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39761 MIAESR newsletter no 24

2/6/09

10:37 AM

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Recent 2009 Melbourne Institute Working Papers 13/09 12/09 11/09 10/09 9/09 8/09 7/09

‘What Governs Firm-Level R&D: Internal or External Factors?’ William Griffiths and Elizabeth Webster ‘Identifying Corporate Expenditures on Intangibles Using GAAP’ L.C. Hunter, Elizabeth Webster and Anne Wyatt ‘Tax Policy and the Globalisation of R&D’ Russell Thomson ‘Tax Policy and R&D Investment by Australian Firms’ Russell Thomson ‘Macroeconomic Conditions and Successful Commercialization’ Paul Jensen and Elizabeth Webster ‘Do Patents Matter for Commercialization?’ Elizabeth Webster and Paul Jensen ‘Working Credits: A Low-Cost Alternative to Earned Income Tax Credits?’ Andrew Leigh and Roger Wilkins

Melbourne Institute News June 2009 ISSN 1442-9500 (print)

ISSN 1442-9519 (online)

Working Paper: Measuring Poverty and Social Exclusion in Australia This Working Paper by Rosanna Scutella (Melbourne Institute and Brotherhood of St Laurence), Roger Wilkins (Melbourne Institute) and Michael Horn (Brotherhood of St Laurence) addresses the need to establish a robust measure of socio-economic disadvantage to determine the extent of social exclusion (or ‘being poor’) that is occurring in Australian society.

The Working Paper (4/09) is available from the Melbourne Institute’s website at <www.melbourneinstitute.com>.

Australian Economic Review: June 2009 Issue The latest issue of the Melbourne Institute’s quarterly Australian Economic Review (vol. 42, no. 2) will be released in June. The lead article in the Australian Economic Review is ‘Reflection on Microeconomic Policy Frameworks in Australia, and a Suggestion about Fairness’, by Jonathan Pincus. This article was presented at the Inaugural Department of Economics – Melbourne Institute Lecture on Public Policy, in October 2008. The Policy Forum section of this issue includes three articles on urban transport. The June issue also contains a survey article on ‘Measures of Household Wealth for Australia’, by Paul Bloxham and Thomas Betts, which describes and compares the four main sources of household wealth data for Australia. These include two time-series measures and two survey-based measures of the distribution of wealth, one of which is based on data from the HILDA Survey. In the ‘For the Student’ section, Jeff Borland has contributed an article entitled ‘What Happens to the Australian Labour Market in Recessions?’ More information on the Australian Economic Review can be found on the Melbourne Institute’s website at <www. melbourneinstitute.com>.

Melbourne Institute News Views expressed by the contributors to Melbourne Institute News are not necessarily endorsed or approved by the Melbourne Institute. Neither the Melbourne Institute nor the Editor of Melbourne Institute News accepts any responsibility for the content or accuracy of information contained in this publication. Editor: Cliff Howard tel: 03 8344 2154, fax: 03 8344 2111, email: howardc@unimelb.edu.au. Sub-Editor: Nellie Lentini. Contributors: Professor Ross Garnaut, Ms Penny Hope, Dr Paul Jensen, Professor Guay Lim, Professor Kostas Mavromaras, Professor Tony Scott, Dr Rosanna Scutella, Professor Stephen Sedgwick, Associate Professor Beth Webster, Dr Roger Wilkins, Professor Mark Wooden.

Level 7, Alan Gilbert Building, The University of Melbourne P: (613) 8344 2100 F: (613) 8344 2111 www.melbourneinstitute.com

Issue 24

Better Evidence About What Works in Schools?

Working Papers can be download for free from <www.melbourneinstitute.com/publications/working/wp2009.cfm>. If you would like to receive an email notification when new Working Papers become available, contact the Melbourne Institute on <melb-inst@unimelb.edu.au>.

The authors propose a framework for measuring poverty and social exclusion and discuss issues that need to be resolved to arrive at valid and useful indicators or measures. The framework distinguishes seven categories (or ‘domains’) for the measurement of poverty and social exclusion: material resources (e.g. household assets/income); employment; education and skills; health and disability; social factors (e.g. support from others); community (e.g. access to community services); and personal safety. In each category, specific indicators of social exclusion would need to be developed, taking into account measurability, objectivity and parsimony.

Print Post Approved PP381667/01204

MABEL Longitudinal Survey of Australian Doctors Initial results from the MABEL longitudinal survey of Australian doctors — Medicine in Australia: Balancing Employment and Life — identify that nearly 10 per cent of Australian doctors plan to quit their work over the next five years. Page 3

Latest Annual HILDA Statistical Report A wealth of information lies in the latest Annual Statistical Report of the Household Income and Labour Dynamics in Australia (HILDA) Survey, Families, Incomes and Jobs, Volume 4. Page 4

Getting the Skills Australia Needs The March Melbourne Institute Economics Forums discussed the vocational education and training system in Australia. Page 7

The evidence base for many opinions about schools is either unclear or dominated by personal experience (possibly inaccurately recalled) or conditioned by contemporary experiences of our children. And, unlike in the United States, economists are largely absent from this debate in Australia. A recent Council of Australian Governments (COAG) agreement, however, provides a unique opportunity to address both issues. Reform of schooling has figured prominently in national policy debates for two decades. The objective is to maximise outcomes for all school students at all ability levels, regardless of family circumstances. In the language of economists, success will increase Australia’s human capital and long-term productivity growth, which help to counteract the inevitable drag on living standards likely to accompany an aging population. Although few economists research school education in Australia, they are well represented in other important areas of the human capital agenda such as health. There is a small but influential cadre of economists who work alongside clinicians and others to research issues such as the health workforce, incentive structures and payments mechanisms (which can affect the behaviour of patients, medical practitioners and medical institutions such as hospitals), and the effectiveness of health programs. In the United States, schooling reform is viewed as a multi-disciplinary issue which involves not only practitioners but also engages think tanks such as the Brookings Institution and a range of economists including James Heckman, a Nobel laureate in economics prominent (though frequently misrepresented) in the debate about early childhood education. In Australia however, members of education faculties, some Continued on page 2

