverty rates among lone older people allied with below average decreases in poverty rates (Longreach in Queensland and Deniliquin in New South Wales) following the policy change. This suggests that single aged persons living in such areas are more likely to be wholly dependent upon the age pension, with no or few private resources of their own to supplement their government pension.
Overall, the main message from this report was that increasing the single age pension to 66 per cent of the couple age pension was not enough to bring the single age pension above a poverty line calculated as half median disposable income. While it reduced the poverty rate for older single people, nearly 37 percent were still in poverty. What it comes down to is how well we as a society treat our aged, and what is a reasonable amount to live on. •
Robert Tanton is Principal Research Fellow at NATSEM and co-author of the report Old, Single and Poor: Using Microsimulation and Microdata to Analyse Poverty and the Impact of Policy Change Among Older Australians
Photo: Andrew Jeffre
The economic vitality report: the impact of the GFC on Australians
No full textAlthrough the global financial crisis proved to be more of a slowdown than a recession in Australia and that the economy improved throughout 2009, this report finds that more people felt their personal circumstances had declined.
The impact of the Global Financial Crisis (GFC) on financial markets first became apparent in 2007. However it was not until September 2008 that the Reserve Bank of Australia responded with the first in a series of decreases in official interest rates. By December 2008, the GFC was starting to affect individuals and households, causing changes in consumer confidence, employment, and income and expenditure patterns.
Key findings include:
1 The Global Financial Crisis (GFC) proved to be more of a slowdown than a recession in Australia.
2 A high level of concern existed in the economy in early 2009. This was short-lived owing to effective fiscal and
monetary policy measures, and by the end of 2009 economic momentum began to lift, recently confirmed by
economic growth data.
3 The GFC had a divergent impact on different age groups:
data shows that 18-24 year olds (Gen Y) were hit the hardest with the highest levels of unemployment, increased reliance on government benefits, and salary growth just above inflation over the period December 2008 to December 2009. Despite this they remained the most optimistic and showed no evidence of slowing down their spending;
the most restrained group of Australians were those aged 24-35, possibly reflecting saving to take advantage of the First Home Owner Grant and in the later part of 2009, reflecting the impact of increased interest rates on existing home owners; and
real income growth for the highest earning groups – those aged 35-44 and 45-54 – increased by 2.8% and 3.7% respectively. Those with the highest increase were aged 55-64, where salary payments increased by 6.0%.
4 Indicative of the success of economic policy, spending across the board increased and spiked following government cash handouts and tax cuts. There was no evidence of consumers having a frugal Christmas in 2009.
5 Even though the economy improved throughout 2009, more consumers felt their personal circumstances had declined.
Published by Commonwealth Bank of Australia
Prepared by: Robert Tanton, Marcia Keegan, Yogi Vidyattama and Linc Thurecht, National Centre for Social and Economic Modellin
The city, the country, the rich bush and the poor bush
No full textHow have the regions weathered the GFC? Robert Tanton looks at the dataTHE INCREASING FOCUS on remote and regional Australia since the federal election raises a series of interesting questions. How have these areas fared over the past few years? How much did they suffer through the GFC? What has happened to salary and expenditure levels?In recent research for the Commonwealth Bank, published in the bank’s Viewpoint report, the National Centre for Social and Economic Modelling (NATSEM) analysed salaries growth, expenditure and Newstart recipients for three areas in Australia – city areas, regional areas and remote areas – which were created using the ABS’s remoteness classification. Looking at salary levels in June 2010 for these areas, we found that city and remote areas had very similar average salaries, wheras salaries in regional areas were about 10 per cent lower. The highest salaries were in remote mining areas, including Fortescue and De Grey in WA, and in South Canberra.Looking at the growth in salaries for the three areas, we found that city and remote salaries increased at a very similar rate from mid 2008 to mid 2010. Again, regional salaries were consistently about 10 per cent lower than remote and city salaries over this period. In remote areas, this growth in salaries could be attributed to the mining boom – in fact, many of the high salary growth areas were in remote West Australia. Some city areas also had high salaries growth, including South Canberra and Inner Brisbane.One of the strongest stories to come out of the report was that while remote areas had some of the highest salaries and highest salaries growth, they also included localities with the lowest salaries growth. While Carnegie in WA, for instance, had the second highest salaries growth, Johnston in WA had the lowest salaries growth – in fact, a decline in average salaries of 2 per cent between 2008 and 2010. Of the ten areas with the lowest salaries growth, five areas were in remote Australia, four were in regional areas, and only one was in the city.Another measure of the level of disadvantage in an area is the proportion of Newstart recipients. This was