2002 Annual Report - Melbourne Institute by The Faculty of Business and Economics, The University of Melbourne

MELBOURNE INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH

Annual Report 2002 and Outlook 2003â&#x20AC;&#x201C;2004

Melbourne Institute of Applied Economic and Social Research Level 6, Economics and Commerce Building The University of Melbourne Victoria 3010 Australia Phone: +61 3 8344 5330 Fax: +61 3 8344 5630 Email: melb-inst@unimelb.edu.au WWW: http://www.melbourneinstitute.com

ÂŠ2003 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research. COPYRIGHT: All rights reserved. Apart from fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright Act 1968, no part of this publication may be reproduced, stored or transmitted in any form or by any means without the prior permission in writing of the Publisher. ISSN 1441-1423 (Print) ISSN 1447-8080 (Online) Various photos by The University of Melbourne, Les Oâ&#x20AC;&#x2122;Rourke Photography and The Australian. Printed and bound by Impact Printing.

CONTENTS Some Highlights

Introduction to the Melbourne Institute

Directorâ&#x20AC;&#x2122;s Report

Outlook for 2003 and 2004

Staff, Associates and Research Students

Advisory Board

Research Areas

Towards Opportunity and Prosperity Conference, 2002

Pursuing Opportunity and Prosperity Conference, 2003

Contributions to Policy Analysis and Debates

Melbourne Institute Business Economics Forum in Melbourne

Melbourne Institute Public Economics Forum in Canberra

Melbourne Instituteâ&#x20AC;&#x2122;s 40th Anniversary

Publications by Subscription

Staff Publications, Seminars, Presentations and Media Coverage, 2002

Finance and Performance Indicators

SOME HIGHLIGHTS • Major economic and social outlook conference, Towards Opportunity and Prosperity (jointly organised with The Australian), attracts 400 attendees • Second wave of data collected in longitudinal survey (HILDA) about living in Australia • Major conference organised on findings from the first wave of HILDA data

Senator Amanda Vanstone launches the release of the HILDA data

• Social Policy Research Contract with the Department of Family and Community Services produces a stream of policy-relevant research output • Intellectual Property Research Institute of Australia (IPRIA) starts operations with a major role for the Melbourne Institute • Melbourne Institute’s economic indicators and forecasts continue to be closely watched • A number of Melbourne Institute researchers present papers at important international conferences • Relationships maintained and extended with relevant private and public organisations and community groups such as Westpac, Mercer Investment Consulting, IBISWorld, ING, TD Securities, Reserve Bank of Australia, Department of Family and Community Services, Department of Employment, Workplace Relations and Small Business, Productivity Commission and the New Zealand Treasury

Mr Paul Kelly and Professor Peter Dawkins at the launch of Hard Heads, Soft Hearts

• Professor Peter Dawkins and Mr Paul Kelly (Editor-at-Large, The Australian) edit a book based upon the 2002 Towards Opportunity and Prosperity Conference, called Hard Heads, Soft Hearts: A New Reform Agenda for Australia, released early in 2003 Dr Brendan Nelson addressing the Towards Opportunity and

• The Melbourne Institute celebrated its 40th Prosperity Conference anniversary in December 2002 which was followed, in February 2003, by a celebratory dinner at which Hard Heads, Soft Hearts was launched

Performance Indicators Melbourne Institute performance indicators registered increases in: • • • •

Refereed journal articles Public research grants Total external research income References to the Melbourne Institute in the media (recorded at 956)

Melbourne Institute staff published 27 articles in refereed journals including Economic Record, Australian Journal of Labour Economics, Australian Economic Review, Australian Social Monitor, People and Place, International Journal of Public Opinion, Journal of Hematotherapy and Stem Cell Research, Journal of Monetary Economics, World Economy, Australian Bulletin of Labour, Soviet and Post-Soviet Review, Singapore Medical Journal, Family Matters and Economic and Labour Relations Review.

Figure 1: Growth of External Research Income

External Research Income ($million)

5.99

6 4.60

4.73

4 3 2

1.23

1.37

1998

1999

1.98

1 0 2000

2001 Year

2002

2003

projected

INTRODUCTION TO THE MELBOURNE INSTITUTE Vision, Mission, Focus, History and Strategic Objectives Vision The Melbourne Institute aims to be a major institute of applied economic and social research that is nationally and internationally renowned in academia, government, business and community groups, and which: • promotes a deeper understanding and discussion of economic and social issues of national significance; • fosters effective responses to these issues through research that identifies alternative policy responses and quantifies their likely effects; and • combines rigorous economic and social analysis with a genuine attachment to the Australian community’s concern for the less well off. Accordingly our vision is to be ‘hard-headed but soft-hearted’.

Mission In seeking to achieve this vision the Melbourne Institute’s central mission is: • to undertake world-class independent and impartial applied economic and social research and policy analysis, on major issues relevant to Australia; provide highly valued products and services for business, government and community groups; and provide research training for emerging economic and social researchers. • to use our research to foster informed discussion and debate amongst academics, policy makers, business and community groups, through publications, conferences, forums and the media. In pursuing this mission the Melbourne Institute will also undertake internationally collaborative research and will seek to develop intellectual property that may be transferred to other parts of the world.

Focus Unifying Theme The unifying theme of the Melbourne Institute’s research agenda is to examine the determinants of both economic performance and social outcomes, and to explore the mutual relationship between the two. Expertise and Intellectual Property The Melbourne Institute’s expertise and intellectual property lie in: • economic and social modelling; • economic and social surveys and indicators; and • economic and social policy analysis. Research Programs Our current research programs are in the following areas: • applied macroeconomics; • labour economics and social policy; and • applied microeconomics. While our core discipline is, and will remain, economics, we plan to engage with other disciplines including sociology, statistics, management, accounting, finance, demography and others.

History The Melbourne Institute was formed in 1962 under the leadership of Professor Ronald Henderson. It was the first economics research institute in an Australian university. Henderson built up an organisation with over 40 staff by the early 1970s. It engaged in a wide range of research areas including macroeconomic forecasting, financial economics and social economics, and is best remembered for its work on poverty and the development of the ‘Henderson Poverty Line’. After the Henderson era, Professor Peter Dixon was appointed Director and after some restructuring, the new Institute based its operation around Dixon’s ORANI model of the Australian economy. In the early 1990s, Peter Dixon and a number of his senior colleagues left the Institute to join Monash University. This necessitated a second period of adjustment and restructuring initiated by Professor Richard Blandy who was Director from 1992 to 1994. The current Director, Professor Peter Dawkins, commenced in January 1996 and a five-year strategic plan was developed to raise the Institute’s profile in academia, business, government and the community sector. The unifying theme of its research agenda was the link between economic performance and social outcomes. Since 1996 the Institute has more than doubled in size on a range of measures (staff, revenue, publications, media references etc.). Peter Dawkins has been appointed for a second five-year period (2001 to 2005) and a new strategic plan has been developed. The Institute now operates in three research areas: applied macroeconomics; labour economics and social policy; and applied microeconomics. In the new strategic plan the Institute aims to achieve a national and international reputation for excellence in its ‘hard-headed but soft-hearted’ economic and social research, and to continue contributing strongly to public policy discussion. In pursuing this agenda, it plans to continue growing in size. In 2002 its income was over $5.7 million and it employed about 37 staff.

Strategic Objectives The Melbourne Institute aims: 1. to consolidate and build on our strength and reputation in the two areas of: • applied macroeconomics, • labour economics and social policy; 2. to build upon the foundations laid in recent years in the following areas of applied microeconomics: • industrial economics, • economics of education, • economics of health; 3. to enhance our reputation in academia for high quality research output and research training in applied economic and social research and to foster a scholarly research environment; 4. to engage with policy makers, business and community groups, contributing strongly to economic and social debates and policy discussion and development in Australia, through publications, conferences, seminars, forums and other relevant means; 5. to strengthen the Melbourne Institute as a supportive workplace for outstanding staff; 6. to achieve continuous quality improvement in the academic and administrative management of the Melbourne Institute; and 7. to enhance the financial viability of the Melbourne Institute to ensure that it has a resource base which enables it to best achieve its research and community development objectives.

DIRECTOR’S REPORT Introduction 2002 was another year of growth for the Melbourne Institute. Annual income approached $6 million and is expected to exceed this in 2003. Our two major contracts with the Department of Family and Community Services were in their second year and the Melbourne Institute’s contribution to research on social policy flourished. The establishment of the Intellectual Property Research Institute of Australia (IPRIA), an inter-faculty centre at the University of Melbourne, was a major development for the Melbourne Institute. Our research, forecasting and indicators in applied macroeconomics also continued to develop. The major event of the year was our first joint Economic and Social Outlook Conference, with The Australian, entitled ‘Towards Opportunity and Prosperity’. This brought together over 400 participants, with about 80 of them leading the discussion. They came from politics (including Federal Cabinet Ministers, Shadow Cabinet Professor Peter Dawkins Ministers and a State Premier), the public service (for example, the Governor of the DIRECTOR Reserve Bank, the Secretary of the Treasury and the Chairman of the ACCC), business (for example, the President of the BCA, Dr John Schubert, and the then Chairman of AMP, Mr Stan Wallis), trade unions and community groups (for example, Ms Sharan Burrow of the ACTU and Father Nic Frances of the Brotherhood of St Laurence). This was in addition to leading academics from Australia and overseas. This is reported more fully later in this annual report. We also celebrated the 40th anniversary of the Melbourne Institute with a staff reunion in December, followed by a major dinner at Ormond College in February 2003.

Hard Heads, Soft Hearts In the second half of the year I had the good fortune to be awarded four months of study leave, spent mostly at the University of Nottingham in the United Kingdom with shorter visits to the Austrian Institute of Economic Research and the Brookings Institution in Washington DC. My main focus was to complete the editing of a book with Mr Paul Kelly, Editor-at-Large of The Australian. This book was based upon the proceedings of the Towards Opportunity and Prosperity Conference. The title of the book incorporates the motto of the Melbourne Institute, adapted from the writings of nineteenth century British economist Alfred Marshall and twentieth century US economist Alan Blinder. As well as reprinting extracts from the conference papers and canvassing a wide range of economic and social policy issues, Paul Kelly and I put forward our view of the way forward for Australia. The central message is that momentum needs to be maintained on economic reform, but policy needs to place increasing emphasis on the human dimension. In so doing we need to be more successful in combining the economic success story with social and environmental policy progress.