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Better Evidence About What Works in Schools? (continued) sociologists and school practitioners predominate. Disputes about pedagogy (for example, the use of whole language versus phonics in teaching), and sometimes seemingly ideological disputes about the merits of public versus private education, capture much attention. Issues concerning opportunity costs (the benefits forgone by applying resources in their best alternative use), the principles of good resource allocation, the analysis of explicit and implicit incentives structures and their implications for decision making, and the calculation of rates of return are all areas in which economics has welldeveloped theoretical and empirical tools. The gains from applying these tools, and economic perspectives, are likely to be lost if economists remain disengaged or, worse, if their knowledge is unwelcome. Effective empirical research is built on quality data, amongst other things. Almost all relevant school performance data are administrative in nature and held by school authorities, state or non-government. For many years scores achieved by students in nationally consistent tests were only published at very high levels of aggregation, namely at the level of the state or territory. Data may have been available to parents and/or to school communities about the performance of their child (children) but were only selectively available to researchers in a form that permits serious analysis. Recent COAG reforms, however, present an opportunity to significantly improve access by interested researchers to quality data. New national testing arrangements allow each state, territory and school system to deposit the results of each child (together with some important background information regarding each school) in a national database to be maintained by the Australian Curriculum, Assessment and Reporting Authority (ACARA). COAG’s National Education Agreement requires ACARA to manage school assessment data and publish “relevant, nationally comparable information on all schools” to allow performance comparisons of like schools etc. Researchers may in future gain access to the underlying unit record data, but only with the approval of the departments of education. The risk is that economists may be excluded from the group granted such access, and would thus have little incentive to learn the idiosyncrasies of unfamiliar datasets in order to establish their credentials for such work. Moreover, officials will continue to control the research agenda, with the risk that only “acceptable” projects (especially ones bearing minimal political risk) will be supported. Yet we need fresh, frank and fearless minds applied if we truly wish to

establish how most cost effectively to improve education outcomes for every child, leaving none behind. A less restrictive approach to research could tap into more minds and different perspectives. We can learn from experience with the Household, Income and Labour Dynamics in Australia (HILDA) Survey, the Longitudinal Survey of Australian Youth (LSAY) and the Longitudinal Study of Australian Children (LSAC). These are longitudinal surveys that enable researchers to observe different groups of individuals or households over time. A wealth of data has been collected about the circumstances of individuals (for example, their personal attributes, family situation, finances, health) and the choices they make. A design feature of these surveys is that access to confidentialised unit record data is reasonably open to bona fide researchers. Reflecting the diversity of the researchers, a wide range of issues is examined and debated (in the case of HILDA see, for example, <www.melbourneinstitute. com/hilda/Biblio/default.html>). By its very nature this research is depoliticised; that is, the government can learn from it, but neither controls it, nor is responsible for it. Equally important, longitudinal data allow researchers to track changes in the circumstances of individuals over time, yielding insights not possible with the crosssectional data typically collected previously. The establishment of ACARA and the new national reporting arrangements present a unique opportunity to establish a quality longitudinal dataset of student test results with supporting background information etc, and an opportunity to introduce reasonably open access to the dataset for genuine researchers, including economists, interested in examining how to improve school students’ outcomes. Properly implemented, this could stimulate the application of powerful new tools for analytical work — for example, to explore links between family or personal attributes, teacher qualifications or methods, school characteristics, and student test performance over time. However, it will not be costless to establish this resource and to render it accessible while protecting privacy. Like the other longitudinal surveys it would therefore seem advisable to draw a sample and tap expert opinion to ensure that the quality and type of background data being collected are adequate for robust analytical work. The result could provide a useful specialised complement to the existing longitudinal surveys and could attract a wider range of researchers than have traditionally worked in schools research in Australia.

New Report: The Global Proxy – Melbourne Institute Shareholder Confidence Index™ The Melbourne Institute’s Applied Macroeconomics research program has now added an additional Index to its range of sponsored reports. The Global Proxy – Melbourne Institute Shareholder Confidence Index was launched in late May with sponsor Global Proxy Solicitation Pty Ltd (GPS). The Index is a summary balance measure of shareholders’ confidence in the Australian share market. It is based on shareholders’ assessment of three factors: returns, volatility and trading intentions (whether to buy or sell). The Index is designed for easy interpretation — a value below 100 is suggestive of ‘bearish’ sentiments while a value above 100 is suggestive of ‘bullish’ sentiments.

The Global Proxy – Melbourne Institute Shareholder Confidence Index TM

The first survey was conducted during March 2009 and the latest survey was conducted during the first week of May 2009. The Global Proxy – Melbourne Institute Shareholder Confidence Index increased by 10.1 per cent in May to 106.5, from 96.7 in March 2009.

Inaugural Issue May 2009

Whilst the indices for trading intentions suggest that activity in the share market will remain subdued for a while, they also reveal the dominance of buying intentions over the next few months. Shareholders’ future trading intentions indicate an appetite for exposure to energy, financials, metals and minerals and utilities. Further details on the new report are available at <www.melbourneinstitute.com/ publications/>. Enquiries can be made with Professor Guay Lim on 03 8344 2146, or by email <g.lim@unimelb.edu.au>.

Getting the Skills Australia Needs Leading academics and business people gathered during March for the Melbourne Institute Economics Forum on the theme “Getting the Skills Australia Needs”. The Forums, held in Canberra and Melbourne, stimulated discussion on the vocational education and training system in Australia, and explored questions of how well the system develops the skills of our labour force, and how successfully it matches skills to jobs to satisfy the needs of our economy. Chairing the Public Economics Forum in Canberra was Professor Stephen Sedgwick, Director, Melbourne Institute. At the Melbourne Economics Forum the Chair was Mr Tony Cole, Business Leader for Investment Consulting in Asia Pacific, Mercer (Australia) Pty Ltd. Speakers at the Canberra Forum were Dr Chris Ryan, Director, Social Policy Evaluation Analysis and Research Centre (SPEAR); Ms Megan Lilly, Associate Director, Education and Training, Australian Industry Group; and Professor Kostas Mavromaras, Melbourne Institute. Speakers at the Melbourne Forum were Dr Tom Karmel, Managing Director, National Centre for Vocational Education Research; Mr Patrick Coleman, Director Policy,

Business Council of Australia; and Professor Kostas Mavromaras, Melbourne Institute. Dr Ryan presented research on how the core skills of literacy and numeracy have been utilised at work; Ms Lilly presented evidence from employer and employee surveys; Dr Karmel provided an overview of the contribution of VET to the skills-base in Australia; and Mr Coleman suggested that greater emphasis is needed on general skills such as communications, teamwork and planning. Professor Mavromaras focused on the degree of upskilling that would be necessary for Australia to achieve a skills-mix similar to that of comparator/competitor countries. He suggested we need a general shift in workers from the lowest skills levels, and those lacking useful qualifications, to a status of higher skills and with at least some qualification relevant to their labour market aspirations. He argued that the role of vocational training and education is pivotal for such a change. Electronic copies of the speakers’ presentations made at the Forums can be viewed at <www.melbourneinstitute.com/ forums/>.

