Housing, location and employment
Bruce Bradbury and Jenny Chalmers
Social Policy Research Centre
Contact Email:   b.bradburyunsw.edu.au

What determines the choice of residential location for workforce-age income support recipients? Does location matter for employment outcomes? This presentation describes the results of a project undertaken for the Australian Housing and Urban Research Institute. This project examined these
two questions using the Department of Family and Community Services Longitudinal Data Set.

The first part of the project examined the determinants of locational choice. The main issues investigated were the role of housing costs and labour market conditions. Though most moves occur for other reasons, we find that there is a small net movement of unemployment payment recipients to
areas of better labour market opportunities. For unemployment payment recipients, an increase in the "travel region unemployment rate" of a region by one percentage point is associated with an increase in the net outflow per annum of around one per cent of the recipients in the region (holding
housing costs constant). A similar relationship exists for both short and long duration unemployment payment recipients. The short duration unemployed also tend to move towards larger labour markets. For non-unemployment payment recipients, there is no significant relationship between labour market conditions and net flows.

The second part of the project investigated the impact of movement between different regions on labour market outcomes for unemployment payment recipients. Using a spell-duration model we find that a one-percentage point increase in the travel region unemployment rate is associated with a 5 per cent drop in the probability of exit from benefit. Part of this association could be due to unobserved but correlated variables. In particular, people with lower skill levels might tend to live in areas with higher unemployment rates. To control for this, we also estimate a model examining the change in benefit experience before and after moves. Here we find that moving to an area with a one percentage point higher travel region unemployment rate leads to an increase in income support receipt of about 2 per cent. Though this estimation does suffer from some potential selection bias, the balance of evidence does suggest that location does matter for employment outcomes.

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