Staffing and Adjunct Appointments We welcomed a considerable number of new staff in 2002. Associate Professor Tim Fry joined the Melbourne Institute as a Principal Research Fellow; Dr Ben Jensen and Dr Jongsay Yong joined as Research Fellows; Ms Kelly Jarvis, Mr Tim Watts and Ms Diana Warren joined as Research Officers; and Ms Kerry Ware joined as a Research Assistant. In 2003 Associate Professor Bruce Headey (a current Honorary Principal Fellow with the Melbourne Institute) was appointed as Principal Research Fellow and Deputy Director of the HILDA project; Dr Hielke Buddelmeyer, Dr Lixin Cai and Mr Paul Jensen were appointed as Research Fellows; Ms Vu Thi Hong Ha and Mr Ben Methakullawat were appointed as Research Officers; Ms Angie Cumming and Ms Claire Merlo joined the administrative team; and Mr Nikos Thomacos was appointed as the new Business Manager. We have farewelled the following staff in 2002â&#x20AC;&#x201C;2003: Associate Professor Tim Fry, Dr Mark Harris, Dr Ben Jensen, Dr Joanne Loundes, Dr Joanna Sikora, Ms Kelly Jarvis, Mr Tim Watts, Ms Fiona Zammit, Mr Jean-Luc Garlick, Ms Karen Roe and Ms Lara Hammond. New honorary appointments in 2002 were Dr John Nieuwenhuysen as Principal Fellow, and Dr Denise Doiron and Dr Michael Shields as Senior Fellows. In 2003 additional appointments were Professor Ross Williams and Professor Robert Drago as Professorial Fellows and Associate Professor Sandra Hopkins as a Senior Fellow. The full complement of staff is listed in this annual report.

Advisory Board I would like to thank Dr Peter Jonson for his important contribution as Chairperson of the Advisory Board, a position he retired from at the end of 2002. His contribution to the Advisory Board over the last 10 years has been invaluable and we thank him for the time and effort he has provided. Dr Peter Jonson has been appointed Emeritus Chairperson of the Board. Mr Tony Cole from Mercer Investment Consulting has been appointed the new Chairperson of the Board from 2003. I would also like to thank the rest of the Advisory Board for their contribution during 2002.

Administrative Staff and Technical Support I would like to take this opportunity to thank the administrative and technical support team who play very important roles in ensuring the smooth operation of the Melbourne Institute. Also, I would like to thank them for the tremendous effort that was provided to ensure the smooth running of the Towards Opportunity and Prosperity Conference which was held in 2002.

Administrative and technical support team in 2003

OUTLOOK FOR 2003 AND 2004 Social Policy Research The Melbourne Institute will continue its major program of social policy research for the Department of Family and Community Services (FaCS). Now in its third year the research program is expected to lead to an increasing number of articles in refereed journals as well as research reports to FaCS.

HILDA Conference Early in 2003, the Melbourne Institute hosted a major conference to discuss early findings from the HILDA Survey. The conference attracted both a strong line-up of speakers, including four from overseas, and a capacity audience. The conference began with a keynote speech from Professor Stephen Jenkins from the University of Essex, the home of the British Household Panel Survey, on the value of longitudinal data. The other international speakers were Professor Dan Hamermesh, from the University of Texas, who looked at the issue of time stress from a cross-national perspective; Professor Robert Drago, from Pennsylvania State University, who presented a paper in collaboration with Dr Yi-Ping Tseng that examined working hours arrangements and preferences in couple households; and Dr John Haisken-DeNew, from the University of Essen in Germany, who looked at influences on life satisfaction. Issues that were covered by other papers presented at the conference included the growing trend towards pre-marital cohabitation and the consequences for marital stability; factors influencing the decision by young people to leave the parental home; patterns of contact with children following marital separation; and factors influencing levels of housing leverage (that is, housing debt to equity ratios).

Pursuing Opportunity and Prosperity Conference (jointly with The Australian), 13–14 November 2003 Following the successful Towards Opportunity and Prosperity Conference in April 2002, the Melbourne Institute and The Australian are hosting a second Economic and Social Outlook Conference in November 2003, entitled ‘Pursuing Opportunity and Prosperity’. Some of the same themes as in the 2002 conference will be pursued, such as higher education reform, welfare reform, health policy, and innovation. Some additional themes will also be explored such as indigenous development, issues for children and the future of schools, and the ageing workforce. The conference will again be addressed by leaders from politics, the public service, business, unions and community groups, as well as academics from Australia and overseas.

40th Anniversary Project on Dimensions of Poverty and Disadvantage At the Towards Opportunity and Prosperity 2002 Economic and Social Outlook Conference, organised by the Melbourne Institute and The Australian, the Secretary to the Treasury, Dr Ken Henry, commented on the debate about poverty in Australia. Sen (1999, p. 108)1 argues that ‘policy debates have been distorted by over-emphasis on income poverty and income inequality, to the neglect of deprivations that relate to other variables, such as unemployment, ill health, lack of education and social exclusion’. Rather than seeing the consideration of these variables as outside the context of poverty, however, he sees them as incorporated in a broader view of poverty. Informed by Sen’s thinking on these issues, a project has been proposed that will include the following types of analysis. 1

Sen, A. (1999), Development as Freedom, Oxford, Oxford University Press.

1. Analysing Social Mobility, Capability Deprivation, and Economic and Social Progress Using the HILDA Survey • A cross-sectional analysis of the configuration of capabilities across Australian households, incorporating income, wealth, education, training, health and employment. • An analysis of how the findings are modified, when allowing for the changes in the circumstances of each household over time. 2. Eradicating Poverty/Capability Deprivation • The development of a typology of alternative definitions of poverty, including measures of income deprivation and measures based upon Amartya Sen’s writings, and the theoretical arguments for and against each definition and an empirical assessment of how the measured levels of poverty in Australia vary, depending upon the measures used. • An examination of the persistence of poverty and disadvantage in Australia, using longitudinal data from the HILDA Survey. • An assessment of the feasibility of eradicating poverty, dependent upon the alternative measures used.

Research on the Economics of Health and the Economics of Education Research on health economics will continue to receive major emphasis in 2003 and 2004. The Melbourne Institute will be tendering for two major research grants in this area: a NHMRC grant entitled ‘Interfacing Health Research with Health Policy and Practice’ and an ARC Linkage grant on ‘Assessing the Performance of Hospitals in Victoria’. Discussions with various interested parties and potential industry partners are still ongoing. The health research strength of the Melbourne Institute will be bolstered in the second half of 2003 with the arrival of Dr Alfons Palangkaraya, from the Oregon State University, who will be assuming a Research Fellow position. A number of projects were undertaken on the economics of school education during 2003 for the Victorian Department of Treasury and Finance. Three projects were finalised by the middle of 2003 but one project, ‘A Typology of Actual and Hypothetical Alternative Structures and Funding of the School System’, continues during the last half of 2003. Discussions are currently underway to undertake further projects in late 2003 and 2004 for the Victorian Department of the Premier and Cabinet in collaboration with the Australian Council of Education Research. Work is also continuing during 2003 on a monograph edited by Emeritus Professor Boris Schedvin on education policy, with contributions by a distinguished group of experts in education. The book is expected to be published in early 2004.

Conference on Foreign Direct Investment The Melbourne Institute, in collaboration with the Leverhulme Centre for Globalisation and Economic Policy at the University of Nottingham, will be hosting an international conference on foreign direct investment (FDI) in 2004. This conference, directed at an academic audience, will examine all aspects of FDI. Topics likely to be covered include FDI, exporting and outsourcing; empirical studies of the relationship between FDI, exports and economic growth; FDI in the presence of variable country risk; and policy implications for Australia and the Asia Pacific region.

Business Cycle Research The business cycle research area has undergone several changes in 2003, not least of which was the departure of its long-time director, Dr Don Harding. Don has left the Melbourne Institute for a teaching position in the Department of Economics, and we wish him well. We have also had a name change, from the Centre for Business Cycle Analysis to the Applied Macroeconomics Research Program. Dr Peter Summers has been appointed as Head of the program, and promoted to Associate Professor. The core business of the macro research area has not changed, however. We have continued to produce our wellknown range of economic indicators and forecasts. The latest of these products is the TD Securities – Melbourne Institute Experimental Monthly Inflation Gauge, which was launched in July. Early indications are that the Inflation Gauge will generate considerable interest and excitement in the coming year.

New ARC Grant: The Evolution of Australian Enterprises 1990 to 2007 The Applied Microeconomics program was awarded a three-year ARC linkage grant on the evolution of Australian enterprises. This project, headed by Dr Elizabeth Webster, will examine determinants and effects of enterprise entry and exit on growth, export and productivity in Australian industry using innovative panel enterprise data sets which have been collated and linked from existing ABS surveys, administrative data and accounting data. Other investigators include Dr Jongsay Yong (Melbourne Institute), Professor Tim Fry (RMIT and Melbourne Institute Associate), Mr Murray Klee (ABS), Mr Tim Harcourt (Austrade), Professor Jonathan Pincus (Productivity Commission), Mr Grant Clark (Victorian Government) and Mr Phil Ruthven (IBIS).

STAFF, ASSOCIATES AND RESEARCH STUDENTS Staff Members in 2002

General Staff

Research Staff

Business Manager Ms Fiona Zammit DipEd BEd Deakin

Director and Ronald Henderson Professor Professor Peter Dawkins BSc Lough MSc(Ec) Lond PhD Lough FASSA FIPA (Vic) Director HILDA and Professorial Research Fellow Professor Mark Wooden BEc Hons Flin MSc Lond Deputy Director and Principal Research Fellow Associate Professor David Johnson DipAgEc NE BAgSc MCom PhD Melb Director, Microeconomics Research Program and Senior Research Fellow Dr Don Harding BEc DipEc MEc ANU PhD Yale Director, Microeconomics Research Program and Senior Research Fellow Dr Elizabeth Webster BEc Hons MEc Monash PhD Camb Principal Research Fellow Associate Professor Tim Fry BA Hons Kent MA PhD Manc Senior Research Fellows Dr Mariah Evans BA Reed MA Ill PhD Chicago Dr Mark Harris BA Sussex GDipEc PhD Monash Dr Guyonne Kalb MEc Erasmus PhD Monash Dr Peter Summers BA MA MSc PhD Iowa Research Fellows Mr Simon Freidin BSc Hons GradDipCompSc LaT Mrs Glenys Harding BEc ANU Dr Ben Jensen BCom Hons Melb PhD Melb Ms Anne Leahy BCom GCertClassics Melb Ms Nellie Lentini BA Monash Dr Joanne Loundes BEc Hons Murdoch PhD Melb Ms Rosanna Scutella BCom Hons Melb Dr Lei Lei Song BA E.China MSc Wuhan MEc W’gong PhD Melb Dr Yi-Ping Tseng BEc Taiwan PhD ANU Ms Nicole Watson BSc UWA GDipMgtSc Canb Dr Roger Wilkins BCom MCom Melb MSc Wisc PhD Melb Dr Jongsay Yong BA BSocSc Hons MSocSc NUS MA PhD Brit Col Research Officers Mr Michael Chua BEc Hons NE Ms Kelly Jarvis BEc Hons Monash Mr Hsein Kew BCom Hons Melb Mr Woei Tian Liew BSc MSc LaT GDipEc Melb Dr Joanna Sikora MA Wroclaw PhD ANU Ms Penelope Smith BEc Hons UWA MCom Melb Ms Diana Warren BCom MCom Hons W’gong Mr Tim Watts BCom BA Melb MA Boston Research Assistant Ms Kerry Ware