Stephen Sedgwick Director, Melbourne Institute

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2009 Economic and Social Outlook Conference: ‘The Road to Recovery: Restoring Prosperity after the Crisis’

MABEL Longitudinal Survey of Australian Doctors: Initial Results

The Melbourne Institute and The Australian are pleased to host their sixth joint Economic and Social Outlook Conference on Thursday 5 and Friday 6 November 2009 at the University of Melbourne.

Initial results from the first wave of the MABEL longitudinal survey of Australian doctors — Medicine in Australia: Balancing Employment and Life — identify that nearly 10 per cent of Australian doctors plan to quit their work over the next five years.

The conference program is intended to facilitate a timely, wide-ranging debate over two days touching on major current economic and social policy issues relevant to managing the recovery from the global financial crisis while ensuring that Australia emerges better placed to meet its longer term challenges. Examples of these include: addressing pressing social issues such as those facing the newly unemployed and the socially excluded; what have we learnt from the financial crisis on how to manage cycles in Australia’s terms of trade or the adequacy of regulation?; and do we yet have the right approach to pricing carbon, or closing the gap in outcomes achieved for indigenous Australians, or maximising health and education for all, or achieving affordable housing, or addressing skills issues?

A panel of quality speakers is being assembled to ensure that this is the premiere such event in 2009. The consistent thread running through all our previous conferences has been that continued policy reform can enrich Australia’s overall well-being while providing opportunities for all. The format has established itself as the nation’s premiere economic and social public policy conference, providing a unique forum bringing together leading politicians, bureaucrats, academics and nongovernment organisation representatives. People wishing to attend the conference can make an expression of interest and be placed on the mailing list by completing the form at <www.melbourneinstitute.com/ conf2009/exp.html>. Enquiries can be made with Penny Hope, Functions Manager, at <melb-conf@unimelb.edu.au>, or by calling 03 8344 2151.

Upcoming Forum: China and the Global Financial Crisis

The MABEL research study is being conducted by the Melbourne Institute in collaboration with Monash University. The study is funded by a Health Services Research grant from the National Health and Medical Research Council (NHMRC). Initial results, launched on 23 April at the Melbourne Institute, contain information from over 10,500 doctors surveyed in 2008 — comprising 3,910 GPs, 4,603 medical specialists, 924 doctors enrolled in a specialist training program, and 1,072 non-specialist hospital doctors. Respondents are broadly representative of all Australian doctors in terms of age, gender and geographic location.

The next Melbourne Institute Economics Forum in Melbourne will be held on Monday 20 July 2009, and the theme will be on China’s response to the global financial crisis, and its effects on China’s interaction with the international economy.

Presentations will be made by Professor Ross Garnaut, The University of Melbourne; Professor Yiping Huang, Professor of Economics at the China Centre of Economic Research at Peking University; Dr Guonan Ma, Chief Economist for Asia at the Bank of International Settlements; and Dr Ligang Song, Director of the China Economy and Business Program at The Australian National University.

Do Patents Matter for Commercialisation? In February this year, the conference ‘Commercialising Inventions — What’s the Story?’, jointly hosted by the Intellectual Property Research Institute of Australia (IPRIA) and the Australian Institute of Commercialisation, looked at a range of issues and recent evidence on the development of inventions, and how efficiently they are commercialised. Presentations and videos of selected speeches can be viewed at <www.ipria.org/events/2009/CommInventions.html>. A related Working Paper, written by Professor Beth Webster and Dr Paul Jensen, analysed survey data on 3,736 Australian inventions which were the subject of a patent application between 1986 and 2005. Results include: first, patents play only a modest role in the commercialisation of inventions; second, many unpatented innovations were nonetheless commercialised, meaning that patents (alone) are neither a necessary nor sufficient condition for commercialisation. By 2007 there was only a modest difference between where a patent had been granted compared to total patent applications, in the proportion of inventions that reached commercialisation. Full results are shown in the Working Paper at <www. melbourneinstitute.com/publications/working/wp2009.cfm>. Page 6 - Melbourne Institute of Applied Economic and Social Research

Almost 12 per cent of GPs and 13 per cent of specialist doctors intend to quit medical work within the next five years, largely driven by their expectations to retire. This proportion would equate to the loss of around 2,500 GPs and 2,500 specialists in Australia.

Specialist doctors are the most likely to be satisfied with their work, followed by doctors enrolled in specialty training programs, then GPs. However, around a quarter of all doctors are dissatisfied with their hours of work. For specialists and GPs, men are more likely to be dissatisfied with their hours of work than women.

Further data analysis is being undertaken over the next few months to learn more about the determinants of doctor preferences, intentions and labour supply. Results and publications will progressively be posted on the MABEL website: <www.mabel.org.au>. De-identified research data will be made available from July to be used by other researchers, PhD students, government and medical organisations. The MABEL project is endorsed by 34 specialty medical colleges, associations and training organisations, including recent endorsements by the Royal Australian College of General Practitioners and the Australian College of Emergency Medicine. The full list is on <www.mabel.org. au/endorse.html>.

China’s economic growth suddenly slowed in the second half of 2008, as international credit markets froze and world trade slumped. The authorities responded with the largest monetary and fiscal expansions of any economy in the current global recession, and probably of any economy ever. Real economic activity has responded strongly to the stimulus. The main questions are about longer term effects of stimulatory policies.

The Forum will be held at the Grand Hyatt Melbourne. Registration forms are available from <www.melbourneinstitute.com/forums/bus_ forums.html>. For all enquiries please contact Alice Hope at <ajhope@unimelb.edu.au>.

Initial results from Wave 1 of the MABEL Survey cover a breadth of doctors’ attitudes and intentions. The following are a few top-line results from Wave 1:

Speakers at the launch (from left): Professor Jim Best, Chair, NHMRC Research Committee; Professor Anthony Scott, Head of Health Economics Research Program and Principal Investigator of MABEL, Melbourne Institute; Professor Gordon Whyte, Head, School of Rural Health, Monash University; Professor Margaret Abernethy, Dean, Faculty of Economics and Commerce, The University of Melbourne; Professor Stephen Sedgwick, Director, Melbourne Institute.

Professor Tony Scott, Principal Investigator on the MABEL project, said, “Doctors’ decisions about where to work, how many hours to work, and what to do with those hours when at work have profound implications, not only for their own and their families happiness and well-being, but also for the health of the population. MABEL is about providing a better understanding of what factors influence these decisions.”

Further information on the MABEL Survey can be obtained from the Principal Investigator, Professor Tony Scott, on 03 8344 2115, or from the MABEL Survey Manager, Anne Leahy, on 03 8344 2600.

