Influences on Indigenous labour market outcomes

Key points:   This paper uses data from the 2008 National Aboriginal and Torres Strait Islander Social Survey (NATSISS) to model the links between various personal characteristics and activities, and four Indigenous labour market outcomes. As causality may run in either direction, results are interpreted as associations. Results typically differ between men and women, in part because of different responsibilities in relation to child rearing, broader family responsibilities and other specialisation in unpaid work. Of these differences, the most notable were those for educational attainment. Results suggest that for women, attainment of year 10 or above is associated with a higher probability of employment and labour force participation, whereas this is less evident for men. Results confirm findings from previous research that other human capital factors, such as good health, are positively associated with Indigenous employment and labour force participation. Arrest and imprisonment were found to be negatively associated with Indigenous employment and labour force participation. A history of arrest was found to have a larger negative association with employment for women compared to men. Models that omit personal characteristics that might determine an individual’s labour supply (such as ability, motivation and preferences) are likely to produce biased estimates of the effect of the human capital factors that are included in the model (such as education, health and disability).   One benefit of including variables in the model that represent cultural and social engagement is that they may act as proxies for unobserved personal characteristics, reducing the impact of this source of bias. The cultural and social engagement factors were found to have statistically significant associations with Indigenous labour market outcomes for women, but not for men. For women there were positive associations between employment and labour force participation, and engagement in social cultural events and the provision of support outside the household. A greater understanding of the links between social capital and labour market outcomes could be explored using alternative econometric models. However, there are limits to the indicators that can be derived from the data