Finance and Information Technology Manager Mr Jean-Luc Garlick BSc DipHum DipEcCom LaT Contracts and Marketing Manager Ms Rachel Derham BSc Melb Functions Manager Ms Karen Roe BA Hons MA LaT PGDACS Melb Functions Coordinator Ms Penelope Hope BA LaT Executive Assistant Ms Lara Hammond Administrative Assistant Ms Rosy Qin BCom Melb

Postgraduate Students Ms Kinga Elo BA MSc (Finance) BUESPA MA (Eco) CEU Mr Yasar Gedik BEc Hons LaT MCom Melb Mr Matt Hammill BEc Newcastle BCom Hons Melb Mr Ben Jensen BCom Hons Melb Ms Joanne Loundes BEc Hons Murdoch Ms Rosanna Scutella BCom Hons Melb Ms Penelope Smith BEc Hons UWA MCom Melb Mr Sam Tsiaplias BCom Hons LLB Deakin

New Staff Members in 2003 Research Staff Principal Research Fellow and Deputy Director HILDA Associate Professor Bruce Headey BA Oxf MA Wisc PhD Strath Research Fellows Dr Hielke Buddelmeyer MSc Vrije/Am MA PhD NYU Dr Lixin Cai BEd Henan MA Renmin MEc PhD ANU Mr Paul Jensen BEc UTS PhD AGSM Research Officers Ms Vu Thi Hong Ha BEc Hons ANU Mr Ben Methakullawat BCom Hons Melb

General Staff Business Manager Mr Nikos Thomacos BBus (Eco) RMIT BA Hons Deakin Administrative Assistants Ms Angie Cumming DipBus NMIT Ms Claire Merlo BA Deakin

Staff Members in 2002â&#x20AC;&#x201C;2003

Professor Peter Dawkins

Dr Hielke Buddelmeyer

Dr Lixin Cai

Mr Michael Chua

Ms Angie Cumming

Ms Rachel Derham

Dr Mariah Evans

Mr Simon Freidin

Associate Professor Tim Fry

Mr Jean-Luc Garlick

Ms Vu Thi Hong Ha

Ms Lara Hammond

Dr Don Harding

Mrs Glenys Harding

Dr Mark Harris

Associate Professor Bruce Headey

Ms Penelope Hope

Ms Kelly Jarvis

Dr Ben Jensen

Mr Paul Jensen

Associate Professor David Johnson

Dr Guyonne Kalb

Mr Hsein Kew

Ms Anne Leahy

Ms Nellie Lentini

Mr Woei Tian Liew

Dr Joanne Loundes

Ms Claire Merlo

Mr Ben Methakullawat

Ms Rosy Qin

Ms Karen Roe

Ms Rosanna Scutella

Dr Joanna Sikora

Ms Penelope Smith

Dr Lei Lei Song

Dr Peter Summers

Mr Nikos Thomacos

Dr Yi-Ping Tseng

Ms Kerry Ware

Ms Diana Warren

Ms Nicole Watson

Mr Tim Watts

Dr Elizabeth Webster

Dr Roger Wilkins

Professor Mark Wooden

Dr Jongsay Yong

Ms Fiona Zammit

Adjunct Professors and Associates in 2002 Adjunct Professors Professor Jeff Borland MA PhD Yale Department of Economics, The University of Melbourne Research interests include analysis of the operation of labour markets in Australia, applications of microeconomic theory to labour markets, and the economics of sport. Within the Melbourne Institute, Jeff is an associate editor of the Australian Economic Review and is involved in the Labour Economics and Social Policy program. Professor John Creedy BSc (Eco with Stats) Brist BPhil (Eco) Oxf Truby Williams Chair of Economics, Department of Economics, The University of Melbourne (on leave in 2002â&#x20AC;&#x201C;2003 at the New Zealand Treasury) Research interests include income distribution, public economics, labour economics, and history of economic analysis. Within the Melbourne Institute, John has been joint editor of the Australian Economic Review and contributed to tax and welfare research programs. Professor John Freebairn MAgEc NE PhD Davis FASSA Head, Department of Economics, The University of Melbourne Research interests include taxation reform, labour economics, especially employment, infrastructure pricing and investment, and microeconomic reform. Within the Melbourne Institute, John has made substantial contributions to research in the areas of unemployment and tax reform, public finance and public policy. Professor Danny Samson BEc PhD UNSW Head, Department of Management, The University of Melbourne Research interests include operations management, business competitiveness, strategy and e-commerce. Within the Melbourne Institute, Danny contributes to the Applied Microeconomics program, is chief investigator of an ARC SPIRT Grant and is also involved in collaboration on research on innovation.

Professorial Fellows Professor Derek Bosworth BA Lanc MSc PhD Warw Professor of Business Economics, Manchester School of Management, UMIST Research interests include economics of innovation and technical change, productivity and firm performance, and intellectual property. Within the Melbourne Institute, Derek is a principal investigator of an ARC SPIRT Grant and is collaborating with the Applied Microeconomics program in the field of the economics of innovation. Professor Bruce Chapman BEc Hons ANU PhD Yale Professor of Economics and Director of the Centre for Economic Policy Research, RSSS, The Australian National University Research interests include labour economics, the economics of education, applied econometrics, industrial relations and economic policy issues. Within the Melbourne Institute, Bruce contributes to the Applied Microeconomics program and is a key contributor to economic policy debate. Professor Alan Duncan BA Hons Manc DPhil York Professor of Microeconomics, School of Economics, University of Nottingham Research interests include welfare program evaluation, analysis of work incentives, static and behavioural tax microsimulation, econometric models of labour supply and labour market and welfare program participation. Within the Melbourne Institute, Alan is a key contributor to the development of the MITTS model. Professor Jonathan Kelley BA Camb PhD Berkeley Director, International Survey Project, The Australian National University Research interests include quantitative sociology and social economics. Within the Melbourne Institute, Jonathan produces the International Social Science Survey in conjunction with the ANU. He is a contributing author of the Australian Social Monitor and a key figure in the Labour Economics and Social Policy program.

Professor Boris Schedvin BEc PhD Syd Research interests include economic history with particular interests in the transformation of the Australian economy and of Australian economic and scientific institutions during the course of the twentieth century. Within the Melbourne Institute, Boris contributes to the research agenda in the areas of education policy, health policy research and intellectual property research.

Principal Fellows Dr Ernst Boehm AUA BEc Hons MEc Adel MCom Melb DPhil Oxf Research interests include the measurement and dating of the business cycle, and the economic history of Australia. Within the Melbourne Institute, Ernst developed the leading, coincident and lagging indexes of Australian economic activity as well as the leading index of inflation. He published the results of these indexes in the monthly Westpac â&#x20AC;&#x201C; Melbourne Institute reports between 1985 and 1994. Associate Professor Bruce Headey BA Oxf MA Wisc PhD Strath Formerly the Director of the Centre for Public Policy, The University of Melbourne Research interests include welfare and distributional issues and social welfare policies in Western Europe and North America. Within the Melbourne Institute, Bruce is the editor of the Australian Social Monitor and involved in social policy research. Dr Gary Marks BSc Hons MSc Melb PhD Qld Research interests include the youth labour market; unemployment, earnings, pathways to full-time work; and educationâ&#x20AC;&#x201D;early school leaving, achievement in literacy and numeracy, and educational participation. Within the Melbourne Institute, Gary is involved in the HILDA project.

Dr John Nieuwenhuysen BA Hons MA Natal PhD LSE FASSA Research interests include taxation, industrial relations, industrial regulation, economic growth, immigration, welfare and poverty. Within the Melbourne Institute, John contributes to sourcing funds for research projects, developing new publications and our media coverage.

Senior Fellows Dr Denise Doiron BA Monc MA PhD UBC Senior Lecturer, University of New South Wales Research interests include industrial relations and bargaining theory, labour economics and labour and social policy. Within the Melbourne Institute, Denise contributes to the Labour Economics and Social Policy program and is collaborating on a project which is estimating the demand for child care and labour supply in Australian households. Dr Mardi Dungey BEc Tas PhD ANU Fellow Research, School of Pacific and Asian Studies, The Australian National University and Senior Lecturer, Faculty of Economics, The Australian National University Research interests include exchange rate volatility, macroeconomic modelling and time series econometrics. Within the Melbourne Institute, Mardi contributes to the Applied Macroeconomics program. Dr Mark Rogers BSc Lond MSc Warw PhD ANU Tutor in Economics and Management, Harris Manchester College, Oxford University Research interests include economic growth and industrial organisation with a particular focus being on firm-level performance using Australian data. Within the Melbourne Institute, Mark is involved in the creation and analysis of the Innovation Scoreboard and a major SPIRT project on the performance of Australian enterprises. Dr Michael Shields BA Hons Stafford MSc Health UNY PhD Leic Senior Lecturer, Department of Economics, The University of Melbourne Research interests include labour economics, health economics and microeconometrics. Within the Melbourne Institute, Mike is assisting with our research in the area of health economics.

New Associates in 2003 Professorial Fellows Professor Robert Drago BS Tulsa MA Mass/Am PhD Mass/Am Professor of Labor Studies and Womenâ&#x20AC;&#x2122;s Studies, Pennsylvania State University Research interests include the economics of work and family. Within the Melbourne Institute, Robert contributes to the Labour Economics and Social Policy program.

Professor Ross Williams BCom Melb MScEc PhD Lond FASSA Research interests include the economics of education, household consumption and saving, federalâ&#x20AC;&#x201C;state finance, the costs of litigation and the allocation of time by households.

Senior Fellow Associate Professor Sandra Hopkins BA Hons Otago MCom UNSW PhD Tas Economics, School of Economics and Finance, Curtin University of Technology Research interests include health policy, health insurance and economics and gender.