The MABEL team: Back row (from left): Dr Matthew McGrail, Dr Sung-Hee Jeon, Terence Cheng, Professor John Humphreys, Associate Professor Guyonne Kalb, Dr Stefanie Schurer, Michelle McIsaac, Daniel Kuehnle, Peter Sivey. Front row (from left): Dr Catherine Joyce, Durga Shrestha, Professor Tony Scott, Anne Leahy, Michelle Wilson.

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Latest Annual HILDA Statistical Report

Families, Incomes and Jobs, Volume 4

A Statistical Report on Waves 1 to 6 of the HILDA Survey

The report, released in early June by the Melbourne Institute, contains 36 articles based on analysis of data collected in the HILDA Survey during the period 2001 and 2006. The survey, also known as the ‘Living in Australia study’, is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs and is managed by the Melbourne Institute at the University of Melbourne. The HILDA Survey is Australia’s only large-scale nationally representative longitudinal household panel survey which interviews the same households and individuals each year. In each of the six waves of research, the survey has interviewed over 12,000 individuals. This enables the collection of evidence-based data on how peoples’ lives are changing over time, with a focus on issues relating to families, income, employment and well-being. Since 2005, additions to the HILDA sample have exceeded drop-outs, and by 2006 the sample size reached 12,905. The annual HILDA Statistical Report includes articles on how people respond to life events, at the time of the event and down the track, and how long they persist in certain modes of behaviour. Analysis of the HILDA data allows an insight into the causes and consequences of important life outcomes, such as poverty, unemployment, marital breakdown and poor health. As such, HILDA data are vital for government and public policy analysis. The HILDA data also stimulate a steady stream of academic papers and articles, and in January 2009 the cumulative number of HILDA data users reached 1,045. The latest Statistical Report provides a glimpse of the huge breadth of data collected in the HILDA Survey and comprises sections on key aspects of life in Australia, such as households and family life; incomes and economic well-being; labour market outcomes; and life satisfaction, health and well-being. The report also contains 16 articles that focus on topics heavily influenced by the new questions included in the sixth wave of the HILDA Survey, plus articles on changes in the government policy environment.

Credit Card Debt

of long hours of work — effects on relationship quality (as measured by marital separation), and the effects on unhealthy behaviours (as measured by smoking activity).

A wealth of information lies in the latest Annual Statistical Report of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, Families, Incomes and Jobs, Volume 4.

The HILDA Survey is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs

Three of the articles using Wave 6 data are as follows.

Levels and Changes in Household Wealth Dr Roger Wilkins, Deputy Director of the HILDA project, analysed the HILDA Survey data on household assets and debts to obtain a measure of household and individuals’ wealth. Findings show that the growth in wealth between 2002 and 2006 has been strong. The estimated mean net wealth of Australian households (at September 2006 prices) increased from $494,279 in 2002 to $664,867 in 2006 — a 35 per cent increase. Wealth is substantially more unequally distributed than income, but little change in wealth inequality was evident between 2002 and 2006. Wealth gains were thus widely distributed amongst the community. This reflects the fact that growth was primarily driven by increases in prices of owner-occupied houses. Comparing 2002 and 2006, the mean value of owner-occupied housing across all households (including non-home-owner households) increased from $256,911 to $343,547. Growth in superannuation balances was also a significant driver of wealth growth. Averaged across all people, household superannuation balances increased during that period by 29 per cent. Direct holdings of equity investments (shares) is a relatively small component of household wealth, but it is nonetheless notable that the mean value of these holdings increased by 28 per cent between 2002 and 2006.

Long Hours of Work and Its Consequences Professor Mark Wooden, Director of the HILDA Survey project, and Mr Markus Hahn, HILDA Research Officer, investigated two potential adverse implications

Page 4 - Melbourne Institute of Applied Economic and Social Research

The study is important because a relatively large fraction of Australian workers report working quite long work weeks — that is, 50 hours or more. This is of large significance given the widespread view that long hours of sustained work are harmful for both the workers concerned and their families. The study identifies no evidence within the HILDA Survey data that working long hour weeks is associated with an overall increase in the likelihood of marital separation. Notwithstanding that, the risk of separation seems to be higher among couples where the male works long hours than among couples where the male works a more traditional work week, however the size of this difference is both extremely small and inconsistent over time. As for the measure of unhealthy behaviour, the evidence is that long hours of work slightly promotes smoking among men (only), in that it acts as a barrier to quitting, however such effects are arguably weak.

This article, written by Dr Roger Wilkins, examines the incidence and factors associated with personal credit card debt. He examines how widespread credit card ownership is, what types of people own them and how credit card debt is related to income, wealth, age, education, health and other characteristics. The study found that the personal characteristics of individuals, including their financial circumstances, are not good predictors of how they got into credit card difficulty. The latest HILDA Statistical Report, Families, Incomes and Jobs, Volume 4, was prepared by Roger Wilkins, Diana Warren and Markus Hahn — researchers from the Melbourne Institute. An online version of the report, and earlier volumes, are freely available at <www. melbourneinstitute.com/hilda/statreport.html>. For enquiries on the HILDA Statistical Report contact Roger Wilkins on 03 8344 2092 or email <r.wilkins@unimelb.edu. au>.

Next HILDA Survey Research Conference The 2009 HILDA Survey Research Conference will be held on 16 and 17 July, at the University of Melbourne. The aim of the conference is to provide a forum for the discussion of research based on the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Attendance at the conference is open to all, but should be of special interest to people with an interest in the broad fields of economic and social policy. The Keynote Speakers will be: • Professor Robert Moffitt, Krieger-Eisenhower Professor of Economics, Department of Economics, Johns Hopkins University. His presentation will be entitled ‘Using Panel Data to Analyse Income Dynamics’. • Professor Stephen Pudney, Director, ESRC Research Centre on Micro-Social Change, Institute for Social and Economic Research, The University of Essex. His presentation will be entitled ‘Ask a Silly Question – and Get a Silly Answer?’ An additional 37 speakers, mainly from universities and leading public organisations, will present research-based findings on a range of topics. At the conference dinner on 16 July, the address will be made by Professor Bob Gregory, Emeritus Professor, Economics Program, Research School of Social Sciences, The Australian National University. The speakers and their topics can be viewed in the HILDA Conference program at <www.melbourneinstitute.com/conf/hildaconf2009/default.html >. If you would like to attend the conference, please contact Alice Hope at <ajhope@unimelb.edu. au>. The cost is $260 for two days with discounts for early-bird registrations and students.

