Changes in the labour force status of lone and couple Australian mothers, 1983-2002
Introduction
There is currently a great deal of policy and community concern about the growth in the number of families with children in which no adult is employed. A substantial part of the increase in the number of job poor families is the result of the increase in the number of lone-parent families, which have a higher rate of joblessness than couple families (Gregory 1999). It seems that many lone mothers in Australia are spending long periods of time in receipt of government payments. Recent research suggests that when the movements from one payment type to another are taken into account, the total amount of time spent in receipt of welfare payments is much longer and that the potential for "welfare dependency" is greater than previously thought (Gregory 2002).1
The relatively low rates of employment of lone mothers have long been a policy concern. In the 1970s it was noted that lone mother families experienced high rates of poverty and the policy remedy was seen as adequate social security provision (Henderson, Harcourt and Harper 1970). By the 1990s the policy remedy had shifted to supplementing the pension with income from other sources, primarily income from employment (Shaver 1998). The most recent review of the social security system emphasised the importance of paid employment (McClure 2000).
As well as examining the lower rates of employment at a particular point in time it is important to consider trends in employment over the longer-term. Over the last twenty years the employment rate of lone mothers has increased from 32.1 per cent in 1983 to 47.8 per cent in 2002. The increase for couple mothers has been from 42.1 per cent in 1983 to 62.9 per cent in 2002. This means that, despite increasing employment levels among lone mothers, the size of the employment gap relative to couple mothers has slightly increased.
Although the growth in employment for lone and couple mothers has been of a similar magnitude over the last twenty years, the growth in part-time and full-time employment has been dramatically different. For lone mothers, the majority of the increase in employment has been in part-time employment, with the rate of full-time employment increasing between 1983 and 1988 and declining thereafter. In contrast, couple mothers have had similar rates of growth in part-time and full-time employment.
This rapid growth in part-time employment of lone mothers has occurred over a period in which the income support system has increasingly allowed mothers to combine part-time employment with the receipt of government income support. The result is an increase in the proportion of lone mothers who are both working part-time and receiving government income support.2
There are a number of possible explanations for the much higher rate of growth of part-time than full-time employment of lone mothers. One explanation relates to the financial incentives generated by the income support system. A second is that the characteristics of the lone mother population have changed in such a way as to explain the decline in full-time employment and increase in part-time employment. A third set of explanations relates to changes in the preferences for part-time versus full-time employment for lone and couple mothers.
The aim of this paper is to document the labour market experience of lone and couple mothers over the period 1983 to 2002. Models of the determinants of labour force status of lone and couple mothers are estimated using data from the 1986 and 1996 Censuses. The results of these models are used to explore the possible explanations for the changes in labour force status of Australian mothers.
The rest of the paper is structured as follows. The next section documents the labour market experience of lone and couple mothers over the period 1983 to 2002. The third section, discusses the conceptual model and empirical specification used to estimate the determinants of employment. In the fourth section, the results of the statistical modelling are discussed. The discussion focuses on how the determinants of labour force status have changed over time and whether this differs for lone and couple mothers. The fifth section presents the results of a decomposition of the sources of the changes in labour force status. The final section draws conclusions based on these analyses.
1. This finding is consistent with work by Chalmers (1999) that there is a high incidence of repeat use of the Sole Parent Pension (now called Parenting Payment) with 65 per cent of lone parents returning to some form of income support (43 per cent returned to Sole Parent Pension).
2. In June 2001, 26.2 per cent of lone parents receiving a pension payment (Parenting Payment Single) reported having earnings (Department of Family and Community Services 2001). The combination of relatively high minimum wages, relatively generous income test tapers, and the provision of in-work benefits means that many lone mothers in Australia combine part-time employment with continued receipt of government income support (Whiteford and Angenent 2001).