ADVISORY BOARD Members in 2002 Chairperson Dr Peter Jonson, Professional Director

Members Mr Gary Banks, Chairman, Productivity Commission Ms Sharan Burrow, President, Australian Council of Trade Unions Mr Tony Cole, Principal â&#x20AC;&#x201C; National Practice Leader, Investment Consulting, Mercer Investment Consulting Professor Peter Dawkins, Director and Ronald Henderson Professor, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Mr Bill Evans, General Manager, Economics, Westpac Banking Corporation Father Nic Frances, Executive Director, Brotherhood of St Laurence Professor John Freebairn, Head, Department of Economics, The University of Dr Peter Jonson Melbourne Dr Don Harding, Assistant Director, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Associate Professor David Johnson, Deputy Director, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Professor Frank Larkins, Deputy Vice-Chancellor (Research), The University of Melbourne Mr Ian Little, Secretary, Department of Treasury and Finance Professor Peter Lloyd, Ritchie Professor of Economics, Department of Economics, The University of Melbourne Associate Professor Alison McClelland, Associate Professor, Department of Social Work, La Trobe University Mr Phil Ruthven, Executive Chairman, IBISWorld Mr Glenn Stevens, Deputy Governor, Reserve Bank of Australia Mr Mark Sullivan, Secretary, Department of Family and Community Services Dr Elizabeth Webster, Senior Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Professor Ross Williams, Dean, Faculty of Economics and Commerce, The University of Melbourne Professor Mark Wooden, Professorial Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Ms Fiona Zammit, Business Manager, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne During 2002, Dr Peter Jonson retired from the Advisory Board. He has been appointed Emeritus Chairperson of the Board. Mr Tony Cole has been appointed Chairperson. Professors Peter Lloyd and Ross Williams also retired from the Board in 2002.

New Members in 2003 Ms Carol Austin, Investment Services Director, Contango Asset Management Professor Max Corden, Professorial Fellow, Department of Economics, The University of Melbourne Mr Bill Scales, Group Managing Director, Regulatory, Corporate and Human Relations and Chief of Staff, Telstra Dr Peter Summers, Principal Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Mr Nikos Thomacos, Business Manager, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne 18

May 2002 Advisory Board Meeting Front row: Professor Peter Dawkins, Mr Tony Cole, Dr Peter Jonson, Associate Professor David Johnson, Professor Mark Wooden Back row: Dr Elizabeth Webster, Mr Gary Banks, Professor Ross Williams, Associate Professor Alison McClelland, Mr Ian Little, Mr Glenn Stevens, Mr Mark Sullivan, Associate Professor Tim Fry (in attendance), Dr Don Harding, Professor Frank Larkins, Ms Fiona Zammit, Mr Phil Ruthven, Professor Peter Lloyd, Professor John Freebairn, Ms Lara Hammond (Advisory Board Secretary)

Members Not Included in Group Photograph

Father Nic Frances

Ms Sharan Burrow

Mr Bill Evans

Professor Max Corden

Mr Bill Scales

New External Members in 2003

Ms Carol Austin

RESEARCH AREAS Applied Macroeconomics Introduction In 2002 the Applied Macroeconomics research program continued with its program of academic research on business cycles as well as producing its regular commercial publications, economic indicators and forecasts. Publications include the Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Westpac – Melbourne Institute Indexes of Economic Activity, Westpac – Melbourne Institute Survey of Consumer Sentiment, Melbourne Institute Survey of Consumer Inflationary Expectations, and the ING – Melbourne Institute Household Saving Report.

Research Staff During 2002 the research program was led by Dr Don Harding (Director) and Dr Peter Summers (Deputy Director) and comprised Dr Lei Lei Song (Research Fellow), Mr Michael Chua (Research Officer) and Ms Anne Leahy (Manager Economic Indicators). Ms Kerry Ware worked on the collection of price information for the TD Securities – Melbourne Institute Inflation Gauge project. Postgraduate students included Ms Penelope Smith, Mr Matt Hammill and Ms Kinga Elo. At the beginning of 2003, Dr Don Harding took up a teaching position with the Department of Economics at the University of Melbourne, with Dr Peter Summers taking on the role of Director of the program. It is important to recognise Dr Don Harding’s contribution to the program over nine years.

Research Output Evidence of the high quality research undertaken by the Macroeconomics staff in 2002 is provided by the seven fully written papers presented at international conferences. These comprise (1) Peter Summers and Penelope Smith ‘On the Interactions between Growth and Volatility’ presented at the 22nd International Symposium on Forecasting, Dublin, June, and the Econometric Society Australasian Meetings (ESAM), Brisbane, July; (2) Peter Summers ‘Bayesian Evidence on the Structure of Unemployment’, ESAM, Brisbane, July; (3) Don Harding Applied Macroeconomics team ‘Contours of the American Business Cycle’, ESAM, Brisbane, July; (4) Don Harding and Adrian Pagan ‘A Comparison of Two Business Cycle Dating Procedures’, Econometric Society Latin American Meetings, Sao Paulo, July; (5) Don Harding and Adrian Pagan ‘Synchronization of Cycles’, Rio de Janeiro, July; (6) ‘Extracting, Analysing and Using Cyclical Information’, European Meetings of the Econometric Society, Venice, August; and (7) Don Harding ‘Non-Parametric Turningpoint Detection, Dating Rules and the Construction of the Euro-Zone Chronology’, EUROSTAT Colloquium on Modern Tools for Business Cycle Analysis, November. In 2002 while only one article in a refereed journal—the Journal of Monetary Economics—was published from the group in 2002 (lower than last year’s output of six articles in refereed journals), it reflects the confluence of several factors such as the continuing demands of the program’s non-academic commercial publications and a policy decision to aim for higher quality publications in international journals. Several papers were presented at Australian conferences. These comprise (1) Lei Lei Song ‘Public Capital and Congestion in Australia’, 31st Conference of Economists, Adelaide, September; (2) Don Harding ‘The Australian Business Cycle: A New View’, Towards Opportunity and Prosperity, Melbourne, April; and (3) Peter Summers ‘The Near Term Economic Outlook’, Towards Opportunity and Prosperity, Melbourne, April. In addition to the above, the staff reached out to present results of their research to business, government and the community at the Melbourne Institute Business Economics and Public Economics Forums, private seminars and presentations to clients. 20

Advisory Board The first meeting of the Macroeconomics Advisory Board comprising Mr Glenn Stevens (Chair), Dr Martin Parkinson, Dr Vince FitzGerald, Mr Bill Evans, Professor Adrian Pagan, Dr Peter Summers and Dr Don Harding was held at the Reserve Bank on 20 September 2002. The Board meets annually.

Labour Economics and Social Policy Overview The Labour Economics and Social Policy research program generated around $3.8 million worth of research income during 2002, and achieved a modest surplus in the vicinity of $140,000. Research activity was dominated by three major contracts. These were for: 1. the Social Policy Research Services Contract with the Commonwealth Department of Family and Community Services (FaCS); 2. the Household, Income and Labour Dynamics in Australia (HILDA) Survey project, also funded by FaCS; and 3. research on topics in the areas of the economics of health and the economics of education for the Victorian Department of Treasury and Finance. All indicators are that the outputs from these contracts are being well received by the clients. On the downside, however, publishable output from these contracts, and especially the Social Policy Research Services Contract, which commenced in 2001, has been slow to develop, with only three papers submitted to academic journals by the end of 2002. It is expected, however, that the number of journal submissions will accelerate markedly during 2003. Labour Economics and Social Policy team In 2003 the research program has been restructured, with the economics of health and education activity moved to another part of the Melbourne Institute and the program area rebadged as the Labour Economics and Social Policy research program. Despite this narrowing in scope, the projected income for the program during 2003 is still forecast to exceed $4 million. As in previous years, a reasonably large proportion of this income (about 45 per cent) will be spent on survey costs associated with the HILDA Survey project. Nevertheless, even if we ignore these survey costs, the Labour Economics and Social Policy program is still expected to provide just over half of all of the Melbourne Instituteâ&#x20AC;&#x2122;s income during 2003.

Social Policy Research Services Contract The FaCS Social Policy Research Services Contract commenced in 2001 and runs until the end of 2004. As shown in the accompanying table, 31 different projects had been initiated under this program by the end of 2002, 12 of which have been concluded. A further eight new projects have been initiated during the first half of 2003. In addition, greater emphasis in 2003 is being placed on ensuring more of the output from this contract will MITTS team reach academic outlets. In November 2002, FaCS held a workshop to disseminate results from the contract research to its staff. Several of the Melbourne Institute staff presented papers at this workshop. Other contract research has appeared as official FaCS publications indicating the relevance of our work to FaCS. The program has also been restructured during 2003, partly to reflect the changing research priorities of FaCS and also in recognition of the greater significance of the HILDA Survey as a research vehicle and data source. There are now four distinct research teams. These are: 1. Work, Welfare, Families and the Life Cycle: HILDA Data (under the leadership of Professor Mark Wooden); 2. Work, Welfare, Families and the Life Cycle: ABS and Other Data (under the leadership of Dr Roger Wilkins); 3. Empirical Analysis of Income Support Recipients (under the leadership of Professor Jeff Borland); and 4. Melbourne Institute Tax and Transfer Simulator (MITTSâ&#x20AC;&#x201D;under the leadership of Dr Guyonne Kalb). Professor Peter Dawkins continues to have overall responsibility for the management of the project. 21

Table 1: Melbourne Institute Social Policy Research Contract Projects Stream 1: Empirical Studies of the Interaction between the Labour Market and the Social Security System

Stream 2: Economic and Social Analysis of the Family and Communities

Stream 3: Supply of and Demand for Income Security: Behavioural Policy Modelling

1. Reliance on Income Support*

8. Economic and Sociological Analyses of Families: Existing Research findings*

16. A Policy Simulation of Aspects of the Tax System Using the Melbourne Institute Tax and Transfer Simulator: Main Project*

2. Effect of Changes to Activity Test Arrangements on Exit from Payments – A: Mutual Obligation 3. Effect of Changes to Activity Test Arrangements on Exit from Payments – B: Intensive Review 4. Movement between Payment Types* 5. The Impact of Social Policy Initiatives on Labour Supply Incentives: A Review of the Literature*

9. Economic and Sociological Analyses of Communities: Existing Research Findings 10. Family and Community Influences on ‘Wellbeing’* 11. Neighbourhood and Family Effects on Employment and Employment Aspirations*

16a. A Policy Simulation of Aspects of the Tax System Using the Melbourne Institute Tax and Transfer Simulator: Interim Project* 17. Effects of the Working Nation Social Security Reforms in July 1995: A Policy Simulation Using the Melbourne Institute Tax and Transfer Simulator

12. Attitudes to Provision for Old Age 13. Work and Family Directions in the US and Australia*

18. Analysis of Incidence and Trends in Jobless Families in Australia*

19. Comparison of Alternative Specifications 14. Understanding and Improving Data Quality for the Labour Supply Models in MITTS Relating to Low Income Households 29. International Comparison of Trends in the Polarisation of Employment 7. Effect of Changes to Activity Test 15. Economics of Marriage and Divorce – Arrangements on Exit from Payments – Project Terminated 30. The Effect of Childcare Costs on Labour C: Job Seeker Diary Supply 24. Effect of Family Composition and 21. What Happens to the Human Capital of the Worklessness on the Distribution of Income 31. Extending the Range of Distributional Unemployed over Time? An Analysis of and Expenditure Measures in MITTS Changes in Marginal Productivity and JobFinding Abilities* 25. Effects of Divorce on Children’s Education, and Whether They Are Accounted for by 22. Labour Market Outcomes and Welfare Moving House Participation of Persons with Disabilities in Australia* 26. Effects of Education, Fertility and Divorce on Married Women’s Employment: Patterns 23. Jobless Households (HILDA) Past, Present and Future 6. Effect of Changes to Activity Test Arrangements on Exit from Payments – D: Work for the Dole

27. Working Time Preferences in Couple Households (HILDA) 28. The Importance of Where People Live for Subjective Welfare Note: * This project has been completed.