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39761 MIAESR newsletter no 24

2/6/09

10:37 AM

Page 4

Latest Annual HILDA Statistical Report

Families, Incomes and Jobs, Volume 4

A Statistical Report on Waves 1 to 6 of the HILDA Survey

The report, released in early June by the Melbourne Institute, contains 36 articles based on analysis of data collected in the HILDA Survey during the period 2001 and 2006. The survey, also known as the ‘Living in Australia study’, is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs and is managed by the Melbourne Institute at the University of Melbourne. The HILDA Survey is Australia’s only large-scale nationally representative longitudinal household panel survey which interviews the same households and individuals each year. In each of the six waves of research, the survey has interviewed over 12,000 individuals. This enables the collection of evidence-based data on how peoples’ lives are changing over time, with a focus on issues relating to families, income, employment and well-being. Since 2005, additions to the HILDA sample have exceeded drop-outs, and by 2006 the sample size reached 12,905. The annual HILDA Statistical Report includes articles on how people respond to life events, at the time of the event and down the track, and how long they persist in certain modes of behaviour. Analysis of the HILDA data allows an insight into the causes and consequences of important life outcomes, such as poverty, unemployment, marital breakdown and poor health. As such, HILDA data are vital for government and public policy analysis. The HILDA data also stimulate a steady stream of academic papers and articles, and in January 2009 the cumulative number of HILDA data users reached 1,045. The latest Statistical Report provides a glimpse of the huge breadth of data collected in the HILDA Survey and comprises sections on key aspects of life in Australia, such as households and family life; incomes and economic well-being; labour market outcomes; and life satisfaction, health and well-being. The report also contains 16 articles that focus on topics heavily influenced by the new questions included in the sixth wave of the HILDA Survey, plus articles on changes in the government policy environment.

Credit Card Debt

of long hours of work — effects on relationship quality (as measured by marital separation), and the effects on unhealthy behaviours (as measured by smoking activity).

A wealth of information lies in the latest Annual Statistical Report of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, Families, Incomes and Jobs, Volume 4.

The HILDA Survey is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs

Three of the articles using Wave 6 data are as follows.

Levels and Changes in Household Wealth Dr Roger Wilkins, Deputy Director of the HILDA project, analysed the HILDA Survey data on household assets and debts to obtain a measure of household and individuals’ wealth. Findings show that the growth in wealth between 2002 and 2006 has been strong. The estimated mean net wealth of Australian households (at September 2006 prices) increased from $494,279 in 2002 to $664,867 in 2006 — a 35 per cent increase. Wealth is substantially more unequally distributed than income, but little change in wealth inequality was evident between 2002 and 2006. Wealth gains were thus widely distributed amongst the community. This reflects the fact that growth was primarily driven by increases in prices of owner-occupied houses. Comparing 2002 and 2006, the mean value of owner-occupied housing across all households (including non-home-owner households) increased from $256,911 to $343,547. Growth in superannuation balances was also a significant driver of wealth growth. Averaged across all people, household superannuation balances increased during that period by 29 per cent. Direct holdings of equity investments (shares) is a relatively small component of household wealth, but it is nonetheless notable that the mean value of these holdings increased by 28 per cent between 2002 and 2006.

Long Hours of Work and Its Consequences Professor Mark Wooden, Director of the HILDA Survey project, and Mr Markus Hahn, HILDA Research Officer, investigated two potential adverse implications

Page 4 - Melbourne Institute of Applied Economic and Social Research

The study is important because a relatively large fraction of Australian workers report working quite long work weeks — that is, 50 hours or more. This is of large significance given the widespread view that long hours of sustained work are harmful for both the workers concerned and their families. The study identifies no evidence within the HILDA Survey data that working long hour weeks is associated with an overall increase in the likelihood of marital separation. Notwithstanding that, the risk of separation seems to be higher among couples where the male works long hours than among couples where the male works a more traditional work week, however the size of this difference is both extremely small and inconsistent over time. As for the measure of unhealthy behaviour, the evidence is that long hours of work slightly promotes smoking among men (only), in that it acts as a barrier to quitting, however such effects are arguably weak.

This article, written by Dr Roger Wilkins, examines the incidence and factors associated with personal credit card debt. He examines how widespread credit card ownership is, what types of people own them and how credit card debt is related to income, wealth, age, education, health and other characteristics. The study found that the personal characteristics of individuals, including their financial circumstances, are not good predictors of how they got into credit card difficulty. The latest HILDA Statistical Report, Families, Incomes and Jobs, Volume 4, was prepared by Roger Wilkins, Diana Warren and Markus Hahn — researchers from the Melbourne Institute. An online version of the report, and earlier volumes, are freely available at <www. melbourneinstitute.com/hilda/statreport.html>. For enquiries on the HILDA Statistical Report contact Roger Wilkins on 03 8344 2092 or email <r.wilkins@unimelb.edu. au>.

Next HILDA Survey Research Conference The 2009 HILDA Survey Research Conference will be held on 16 and 17 July, at the University of Melbourne. The aim of the conference is to provide a forum for the discussion of research based on the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Attendance at the conference is open to all, but should be of special interest to people with an interest in the broad fields of economic and social policy. The Keynote Speakers will be: • Professor Robert Moffitt, Krieger-Eisenhower Professor of Economics, Department of Economics, Johns Hopkins University. His presentation will be entitled ‘Using Panel Data to Analyse Income Dynamics’. • Professor Stephen Pudney, Director, ESRC Research Centre on Micro-Social Change, Institute for Social and Economic Research, The University of Essex. His presentation will be entitled ‘Ask a Silly Question – and Get a Silly Answer?’ An additional 37 speakers, mainly from universities and leading public organisations, will present research-based findings on a range of topics. At the conference dinner on 16 July, the address will be made by Professor Bob Gregory, Emeritus Professor, Economics Program, Research School of Social Sciences, The Australian National University. The speakers and their topics can be viewed in the HILDA Conference program at <www.melbourneinstitute.com/conf/hildaconf2009/default.html >. If you would like to attend the conference, please contact Alice Hope at <ajhope@unimelb.edu. au>. The cost is $260 for two days with discounts for early-bird registrations and students.

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2009 Economic and Social Outlook Conference: ‘The Road to Recovery: Restoring Prosperity after the Crisis’

MABEL Longitudinal Survey of Australian Doctors: Initial Results

The Melbourne Institute and The Australian are pleased to host their sixth joint Economic and Social Outlook Conference on Thursday 5 and Friday 6 November 2009 at the University of Melbourne.