highest in remote areas in June 2010, at 9.6 per cent, compared to 7.5 per cent in regional areas and 5.5 per cent in city areas.The final measure we looked at was expenditure, and we found that while city areas had the highest expenditure, remote areas spent more on average than regional areas. This may be due to greater opportunities to spend in city areas (who can resist spending when the shops are easy to get to, compared to driving two hours to get to the local shop?), and the higher salaries in city and remote areas. Once we looked at particular items, we found specific remote areas like Fortescue in WA spent much more than the national average on food and groceries and petrol, due to the higher prices for these particular items in these areas. So while people in remote areas spent less than people in cities, the items they did spend their money on were much more expensive.The overall picture that emerged from this analysis showed two types of remote areas: those where mining has pushed salaries growth over the past two years, and those where salaries are low, salary growth is low and there is a high proportion of Newstart recipients. So the mining boom appears to have benefited specific areas – not all areas – in remote Australia.The other problem associated with the high salaries in mining areas is the fact that those household that don’t benefit from high salaries will be struggling even more due to the much higher prices of essentials like housing, food and petrol. The average advertised weekly residential rent for a two-bedroom unit in Fortescue was more than $1000. For those on lower salaries, or even those on Newstart allowance, rent and the higher prices paid for groceries and petrol can take up an entire salary, with not much left out of a pay cheque. •Robert Tanton is Principal Research Fellow at the National Centre for Social and Economic Modelling (NATSEM)
Photo: Andrew Jeffre
Time is money...
No full textNew NATSEM research looks at the complex interaction of time, money and happiness, writes Robert TantonEARLY IN MY public service career, my supervisor told me that as a result of a recent promotion, her hourly income had actually decreased. In her previous job was an Executive Level 1 public servant she worked about 38 hours a week and earned enough to be quite comfortable. She was now working 50 hours a week as an Executive Level 2 and earning more, but not enough more to compensate for the increase in hours. I have since heard similar stories a number of times from different people in the public service and private enterprise, and it does appear that there is a particular level (usually around middle management) where the increase in hours expected by the employer does not offset the increase in salary.In her book The Work/Life Collision, Barbara Pocock writes that the weekly hours of full time employees increased from 38.2 hours per week in 1982 to 41.3 hours in 2001. These averages hide some of the more extreme cases: the proportion of employees working more than 45 hours per week increased from 18 per cent in 1985 to 26 per cent in 2001, for example, with growth especially strong among those working 50 hours or more.So have these additional hours and (it’s to be hoped) income meant we are happier? Or is there a trade off between happiness, working hours and income?In a recent report in the AMP.NATSEM Income and Wealth series, The Pursuit of Happiness, Rebecca Cassells, Cathy Gong and Marcia Keegan looked at life satisfaction in Australia. One of their main conclusions is that there are indeed links between money and happiness, but happiness wasn’t all about money. In fact, those with the highest life satisfaction score (10) were earning slightly less on average than those who registered a life satisfaction score between 6 and 9. Good health, relationships, age and home ownership were also associated with happiness. Further, those with longer working hours experienced a lower level of overall life satisfaction and satisfaction with their job. The report also found that workers are least satisfied with their working hours and the pay they receive, and most satisfied with their job security and work flexibility.Working longer hours obviously means a lot less free time. This report found that while only 1 per cent of people were dissatisfied with life overall, 11 per cent were dissatisfied with the amount of free time they have. Previous research by NATSEM had found 53 per cent of women and 40 per cent of men in Australian capital cities felt pressed for time. This is probably linked to the longer hours that we are working.So if higher pay and longer hours are not necessarily making us happier, what should we be doing about it? Barbara Pokock concludes that there is an argument “for a deeper and a more deliberate community conversation about our values, actions and options in a world that is increasingly dominated by paid work and where we use money to buy all kinds of goods and care, and sometimes, even – we hope – love.”And what will make us happier? The authors of the AMP.NATSEM report, with tongues firmly in cheek, suggest several things: “Get a job that pays well, but not too well. Buy a nice house, but don’t spend too much on a big TV, furniture or car. Put extra money into your super and open a savings account. Cut up your credit card and pay bills on time. When you start to feel pretty pleased with your life, but still not totally satisfied, don’t buy an investment property. Focus on reducing your debt, then book yourself a nice holiday!” •Robert Tanton is Principal Research Fellow at the National Centre for Social and Economic Modelling (NATSEM)Photo: Andrew Jeffre
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