HILDA Survey 2002 saw the delivery of the first release of data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, Australia’s first large-scale household panel survey. A public-release unit record file containing data from wave 1 was launched by Senator Amanda Vanstone, the Minister for Family and Community Services, at the Melbourne Institute’s October 2002 Public Economics Forum. The data release was accompanied by extensive documentation and by the HILDA team first annual report on the HILDA Survey. Both the report and the data file have been favourably received, and by the end of July 2003 there were around 170 approved HILDA data users. The high level of interest in the HILDA Survey data is also borne out by the capacity audience that attended the first HILDA Survey Users Conference held in March 2003, co-sponsored by FaCS and the Melbourne Institute. The conference included eight papers that presented analyses of data from the first wave. Papers using the HILDA data have also featured prominently at the 8th Australian Institute of Family Studies Conference (February 2003) and at the Australian Social Policy Conference (July 2003). 22

Some of the topics and issues that have been the subject of attention of HILDA data users include: • • • • • • • • • •

economic influences on time stress; housing debt to equity ratios; job satisfaction and non-standard employment; working hours arrangements and preferences in couple households; the impact of long working hours on fathers and their families; retirement intentions of mature-age workers; the influence of neighbourhood characteristics on subjective well-being; household division of domestic labour; patterns of child–parent following marital separation; and the impact of pre-marital cohabitation on marital stability.

Interviewing for wave 2 commenced in August 2002 and was concluded by March 2003. Response rates, while again not as high as hoped, were still inside our target range, with the rate of attrition between wave 1 and wave 2 being 13.2 per cent. A major feature of wave 2 is the collection of data on household wealth. As such, it is believed that the HILDA Survey will provide the first estimates of net household wealth in Australia derived from micro data. These data can thus be used to paint a picture of the structure and distribution of wealth across Australian households. Wave 3 fieldwork commenced in late August 2003. The main innovative feature of wave 3 is a new module on retirement and the transition to retirement. Finally, Professor Mark Wooden attended a special meeting of Household Panel Survey Principal Investigators in Berlin in July 2003. The HILDA Survey has been invited to join an international network currently comprising what are widely recognised as the three leading household panel surveys in the world. HILDA would thus be the fourth member of this group. The aim of this consortium is to develop greater collaborative links and cross-national research projects.

Other Activities NZ Treasury We were commissioned by the New Zealand Treasury to estimate a model of labour supply for New Zealand. Led by Dr Guyonne Kalb, the project commenced in the last quarter of 2002 and is expected to be completed by the third quarter of 2003. A paper based on this research has already been submitted to New Zealand Economic Papers.

International Social Science Survey and Research Database Facility In collaboration with Professor Jonathan Kelley of the Australian National University, the Melbourne Institute continued its involvement with the International Social Science Survey, Australia, and associated household survey research. Dr Mariah Evans was the main Melbourne Institute employee associated with this venture. Two projects were finalised that involved the construction of research database facilities using data from past surveys. Funded primarily by the ARC, the two projects have been undertaken under the leadership of Professor Jonathan Kelley and Dr Mariah Evans. The work has also been supported by the Australian National University, Curtin University, La Trobe University, Monash University, University of Tasmania, Victoria University of Technology and Swinburne University. The first project established a database of national social science surveys of household unit record files using data undertaken between 1984 and 2000 on economic, social and political variables with emphasis on the labour market and on attitudes, starting from a base of existing efforts within the collaborating institutions. Known as the Australian Economic and Social Unit-Record Database (AESUD), it pooled over 300 variables and 22,000 cases from 10 large, nationally representative samples of Australians (the International Social Science Surveys/Australia). The database is available on CD and on networked storage and is the focus of continuing research by scholars at the participating universities and elsewhere. The International Economic and Social Unit-Record Database (IESUD) was also funded primarily by the ARC. This project brought together exactly comparable social science survey data from large, representative national samples undertaken during 1987 (nine nations), 1992 (24 nations) and 1999 (29 nations). For Australia, Canada and the United States (over 25,000 cases each) comparison over 12 years is possible while for 21 nations (from 1000 to 2500 cases each) comparison is possible over the 1990s. These surveys include about 30 demographic and 23

background variables and a further 60 to 80 variables measuring perceptions, attitudes, values and policy preferences concerning economic inequality. The variables correspond to the great majority of those available in the Australian data in the AESUD. As with the AESUD, the IESUD database is available on CD and on networked storage and is the focus of continuing research by scholars at the participating universities and elsewhere.

International Reform Monitor The Melbourne Institute is the Australian partner in an international forum for the discussion of interesting and current reforms in the fields of social policy, labour market policy and industrial relations. The forum is run by the Bertelsmann Foundation and provides the opportunity for international comparisons of experience and knowledge in social policy. There are 15 members of the forum all from developed countries in Western Europe and the Pacific rim. Twice a year, each country details current reforms in the fields listed above. The reforms are compiled into a non-technical monograph aimed at a broad audience of policy makers, academics, public servants, business people and other interested persons. The publication is distributed within the member countries and is also available on the Internet at www.reform-monitor.org. It has proved to be a valuable means of comparing social policy in the member countries with over 80,000 visits to the website per year. The group meets each year to discuss the development of the project and to present findings on particular issues. Associate Professor David Johnson attended the 2002 meeting held in Barcelona.

Economics of Education and Health The Melbourne Institute markedly increased its research in the areas of the economics of health and education during 2002. The work was funded by the Victorian Department of Treasury and Finance (DTF). From September 2002 Associate Professor David Johnson and Dr Ben Jensen with Professor Brian Caldwell of the Faculty of Education undertook four short consultancy projects for the DTF concerned primarily with productivity in schools. Following the success of the consultancy work in late 2002, the DTF commissioned two projects concerning economic issues in health: The Market for Nurses; and Costs Drivers Associated with Health in Old Age. In early 2003 an ambitious program started, involving a further four projects in education and four in health. The titles of the four health projects were ‘A Comparative Study of Health Systems in the Developed World’; ‘Health Insurance and Its Role in the Health Care System’; ‘The State of Hospital Care in Australia’; and ‘Preventive versus Curative Health Care: The Role of Public Health in Australia’. The health projects were undertaken by Associate Professor David Johnson and Dr Jongsay Yong from the Melbourne Institute, and substantial parts of the work were subcontracted to Dr Michael Shields from the Economics Department and Associate Professor Sandra Hopkins and Ms Maria Mangano from the School of Economics at Curtin University of Technology. The titles of the four education projects were ‘The Labour Market for Teachers’; ‘Productivity in Schools over Time’; ‘Stock-take of Existing Knowledge on Determinants of Educational Outcomes’; and ‘A Typology of Actual and Hypothetical Alternative Structures and Funding of the School System’. A number of researchers were involved in the delivery of the education papers. Principal researchers included Dr Ben Jensen and Associate Professor David Johnson, assisted by Professor Peter Dawkins, Professor Stephen King, Professor Brian Caldwell, Mr Simon Feeny and Mr Ben Methakullawat. Currently, further projects in health and education are under discussion with the Victorian Department of the Premier and Cabinet.

Conflict Inflation: Estimating the Contributions to Wage Inflation in Australia during the 1990s One of the major emerging macroeconomic problems during the last century was the tendency for inflation to accelerate under prolonged periods of full employment. Joe Isaac and Nicholas Kaldor have both argued that this arises from the process of wage determination common to most Western economies. They posit that there are three major objectives of wage earners that are in competition with one another: first, the desire to maintain relativities; second, the desire to have a ‘fair’ share of companies’ profits; and third, a reluctance to allow any encroachment on achieved standards due to unfavourable (exogenous) events. If companies have differing rates of profit then the first objective will conflict with the second. If there are adverse changes to the terms of trade, then the third objective will cause inflation. In this study, Associate Professor Tim Fry and Dr Elizabeth Webster test how well these three objectives of wage earners cited above explain wage inflation in Australia, using a times series of micro wage data rates for detailed occupations and industries for the period 1989 to 2000. They find that wages are sensitive to the three major objectives, but not to occupational unemployment rates. 24

New Activities in 2003 There were two major new initiatives that commenced in 2003. The first is an ARC Discovery Grant titled the ‘The Dynamics of Economic and Social Change’. Under the leadership of Professors Mark Wooden, Jeff Borland (Department of Economics) and Alan Duncan (University of Nottingham), the project is centred around use of the HILDA Survey data to explore a number of research questions under three broad themes: (1) the changing nature of work; (2) labour supply; and (3) income, poverty and well-being. The second major new initiative is a consultancy project for the Department of Employment and Workplace Relations involving further modelling using MITTS to analyse the effect of modifying income support in the tax and transfer system. More specifically, this project involves analysing the costs and behavioural effects of reforms such as those canvassed in the Federal Government’s discussion paper about a simpler income support system. The project is led by Professor Peter Dawkins in collaboration with two of our associates, Professors Alan Duncan and John Freebairn. Finally, the Melbourne Institute is currently in the process of raising funds for a new research initiative focusing on measuring the extent of, and dimensions to, poverty in Australia, as a 40th anniversary project. So far we have secured financial support from the Henderson Foundation. It is not expected, however, that this project would be able to commence until 2004.