Initial results from the first wave of the MABEL longitudinal survey of Australian doctors — Medicine in Australia: Balancing Employment and Life — identify that nearly 10 per cent of Australian doctors plan to quit their work over the next five years.

The conference program is intended to facilitate a timely, wide-ranging debate over two days touching on major current economic and social policy issues relevant to managing the recovery from the global financial crisis while ensuring that Australia emerges better placed to meet its longer term challenges. Examples of these include: addressing pressing social issues such as those facing the newly unemployed and the socially excluded; what have we learnt from the financial crisis on how to manage cycles in Australia’s terms of trade or the adequacy of regulation?; and do we yet have the right approach to pricing carbon, or closing the gap in outcomes achieved for indigenous Australians, or maximising health and education for all, or achieving affordable housing, or addressing skills issues?

A panel of quality speakers is being assembled to ensure that this is the premiere such event in 2009. The consistent thread running through all our previous conferences has been that continued policy reform can enrich Australia’s overall well-being while providing opportunities for all. The format has established itself as the nation’s premiere economic and social public policy conference, providing a unique forum bringing together leading politicians, bureaucrats, academics and nongovernment organisation representatives. People wishing to attend the conference can make an expression of interest and be placed on the mailing list by completing the form at <www.melbourneinstitute.com/ conf2009/exp.html>. Enquiries can be made with Penny Hope, Functions Manager, at <melb-conf@unimelb.edu.au>, or by calling 03 8344 2151.

Upcoming Forum: China and the Global Financial Crisis

The MABEL research study is being conducted by the Melbourne Institute in collaboration with Monash University. The study is funded by a Health Services Research grant from the National Health and Medical Research Council (NHMRC). Initial results, launched on 23 April at the Melbourne Institute, contain information from over 10,500 doctors surveyed in 2008 — comprising 3,910 GPs, 4,603 medical specialists, 924 doctors enrolled in a specialist training program, and 1,072 non-specialist hospital doctors. Respondents are broadly representative of all Australian doctors in terms of age, gender and geographic location.

The next Melbourne Institute Economics Forum in Melbourne will be held on Monday 20 July 2009, and the theme will be on China’s response to the global financial crisis, and its effects on China’s interaction with the international economy.

Presentations will be made by Professor Ross Garnaut, The University of Melbourne; Professor Yiping Huang, Professor of Economics at the China Centre of Economic Research at Peking University; Dr Guonan Ma, Chief Economist for Asia at the Bank of International Settlements; and Dr Ligang Song, Director of the China Economy and Business Program at The Australian National University.

Do Patents Matter for Commercialisation? In February this year, the conference ‘Commercialising Inventions — What’s the Story?’, jointly hosted by the Intellectual Property Research Institute of Australia (IPRIA) and the Australian Institute of Commercialisation, looked at a range of issues and recent evidence on the development of inventions, and how efficiently they are commercialised. Presentations and videos of selected speeches can be viewed at <www.ipria.org/events/2009/CommInventions.html>. A related Working Paper, written by Professor Beth Webster and Dr Paul Jensen, analysed survey data on 3,736 Australian inventions which were the subject of a patent application between 1986 and 2005. Results include: first, patents play only a modest role in the commercialisation of inventions; second, many unpatented innovations were nonetheless commercialised, meaning that patents (alone) are neither a necessary nor sufficient condition for commercialisation. By 2007 there was only a modest difference between where a patent had been granted compared to total patent applications, in the proportion of inventions that reached commercialisation. Full results are shown in the Working Paper at <www. melbourneinstitute.com/publications/working/wp2009.cfm>. Page 6 - Melbourne Institute of Applied Economic and Social Research

Almost 12 per cent of GPs and 13 per cent of specialist doctors intend to quit medical work within the next five years, largely driven by their expectations to retire. This proportion would equate to the loss of around 2,500 GPs and 2,500 specialists in Australia.

Specialist doctors are the most likely to be satisfied with their work, followed by doctors enrolled in specialty training programs, then GPs. However, around a quarter of all doctors are dissatisfied with their hours of work. For specialists and GPs, men are more likely to be dissatisfied with their hours of work than women.

Further data analysis is being undertaken over the next few months to learn more about the determinants of doctor preferences, intentions and labour supply. Results and publications will progressively be posted on the MABEL website: <www.mabel.org.au>. De-identified research data will be made available from July to be used by other researchers, PhD students, government and medical organisations. The MABEL project is endorsed by 34 specialty medical colleges, associations and training organisations, including recent endorsements by the Royal Australian College of General Practitioners and the Australian College of Emergency Medicine. The full list is on <www.mabel.org. au/endorse.html>.

China’s economic growth suddenly slowed in the second half of 2008, as international credit markets froze and world trade slumped. The authorities responded with the largest monetary and fiscal expansions of any economy in the current global recession, and probably of any economy ever. Real economic activity has responded strongly to the stimulus. The main questions are about longer term effects of stimulatory policies.

The Forum will be held at the Grand Hyatt Melbourne. Registration forms are available from <www.melbourneinstitute.com/forums/bus_ forums.html>. For all enquiries please contact Alice Hope at <ajhope@unimelb.edu.au>.

Initial results from Wave 1 of the MABEL Survey cover a breadth of doctors’ attitudes and intentions. The following are a few top-line results from Wave 1:

Speakers at the launch (from left): Professor Jim Best, Chair, NHMRC Research Committee; Professor Anthony Scott, Head of Health Economics Research Program and Principal Investigator of MABEL, Melbourne Institute; Professor Gordon Whyte, Head, School of Rural Health, Monash University; Professor Margaret Abernethy, Dean, Faculty of Economics and Commerce, The University of Melbourne; Professor Stephen Sedgwick, Director, Melbourne Institute.

Professor Tony Scott, Principal Investigator on the MABEL project, said, “Doctors’ decisions about where to work, how many hours to work, and what to do with those hours when at work have profound implications, not only for their own and their families happiness and well-being, but also for the health of the population. MABEL is about providing a better understanding of what factors influence these decisions.”

Further information on the MABEL Survey can be obtained from the Principal Investigator, Professor Tony Scott, on 03 8344 2115, or from the MABEL Survey Manager, Anne Leahy, on 03 8344 2600.

The MABEL team: Back row (from left): Dr Matthew McGrail, Dr Sung-Hee Jeon, Terence Cheng, Professor John Humphreys, Associate Professor Guyonne Kalb, Dr Stefanie Schurer, Michelle McIsaac, Daniel Kuehnle, Peter Sivey. Front row (from left): Dr Catherine Joyce, Durga Shrestha, Professor Tony Scott, Anne Leahy, Michelle Wilson.

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Better Evidence About What Works in Schools? (continued) sociologists and school practitioners predominate. Disputes about pedagogy (for example, the use of whole language versus phonics in teaching), and sometimes seemingly ideological disputes about the merits of public versus private education, capture much attention. Issues concerning opportunity costs (the benefits forgone by applying resources in their best alternative use), the principles of good resource allocation, the analysis of explicit and implicit incentives structures and their implications for decision making, and the calculation of rates of return are all areas in which economics has welldeveloped theoretical and empirical tools. The gains from applying these tools, and economic perspectives, are likely to be lost if economists remain disengaged or, worse, if their knowledge is unwelcome. Effective empirical research is built on quality data, amongst other things. Almost all relevant school performance data are administrative in nature and held by school authorities, state or non-government. For many years scores achieved by students in nationally consistent tests were only published at very high levels of aggregation, namely at the level of the state or territory. Data may have been available to parents and/or to school communities about the performance of their child (children) but were only selectively available to researchers in a form that permits serious analysis. Recent COAG reforms, however, present an opportunity to significantly improve access by interested researchers to quality data. New national testing arrangements allow each state, territory and school system to deposit the results of each child (together with some important background information regarding each school) in a national database to be maintained by the Australian Curriculum, Assessment and Reporting Authority (ACARA). COAG’s National Education Agreement requires ACARA to manage school assessment data and publish “relevant, nationally comparable information on all schools” to allow performance comparisons of like schools etc. Researchers may in future gain access to the underlying unit record data, but only with the approval of the departments of education. The risk is that economists may be excluded from the group granted such access, and would thus have little incentive to learn the idiosyncrasies of unfamiliar datasets in order to establish their credentials for such work. Moreover, officials will continue to control the research agenda, with the risk that only “acceptable” projects (especially ones bearing minimal political risk) will be supported. Yet we need fresh, frank and fearless minds applied if we truly wish to

establish how most cost effectively to improve education outcomes for every child, leaving none behind. A less restrictive approach to research could tap into more minds and different perspectives. We can learn from experience with the Household, Income and Labour Dynamics in Australia (HILDA) Survey, the Longitudinal Survey of Australian Youth (LSAY) and the Longitudinal Study of Australian Children (LSAC). These are longitudinal surveys that enable researchers to observe different groups of individuals or households over time. A wealth of data has been collected about the circumstances of individuals (for example, their personal attributes, family situation, finances, health) and the choices they make. A design feature of these surveys is that access to confidentialised unit record data is reasonably open to bona fide researchers. Reflecting the diversity of the researchers, a wide range of issues is examined and debated (in the case of HILDA see, for example, <www.melbourneinstitute. com/hilda/Biblio/default.html>). By its very nature this research is depoliticised; that is, the government can learn from it, but neither controls it, nor is responsible for it. Equally important, longitudinal data allow researchers to track changes in the circumstances of individuals over time, yielding insights not possible with the crosssectional data typically collected previously. The establishment of ACARA and the new national reporting arrangements present a unique opportunity to establish a quality longitudinal dataset of student test results with supporting background information etc, and an opportunity to introduce reasonably open access to the dataset for genuine researchers, including economists, interested in examining how to improve school students’ outcomes. Properly implemented, this could stimulate the application of powerful new tools for analytical work — for example, to explore links between family or personal attributes, teacher qualifications or methods, school characteristics, and student test performance over time. However, it will not be costless to establish this resource and to render it accessible while protecting privacy. Like the other longitudinal surveys it would therefore seem advisable to draw a sample and tap expert opinion to ensure that the quality and type of background data being collected are adequate for robust analytical work. The result could provide a useful specialised complement to the existing longitudinal surveys and could attract a wider range of researchers than have traditionally worked in schools research in Australia.

New Report: The Global Proxy – Melbourne Institute Shareholder Confidence Index™ The Melbourne Institute’s Applied Macroeconomics research program has now added an additional Index to its range of sponsored reports. The Global Proxy – Melbourne Institute Shareholder Confidence Index was launched in late May with sponsor Global Proxy Solicitation Pty Ltd (GPS). The Index is a summary balance measure of shareholders’ confidence in the Australian share market. It is based on shareholders’ assessment of three factors: returns, volatility and trading intentions (whether to buy or sell). The Index is designed for easy interpretation — a value below 100 is suggestive of ‘bearish’ sentiments while a value above 100 is suggestive of ‘bullish’ sentiments.

The Global Proxy – Melbourne Institute Shareholder Confidence Index TM

The first survey was conducted during March 2009 and the latest survey was conducted during the first week of May 2009. The Global Proxy – Melbourne Institute Shareholder Confidence Index increased by 10.1 per cent in May to 106.5, from 96.7 in March 2009.

Inaugural Issue May 2009

Whilst the indices for trading intentions suggest that activity in the share market will remain subdued for a while, they also reveal the dominance of buying intentions over the next few months. Shareholders’ future trading intentions indicate an appetite for exposure to energy, financials, metals and minerals and utilities. Further details on the new report are available at <www.melbourneinstitute.com/ publications/>. Enquiries can be made with Professor Guay Lim on 03 8344 2146, or by email <g.lim@unimelb.edu.au>.

Getting the Skills Australia Needs Leading academics and business people gathered during March for the Melbourne Institute Economics Forum on the theme “Getting the Skills Australia Needs”. The Forums, held in Canberra and Melbourne, stimulated discussion on the vocational education and training system in Australia, and explored questions of how well the system develops the skills of our labour force, and how successfully it matches skills to jobs to satisfy the needs of our economy. Chairing the Public Economics Forum in Canberra was Professor Stephen Sedgwick, Director, Melbourne Institute. At the Melbourne Economics Forum the Chair was Mr Tony Cole, Business Leader for Investment Consulting in Asia Pacific, Mercer (Australia) Pty Ltd. Speakers at the Canberra Forum were Dr Chris Ryan, Director, Social Policy Evaluation Analysis and Research Centre (SPEAR); Ms Megan Lilly, Associate Director, Education and Training, Australian Industry Group; and Professor Kostas Mavromaras, Melbourne Institute. Speakers at the Melbourne Forum were Dr Tom Karmel, Managing Director, National Centre for Vocational Education Research; Mr Patrick Coleman, Director Policy,

Business Council of Australia; and Professor Kostas Mavromaras, Melbourne Institute. Dr Ryan presented research on how the core skills of literacy and numeracy have been utilised at work; Ms Lilly presented evidence from employer and employee surveys; Dr Karmel provided an overview of the contribution of VET to the skills-base in Australia; and Mr Coleman suggested that greater emphasis is needed on general skills such as communications, teamwork and planning. Professor Mavromaras focused on the degree of upskilling that would be necessary for Australia to achieve a skills-mix similar to that of comparator/competitor countries. He suggested we need a general shift in workers from the lowest skills levels, and those lacking useful qualifications, to a status of higher skills and with at least some qualification relevant to their labour market aspirations. He argued that the role of vocational training and education is pivotal for such a change. Electronic copies of the speakers’ presentations made at the Forums can be viewed at <www.melbourneinstitute.com/ forums/>.