Staffing Staff levels within the Labour Economics and Social Policy program increased during 2002 with the appointment of Dr Jongsay Yong (shared with Applied Microeconomics) and Dr Ben Jensen, who returned to the Melbourne Institute after a brief period in the United States. Both of these staff members, however, were part of the health and education areas and hence shifted out of the program following the restructuring. A number of further new appointments were made during 2003, including one new Research Officer (Ms Vu Thi Hong Ha) and two new Research Fellows (Dr Lixin Cai and Dr Hielke Buddelmeyer). In addition, Associate Professor Bruce Headey, who already held an honorary position, joined the HILDA Survey project team on a part-time basis (in part, replacing Associate Professor Tim Fry, who left the Melbourne Institute for a Chair at RMIT early in 2003), and we are currently negotiating with Dr Gary Marks to join us on a secondment basis.

Applied Microeconomics In 2002, the Applied Microeconomics program continued its delivery of high quality and respected research. Drawing on a set of diverse topics, the program was able to deliver research output in the areas of innovation, industrial relations and enterprise performance. During 2002, the team was made up of Dr Elizabeth Webster, Associate Professor Tim Fry, Associate Professor David Johnson, Dr Joanne Loundes, Dr Jongsay Yong, Dr Ben Jensen, Mrs Glenys Harding and Ms Kelly Jarvis. In 2003, the team welcomed Professor Derek Bosworth and Mr Paul Jensen.

SPIRT Project with Business Council of Australia, CEDA and IBISWorld

Applied Microeconomics research team

This project, consisting of eight papers, has examined the determinants and effects of different managerial and corporate approaches to industrial relations on the profitability in large enterprises in Australia. Most of these papers base their research on IBISWorld data which have been supplemented with a Melbourne Institute survey on a range of human resources, innovation, industrial relations and management characteristics. Six of the papers were undertaken by Melbourne Institute staff.

Industrial Relations Reform and Business Performance: An Introduction There appears to be widespread consensus, at least in industry and in government, that enterprise bargaining has been beneficial for productivity. Many academics, however, have argued that the link between bargaining structure and workplace productivity is a contentious one, and that research has been unable to establish a relationship. Professor Mark Wooden, Dr Joanne Loundes and Dr Yi-Ping Tseng have re-examined the existing evidence. The review reinforces the need to exercise caution before asserting that enterprise bargaining is necessarily beneficial for workplace productivity. The main conclusion that emanates from this review, however, is not this absence of a clear-cut finding, but how poorly developed the relevant research literature is.

Factors Affecting the Industrial Relations Climate in Australian Enterprises Dr Elizabeth Webster and Dr Joanne Loundes have investigated factors that are associated with cooperative industrial relations climates within major Australian enterprises. Climate is commonly measured along a uni-dimensional scale ranging from adversarial to cooperative and there is a view in the literature (albeit not a consensus) that those more cooperative climates are more productive. Their results find that organisations which have well-developed and bilateral channels of communication between managers and employees and those companies that use systematic and analytical methods for making major decisions tend to have the most cooperative climate of relations between management, employees and unions.

Are Pro-Reformers Better Performers? Associate Professor Tim Fry, Ms Kelly Jarvis and Dr Joanne Loundes have considered whether bargaining structures do impact on performance. In particular, they investigate whether organisations that have incorporated aspects of the industrial relations reform agenda have outperformed organisations that have not. The results from the application of a treatment effects regression model show evidence that organisations adopting the industrial relations reform agenda report significantly higher levels of self-assessed labour productivity relative to their competitors, even after controlling for a number of different factors.

Industrial Relations Reform: Who Are the Pro-Reformers? Associate Professor Tim Fry, Ms Kelly Jarvis and Dr Joanne Loundes have also investigated the characteristics of the organisations that have embraced the industrial relations reform agenda. They find evidence that certain industries, such as mining, have embraced the reform agenda. In addition, organisations that have embraced the reform agenda tend to have rather different human resource management practices to those that have not.

Cost-Focused Firms and Internet Usage Dr Joanne Loundes looked at Internet usage by Australian firms that have a cost-focused competitive strategy. Instrumental variables estimation found that cost-focused organisations utilised the Internet more intensively for both internal organisational activities and external market activities than organisations that did not have a high focus on costs. However, this impact appeared greater for internal organisational activities, suggesting that these firms possibly believed that there were greater cost savings and efficiency gains (at least in terms of Internet usage) to be had in using the Internet as part of the internal operations of the organisation.

Industrial Relations Reform at the Enterprise and Workplace In the final part of their study, Associate Professor Tim Fry, Ms Kelly Jarvis and Dr Joanne Loundes compared attitudes to and perceptions of industrial relations reform between senior management at large Australian organisations on the one hand and their associated workplace managers on the other. They observed significant differences in the opinions and policies of workplaces and enterprises. In particular, marked differences exist in the attitudes towards human resource management and industrial relations reform. These results suggest that corporate culture is not carried over from head office to the workplace.

The Dynamic Performance of Australian Enterprises This remaining paper in the Applied Microeconomics SPIRT project series (which began in 1997) was undertaken by Professor Derek Bosworth and Dr Joanne Loundes. They investigated the interaction of discretionary investments (R&D, capital investment, training and advertising), innovation, productivity and profitability within a dynamic framework of firm performance. A dynamic and closed model of firm performance is set up, and the resulting empirical model is tested as a series of recursive equations, using a four-year balanced panel data set of Australian firms drawn from the Business Longitudinal Survey. The results indicate that current economic profit has an important role to play in enabling firms to invest, and the findings indicate which of these investments are complements and which are substitutes.

Intellectual Property Research Institute of Australia (IPRIA) Projects A national centre for multi-disciplinary research on the law, economics and management of intellectual property, the Intellectual Property Research Institute of Australia (IPRIA), was established in 2002 with generous funding from IP Australia (the federal government agency responsible for the granting of rights in patents, trademarks and designs) and additional funding from the Victorian State Government. IPRIA is run jointly by the Faculty of Law, the Faculty of Economics and Commerce, and the Melbourne Business School. Its research focuses on ways to improve the protection, management and exploitation of intellectual property by business, research institutions and other users of the intellectual property system, and on supporting high quality policy development by government in areas relating to intellectual property. Some Melbourne Institute staff members work as part of the IPRIA team. During 2002, four papers or reports were produced.

Intangible and Intellectual Capital: A Review of the Literature Dr Elizabeth Webster has reviewed theoretical and empirical academic economic studies that discuss what intangible and intellectual capital is and why it is important for society. The paper discusses issues such as the nature of this capital and how it has changed over time. Subsequently it reviews measures of the importance of intangible and intellectual capital, whether optimal levels of investment in intangible and intellectual capital can be said to exist and, accordingly, whether governments should intervene in the market. On balance, theory favours the view that for reasons associated with uncertainty, non-mortgage ability and economies of scale, there is an under-investment in these types of investment.

Intellectual Capital: Accumulation and Appropriation Professor Laurie Hunter has developed a literature-based perspective on intellectual property from the standpoint of business strategy and strategic human resource management. Distinctive competitive advantage is increasingly built on a firmâ&#x20AC;&#x2122;s knowledge, one of the principal ingredients of intellectual capital. Competitive capability is strongly influenced by the organisationâ&#x20AC;&#x2122;s ability to develop, differentiate, appropriate and disseminate its knowledge base. The paper identifies the principal characteristics of knowledge assets and explores the means of extracting and protecting the value of those assets, for example through R&D, patents and trademarks, licensing and human capital investment. It also reviews the significance of knowledge as a strategic asset and reflects on its growing importance vis-a-vis physical capital. However, where knowledge is embodied in people as part of their personal intellectual capital, questions of ownership and appropriability arise in ways that are absent with physical capital.

The Rise of Trademarking in Australia in the 1990s Dr Joanne Loundes and Dr Mark Rogers undertook a preliminary analysis regarding the pattern of trademarking by Australian firms, using financial information on large Australian businesses from IBISWorld, and matching this with intellectual property information from IP Australia. While the positive trend in trademarking appears partly related to other innovative activity and uncertainty surrounding returns on investment, these factors are insufficient on their own. Dr Joanne Loundes and Dr Mark Rogers argue that the rise has been driven by changing managerial strategy with respect to intellectual property. One possibility for this change is an increasingly competitive environment between firms with intellectual property being increasingly relied upon.

The R&D and Intellectual Property Scoreboard The 2002 edition of the R&D and Intellectual Property Scoreboard was released in January 2003. The Scoreboard is compiled by Mrs Glenys Harding, with assistance from IBISWorld and IP Australia and other staff from IPRIA.

Industrial Capabilities in Victoria: Company Interviews Towards the end of 2002, 88 Victorian companies and organisations were interviewed about their industrial capabilities by Ms Anne Leahy, Dr Joanne Loundes, Dr Elizabeth Webster and Dr Jongsay Yong. The capabilities included manufacturing, design, information and communications technology, biotechnology, environment technologies and business services. The interview team found that the main requirements for the successful creation of a capability was the ability of the company to recruit and retain the best graduates from universities and technical schools, the ability to offer training to these graduates and the ability to financially support high and consistent levels of R&D over time. The main requirement for the successful use of a capability was effective company networking, conductive work cultures, supportive government regulations and the provision of complementary specialised training.

The Occupational Career Paths of Australian Tradesmen In this study, Dr Elizabeth Webster and Ms Kelly Jarvis consider whether the high rates of both unqualified tradespeople and attrition of qualified tradespeople from trade work necessarily represent inefficiencies in the skill acquisition process for the skilled trades. They argue that it is possible that there are three distinct streams of trade workers: a lower stream, which requires the least academic and vocational skills and embodies short and flat experience profiles; a higher stream which demands more academic and vocational expertise and steeper experience profiles; and a third, more traditional trade stream which lies in between. This view is supported by persistent patterns in tradesmenâ&#x20AC;&#x2122;s career paths. Polarisation into the highest and lowest streams appears to be increasing over time. If valid, these findings suggest that there should be several tiers of training for the trade labour markets.

TOWARDS OPPORTUNITY AND PROSPERITY CONFERENCE, 2002 On 4 and 5 April 2002, the Melbourne Institute and The Australian held their first joint Economic and Social Outlook Conference, entitled ‘Towards Opportunity and Prosperity’. The sessions covered by the conference were: • • • • • • • • • • • • • • • • •

Setting the Scene: Australia’s Past, Present and Future Productivity and Growth in Australia Inequality in Australia: Trends and Causes Population, Fertility and Immigration The Trade Practices Act: Are We Becoming a Branch Office Economy? The New Labour Market The Environment: Should We Sign the Kyoto Protocol? Globalisation: World Trade, Living Standards and Inequality Knowledge, Education, Science and Innovation Mr Ian Macfarlane, Governor of the Reserve Bank, Unemployment addressing the Gala Dinner Issues in Health Policy The Business Cycle and the Economic Outlook Welfare Reform: The Case of Lone Parents Reforming the Higher Education System Work and Family Conflicts and Fertility: Implications for Public Policy Ageing and Retirement Towards Opportunity and Prosperity: The Way Ahead

The speech at the Gala Dinner was given by the Governor of the Reserve Bank, Mr Ian Macfarlane, who talked about ‘The Australian Economy: Past, Present and Future’. Speakers (listed on page 30) included leading academics, politicians, public servants, business people, and representatives of community groups. International experts joined together with leading Australian academics to discuss these major issues with important public figures. The sessions were well attended over the two days of the conference, with over 400 delegates in attendance. The conference was covered extensively in The Australian and other media; and a book, Hard Heads, Soft Hearts, edited by Professor Peter Dawkins and Mr Paul Kelly, was released in February 2003.

Mr Tony Abbott spoke at three sessions of the conference

Mr Simon Crean addressing the conference lunch

Australian-Based Speakers and Chairs His Excellency the Right Reverend Dr Peter Hollingworth AC OBE The Hon. Anthony Abbott MP The Hon. Kevin Andrews MP The Hon. Steve Bracks MP The Hon. Simon Crean MP Mr Mark Latham MP Ms Jenny Macklin MP Dr Brendan Nelson MP Senator Natasha Stott Despoja MP Mr Wayne Swan MP Senator The Hon. Amanda Vanstone MP Mr Chris Richardson (Access Economics) Dr Vince FitzGerald (Allen Consulting Group) Ms Mary Ann Oâ&#x20AC;&#x2122;Loughlin (Allen Consulting Group) Mr Dennis Trewin (Australian Bureau of Statistics) Mr Lyndon Rowe (Australian Chamber of Commerce and Industry) Professor Allan Fels AO (Australian Competition and Consumer Commission) Mr Don Henry (Australian Conservation Foundation) Dr John Ainley (Australian Council for Educational Research) Dr Gary Marks (Australian Council for Educational Research) Ms Sharan Burrow (Australian Council of Trade Unions) Dr Peter Jonson (Australian Institute for Commercialisation) Mr David Stanton (Australian Institute of Family Studies) Mr Greg Bourne (BP Australasia) Father Nic Frances (Brotherhood of St Laurence) Dr John Schubert (Business Council of Australia) Ms Katie Lahey (Business Council of Australia) Mr Stan Wallis AO (Coles Myer) Dr Rod Maddock (Commonwealth Bank of Australia) Dr Robin Batterham (Commonwealth Chief Scientist) Dr Ken Henry (Department of the Treasury) Mr Phillip Toyne (Eco Futures) Professor Ian Lowe AO (Griffith University) Dr Richard Scotton AO (Health Economist) Associate Professor Alison McClelland (La Trobe University) Mr Tony Cole (Mercer Investment Consulting) Professor Jeff Richardson (Monash University) Mr Graeme Samuel (National Competition Council) Dr Elspeth McInnes (National Council for Single Mothers and Their Children) Professor Ann Harding (NATSEM) Mr Gary Banks (Productivity Commission) Mr Dean Parham (Productivity Commission) Mr Garth Pitkethly (Productivity Commission) Mrs Helen Owens (Productivity Commission) 30

Professor Judith Sloan (Productivity Commission) Mr Ian Macfarlane (Reserve Bank of Australia) Dr David Gruen (Reserve Bank of Australia) Mr David Armstrong (The Australian) Mr Robert Gottliebsen (The Australian) Mr Paul Kelly (The Australian) Mr Mike Steketee (The Australian) Mr Michael Stutchbury (The Australian) Mr Alan Wood (The Australian) Ms Kate Legge (The Australian) Ms Jane Richardson (The Australian) Dr Michael Keating AC (The Australian National University) Emeritus Professor Peter Karmel AC CBE (The Australian National University) Professor Bruce Chapman (The Australian National University) Professor Steve Dowrick (The Australian National University) Professor Ross Garnaut AO (The Australian National University) Professor Robert Gregory AO (The Australian National University) Professor Peter McDonald (The Australian National University) Professor Warwick McKibbin (The Australian National University) Professor Adrian Pagan (The Australian National University) Professor Glenn Withers AO (The Australian National University) Professor Jeff Borland (The University of Melbourne) Professor Peter Dawkins (The University of Melbourne) Professor John Freebairn (The University of Melbourne) Professor Alan Gilbert (The University of Melbourne) Dr Don Harding (The University of Melbourne) Professor Ian Harper (The University of Melbourne) Associate Professor David Johnson (The University of Melbourne) Professor Ian McDonald (The University of Melbourne) Mrs Fay Marles AM (The University of Melbourne) Ms Rosanna Scutella (The University of Melbourne) Dr Peter Summers (The University of Melbourne) Dr Roger Wilkins (The University of Melbourne) Professor Ross Williams (The University of Melbourne) Professor Mark Wooden (The University of Melbourne) Mr Bill Evans (Westpac Banking Corporation)

International Speakers Dr Gary Burtless (The Brookings Institution) Professor Robert Drago (Pennsylvania State University) Professor Alan Duncan (University of Nottingham) Mr Mike Moore (World Trade Organisation)

PURSUING OPPORTUNITY AND PROSPERITY CONFERENCE, 2003 Following the successful 2002 Towards Opportunity and Prosperity Conference, the Melbourne Institute and The Australian will again bring together high-level experts, policy makers and business people to help set the agenda for Australia’s future at the Pursuing Opportunity and Prosperity Conference. This conference will be reported on fully in the 2003 Annual Report; however, as planning has already begun in 2002, we will only provide a brief report on it here. As well as a stocktake of the economic and social outcomes in Australia, and an assessment of the future economic and social outlook, the conference will cover such issues as: • • • • • • • • • • •

Higher education reform Welfare reform The state school system Health insurance: Are we heading for a poor safety net system? Fiscal policy Practical reconciliation and indigenous economic development Competition policy The proposed Free Trade Agreement with the United States Water scarcity Innovation and commercialisation in Australia Child friendly communities

Speakers will include leading academics, politicians, public servants, business people and representatives of community groups. Some confirmed speakers include international experts, Professor Alan Duncan (University of Nottingham) and Professor David Greenaway (University of Nottingham), as well as leading Australian academics, Professor Ross Garnaut (ANU), Professor Robert Gregory (ANU), Professor Ann Harding (NATSEM), Dr Michael Keating (ANU), Professor Stephen King (Melbourne Business School), Professor Peter Saunders (The Centre for Independent Studies), Dr Elizabeth Savage (University of Technology, Sydney) and Professor Alan Gilbert (The University of Melbourne). Speakers from the Melbourne Institute include Professor Peter Dawkins, Dr Peter Summers and Professor Mark Wooden as well as Adjunct Professors Jeff Borland and John Freebairn. The leading politicians to be involved include Federal Government Ministers, Mr Tony Abbott, Senator Amanda Vanstone, Dr Brendan Nelson and Mr Kevin Andrews, and a member of the Opposition, Ms Jenny Macklin. Many other leading figures from government and business will also be speakers, discussants or chairs, such as Dr Ken Henry (The Treasury), Professor Allan Fels (The Australian and NZ School of Government), Dr Neil Byron (Productivity Commission), Mr Greg Combet (ACTU), Mr Saul Eslake (ANZ Banking Group), Mr Bill Evans (Westpac Banking Corporation), Ms Pru Goward (Human Rights and Equal Opportunity Commission), Professor Fiona Stanley (Australian Research Alliance for Children and Youth), Mr Graeme Samuel (National Competition Council), Mr Ian Macfarlane (Reserve Bank of Australia) and Mr Patrick McClure (Mission Australia).

CONTRIBUTIONS TO POLICY ANALYSIS AND DEBATES One of the Melbourne Institute’s strategic objectives is to contribute strongly to economic policy analysis, discussion and development in Australia. Examples in 2002 included: • Professor Peter Dawkins continued as a member of the Welfare Reform Consultative Forum which addresses the federal government. • The Canberra forum in April focused on the business cycle and the economic outlook, and was a continuation of a session at the Economic and Social Outlook Conference. • The Melbourne and Canberra forums in June focused on releasing the proceedings of the Roundtable on Health Policy in association with the Productivity Commission. About 300 people attended either the Melbourne or Canberra forums. • The Canberra forum in October saw the launch of HILDA by the Minister for Family and Community Services, Senator Amanda Vanstone. • The Melbourne forum in October saw the launch by the Minister for Employment and Workplace Relations, Mr Tony Abbott, of a study by Dr Don Harding on unfair dismissal. • The Melbourne and Canberra forums in December focused on competition policy. • The Towards Opportunity and Prosperity Conference, conducted jointly with The Australian, was a major event. Over 350 people attended, and we had a very impressive list of speakers. Extensive coverage in The Australian gave the conference a very high profile. • The Melbourne Institute had a central role in setting up a new multidisciplinary centre concerned with intellectual property: the Intellectual Property Research Institute of Australia (IPRIA) was officially launched in October. • The Melbourne Institute was a partner of the Productivity Commission on the Health Policy Roundtable in March. • The Victorian Department of Treasury and Finance commissioned two studies from the Melbourne Institute on health policy issues as well as four on education issues. • Our ongoing economic indicators (for example, Westpac – Melbourne Institute Consumer Sentiment Index and Westpac – Melbourne Institute Indexes of Economic Activity) and forecasts continued to create considerable interest. • The Melbourne Institute Social Policy Research Agenda continued to involve substantial research to endeavour to inform current social policy discussions. • Professors Peter Dawkins and Bruce Chapman were commissioned, in June, to give a seminar presentation at the Department of Education, Science and Training on ‘Financing Higher Education’. Subsequently, Peter Dawkins has written a submission to the Higher Education Review. • Ms Penelope Smith and Dr Peter Summers presented at the 22nd International Symposium on Forecasting in Dublin in June. • Dr Don Harding, Ms Penelope Smith and Dr Peter Summers all contributed papers to the Econometric Society Australian Meetings in Brisbane in July. • Dr Don Harding in collaboration with Professor Adrian Pagan contributed a paper to the Econometric Society Latin American Meetings in Sao Paulo in July. • Dr Don Harding and Professor Adrian Pagan were invited to be speakers at a conference on the Wealth of Nations: Extending the Tinbergen Heritage at Erasmus University. • Dr Don Harding was invited to speak at the EUROSTAT Colloquium on Modern Tools of Business Cycle Analysis in November. • In November, Dr Yi-Ping Tseng, Professor Jeff Borland, Associate Professor David Johnson and Dr Guyonne Kalb presented results of the research for FaCS at a two-day conference in Canberra. • Associate Professor David Johnson gave a paper on spillovers in higher education to a conference on Higher Education in Canberra in September. 32