Stephen Sedgwick Director, Melbourne Institute

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Recent 2009 Melbourne Institute Working Papers 13/09 12/09 11/09 10/09 9/09 8/09 7/09

‘What Governs Firm-Level R&D: Internal or External Factors?’ William Griffiths and Elizabeth Webster ‘Identifying Corporate Expenditures on Intangibles Using GAAP’ L.C. Hunter, Elizabeth Webster and Anne Wyatt ‘Tax Policy and the Globalisation of R&D’ Russell Thomson ‘Tax Policy and R&D Investment by Australian Firms’ Russell Thomson ‘Macroeconomic Conditions and Successful Commercialization’ Paul Jensen and Elizabeth Webster ‘Do Patents Matter for Commercialization?’ Elizabeth Webster and Paul Jensen ‘Working Credits: A Low-Cost Alternative to Earned Income Tax Credits?’ Andrew Leigh and Roger Wilkins

Melbourne Institute News June 2009 ISSN 1442-9500 (print)

ISSN 1442-9519 (online)

Working Paper: Measuring Poverty and Social Exclusion in Australia This Working Paper by Rosanna Scutella (Melbourne Institute and Brotherhood of St Laurence), Roger Wilkins (Melbourne Institute) and Michael Horn (Brotherhood of St Laurence) addresses the need to establish a robust measure of socio-economic disadvantage to determine the extent of social exclusion (or ‘being poor’) that is occurring in Australian society.

The Working Paper (4/09) is available from the Melbourne Institute’s website at <www.melbourneinstitute.com>.

Australian Economic Review: June 2009 Issue The latest issue of the Melbourne Institute’s quarterly Australian Economic Review (vol. 42, no. 2) will be released in June. The lead article in the Australian Economic Review is ‘Reflection on Microeconomic Policy Frameworks in Australia, and a Suggestion about Fairness’, by Jonathan Pincus. This article was presented at the Inaugural Department of Economics – Melbourne Institute Lecture on Public Policy, in October 2008. The Policy Forum section of this issue includes three articles on urban transport. The June issue also contains a survey article on ‘Measures of Household Wealth for Australia’, by Paul Bloxham and Thomas Betts, which describes and compares the four main sources of household wealth data for Australia. These include two time-series measures and two survey-based measures of the distribution of wealth, one of which is based on data from the HILDA Survey. In the ‘For the Student’ section, Jeff Borland has contributed an article entitled ‘What Happens to the Australian Labour Market in Recessions?’ More information on the Australian Economic Review can be found on the Melbourne Institute’s website at <www. melbourneinstitute.com>.

Melbourne Institute News Views expressed by the contributors to Melbourne Institute News are not necessarily endorsed or approved by the Melbourne Institute. Neither the Melbourne Institute nor the Editor of Melbourne Institute News accepts any responsibility for the content or accuracy of information contained in this publication. Editor: Cliff Howard tel: 03 8344 2154, fax: 03 8344 2111, email: howardc@unimelb.edu.au. Sub-Editor: Nellie Lentini. Contributors: Professor Ross Garnaut, Ms Penny Hope, Dr Paul Jensen, Professor Guay Lim, Professor Kostas Mavromaras, Professor Tony Scott, Dr Rosanna Scutella, Professor Stephen Sedgwick, Associate Professor Beth Webster, Dr Roger Wilkins, Professor Mark Wooden.

Level 7, Alan Gilbert Building, The University of Melbourne P: (613) 8344 2100 F: (613) 8344 2111 www.melbourneinstitute.com

Issue 24

Better Evidence About What Works in Schools?

Working Papers can be download for free from <www.melbourneinstitute.com/publications/working/wp2009.cfm>. If you would like to receive an email notification when new Working Papers become available, contact the Melbourne Institute on <melb-inst@unimelb.edu.au>.

The authors propose a framework for measuring poverty and social exclusion and discuss issues that need to be resolved to arrive at valid and useful indicators or measures. The framework distinguishes seven categories (or ‘domains’) for the measurement of poverty and social exclusion: material resources (e.g. household assets/income); employment; education and skills; health and disability; social factors (e.g. support from others); community (e.g. access to community services); and personal safety. In each category, specific indicators of social exclusion would need to be developed, taking into account measurability, objectivity and parsimony.

Print Post Approved PP381667/01204

MABEL Longitudinal Survey of Australian Doctors Initial results from the MABEL longitudinal survey of Australian doctors — Medicine in Australia: Balancing Employment and Life — identify that nearly 10 per cent of Australian doctors plan to quit their work over the next five years. Page 3

Latest Annual HILDA Statistical Report A wealth of information lies in the latest Annual Statistical Report of the Household Income and Labour Dynamics in Australia (HILDA) Survey, Families, Incomes and Jobs, Volume 4. Page 4

Getting the Skills Australia Needs The March Melbourne Institute Economics Forums discussed the vocational education and training system in Australia. Page 7

The evidence base for many opinions about schools is either unclear or dominated by personal experience (possibly inaccurately recalled) or conditioned by contemporary experiences of our children. And, unlike in the United States, economists are largely absent from this debate in Australia. A recent Council of Australian Governments (COAG) agreement, however, provides a unique opportunity to address both issues. Reform of schooling has figured prominently in national policy debates for two decades. The objective is to maximise outcomes for all school students at all ability levels, regardless of family circumstances. In the language of economists, success will increase Australia’s human capital and long-term productivity growth, which help to counteract the inevitable drag on living standards likely to accompany an aging population. Although few economists research school education in Australia, they are well represented in other important areas of the human capital agenda such as health. There is a small but influential cadre of economists who work alongside clinicians and others to research issues such as the health workforce, incentive structures and payments mechanisms (which can affect the behaviour of patients, medical practitioners and medical institutions such as hospitals), and the effectiveness of health programs. In the United States, schooling reform is viewed as a multi-disciplinary issue which involves not only practitioners but also engages think tanks such as the Brookings Institution and a range of economists including James Heckman, a Nobel laureate in economics prominent (though frequently misrepresented) in the debate about early childhood education. In Australia however, members of education faculties, some Continued on page 2

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