The Australian, 25 February 2002

Many approaches to a bright, inclusive future Professor Peter Dawkins on the rise of inequality of household incomes

The Age, 25 March 2002

Survey support for mothers at home ISSS survey report by Dr Mariah Evans and Professor Jonathan Kelley

The Australian, 4 April 2002

Hoping to put the smile into statistics On Mr Ian Macfarlane’s speech at the Towards Opportunity and Prosperity Conference Gala Dinner

The Weekend Australian, 6 April 2002

Hard heads, soft hearts

Grey expectations Mr Alan Wood on the Towards Opportunity and Prosperity Conference

Professor Peter Dawkins on a prosperous economy with a compassionate society

The Australian, 14 May 2002

Poor sop for the worst off Professor Peter Dawkins on low-income workers and the Melbourne Institute Tax and Transfer Simulator

The Australian Financial Review, 8 July 2002

Passion for property still rising On the ING – Melbourne Institute Household Saving Report

Sydney Morning Herald, 15 August 2002

Consumers hold on to their cash amid economic gloom On the Westpac – Melbourne Institute Survey of Consumer Sentiment

Sydney Morning Herald, 25 September 2002

Lack of cheap fares hits budget tourism On The Working Holiday Maker Scheme and the Australian Labour Market report by Dr Elizabeth Webster and Mrs Glenys Harding

Sydney Morning Herald, 19 October 2002

As we really are On the Household, Income and Labour Dynamics in Australia (HILDA) Survey

MELBOURNE INSTITUTE BUSINESS ECONOMICS FORUM IN MELBOURNE In 2002, the Melbourne Institute Business Economics Forum in Melbourne continued into its sixth year and generated considerable interest. Memberships remained at 22. The four quarterly forums were exceptionally well attended. Breakfasts were held on 5 April (combined with the Towards Opportunity and Prosperity Conference), 25 June, 17 October and 5 December 2002, at the Hotel Sofitel, Grand Hyatt or Park Hyatt in Melbourne. At each forum, the Melbourne Instituteâ&#x20AC;&#x2122;s forecasts were presented and discussed, and special topics were canvassed Dr Peter Summers delivering the quarterly forecasts such as health policy, the effect of unfair dismissal on small and medium businesses, competition law and the economic prosperity of Victoria. In addition to Melbourne Institute researchers, Dr Don Harding and Dr Peter Summers, a number of external commentators were involved in the forums. These included Professor Stephen King (University of Melbourne), Mr Ross Jones (ACCC), Dr Steven Kates (ACCI), Mr Tony Abbott (Minister for Employment and Workplace Relations), Dr Gary Burtless (The Brookings Institution), Mrs Helen Owens (Productivity Commission) and Ms Linda Rubinstein (ACTU). The chairman was Mr Tony Cole (Mercer Investment Consulting).

Members Gold

Associate

Business Council of Australia Department of Innovation, Industry and Regional Development Department of Treasury and Finance Mercer Investment Consulting The University of Melbourne

ANZ Banking Group CEDA City of Melbourne Department of Premier and Cabinet Holden IBISWorld MindShare Australia National Competition Council Productivity Commission Shell Australia Urban Land Corporation Victorian Workcover Authority

Individual Institute for Private Enterprise Moreland City Council National Institute of Accountants The Salvation Army Victorian Auditor Generalâ&#x20AC;&#x2122;s Office

MELBOURNE INSTITUTE PUBLIC ECONOMICS FORUM IN CANBERRA In 2002, the Melbourne Institute Public Economics Forum in Canberra continued into its fourth year and generated considerable interest. The four quarterly forums were well attended. Luncheons were held on 24 April, 27 June, 15 October and 3 December 2002 at the Hyatt Hotel and Parliament House in Canberra. At each luncheon, the Melbourne Instituteâ&#x20AC;&#x2122;s news was presented, and special topics were canvassed, such as business cycles and the economic outlook, health policy, the release of the HILDA First Wave Data Set and competition law. In addition to Melbourne Professor Allan Fels at the quarterly luncheon 4.02 on the Institute researchers, Dr Don Harding, Dr Peter Summers and future of competition law in Australia Professor Mark Wooden, guest speakers included Professor Stephen King (Melbourne Business School), Dr Steven Kates (ACCI), Ms Kerry Flanagan (Department of Family and Community Services), Professor Bruce Chapman (ANU), Professor Allan Fels (ACCC), Dr Ken Henry (Commonwealth Treasury), Mrs Helen Owens (Productivity Commission) and Senator Amanda Vanstone (Minister for Family and Community Services). The chairmen were Dr Michael Keating (ANU) and Dr Ken Henry (Commonwealth Treasury).

Members Gold Australian Taxation Office Department of Family and Community Services Department of Industry, Tourism and Resources ING Mercer Investment Consulting Parliamentary Library Reserve Bank of Australia Westpac Banking Corporation

Associate Australian Bureau of Statistics Australian Public Service Commission Department of Transport and Regional Economics

Individual Australian Bureau of Statistics Department of Defence Department of Employment and Workplace Relations Department of the Parliamentary Reporting Department of Prime Minister and Cabinet Health Services Australia New Zealand High Commission Queensland Investment Corporation

MELBOURNE INSTITUTE’S 40TH ANNIVERSARY December 15 was the 40th anniversary of the foundation of the Melbourne Institute. In the early 1960s economists at the University of Melbourne were looking at ways to increase the profile of applied economic research at the University. A visiting academic from Cambridge, Professor Ronald Henderson, proposed the establishment of a group along the lines of the Department of Applied Economics at Cambridge. When the University subsequently adopted this proposal and asked Ronald Henderson to return to Australia to head up the new research institute, he readily accepted the challenge. Ronald Henderson became the founding Director of Australia’s first independent institute for applied economic research on 15 December 1962. In 1969 this new Institute of Applied Economic Research amalgamated with the Department of Research in Social Studies and became the Institute of Applied Economic and Social Research. In 1972 the Institute was formerly established as a research department within the University with its own university statute. Ronald Henderson was foundation Director of the Institute for From left: Ms Daina McDonald, Mrs Jean McCaughey 17 years, until his retirement in 1979. Following his retirement, and Mrs Mary Henderson at the celebration in Professor Ronald Henderson’s successors were Dr Duncan December 2002 Ironmonger, Acting Director from 1979 to 1984; Professor Peter Dixon, Director from 1984 to 1991; and Professor Richard Blandy, Director from 1992 to 1994. In 1996 Professor Peter Dawkins became Director and the name of the Institute was formally changed to the Melbourne Institute of Applied Economic and Social Research. In the 1990s between appointments, Professor Ian Harper and Professor Peter Lloyd served as Acting Directors. To help celebrate this important milestone event, the 40th anniversary of the Melbourne Institute, current staff of the Melbourne Institute invited all previous employees to join them at a cocktail function at University House on 12 December. At this function, memories were shared, friends reacquainted and the Melbourne Institute’s successes over its 40-year history celebrated. Speakers at this event were Dr Richard Scotton and Ms Daina McDonald, both former staff, and the present Deputy Director, Associate Professor David Johnson. In February 2003 a further celebration, in the form of a formal dinner at Ormond College, took place. On this occasion, as well as celebrating the past, the future research agenda of the Melbourne Institute was a major focus. Guest speakers included Dr Ken Henry, Secretary of the Treasury, and Mr Paul Kelly, Editor-at-Large, The Australian. The speech by Dr Ken Henry was published in the Melbourne Institute’s working paper series in 2003. As part of this 40th anniversary celebration in February 2003, Mr Paul Kelly spoke about the book he co-edited with Professor Peter Dawkins, which was launched and is based on the proceedings of the Towards Opportunity and Prosperity Conference which was held in April 2002. The title of this book, Hard Heads, Soft Hearts: A New Reform Agenda for From left: Dr Ken Henry, Professor Peter Dawkins, Mr Paul Kelly and Dr Australia, is used as the Melbourne Institute’s motto: Hard Heads, Soft Hearts. This phrase is drawn from a Peter Jonson at the celebration in February 2003 book by US economist Alan Blinder. Before then the famous British economist Alfred Marshall coined the phrase ‘Cool Heads, Warm Hearts’ representing much the same idea. It also reflects the Melbourne Institute’s fundamental belief in the need to be hard-headed in the analysis, but to have soft-hearted objectives. It is our plan that this idea will continue to shape the research agenda at the Melbourne Institute in the years to come. 36

PUBLICATIONS BY SUBSCRIPTION Melbourne Institute Economic and Social Journals Australian Economic Review in 2002 In 2002 Professor Ian McDonald joined the panel of joint editors for contributed papers, replacing Professor Stephen King who retired at the end of 2001 after three years. Dr Nilss Olekalns remained ‘For the Student’ editor and Associate Professor David Johnson remained managing editor, ‘Data Survey’ editor, and ‘Policy Forum’ editor. The format of the Australian Economic Review continued with the style that has been developed over recent years. The ‘Contributed Articles’ section attracted a weaker rate of submission; however it followed a reasonably strong year and an alternating pattern of submissions has been typical of the Review. ‘Policy Forums’ were published in four issues in 2002, and included ‘The Job Network’, ‘Childcare Policy’, ‘Commonwealth–State Funding Arrangements’, and ‘Australia’s Competition Laws’. Each issue contained a ‘For the Student’ article: ‘Population Ageing and the Role of Immigration’, ‘Convergence: Do Poor Countries Tend to Catch Up with the Rich?’, ‘The Public Accounts and Fiscal Policy’, and ‘European Economic and Monetary Integration and the Euro’. There was one ‘Data Survey’ article, ‘The Household, Income and Labour Dynamics in Australia (HILDA) Survey: Wave 1’. In 2002 the Review published 43 articles, compared to 45 published in 2001. The size of the Review was a little less with a total of 462 pages. In Table 2, we show the distribution of articles by type for the last four years. In 2002 we received 35 submissions in the Contributed Articles section, less than the previous year’s 56 submissions. Table 3 shows the number of submissions for the past four years. The acceptance rate for papers that have been published has been 34 per cent over the past four years (papers published as a percentage of submissions). Table 2: Published Articles, 1999 to 2002 Type of Article Invited Articles

1999

2000

2001

2002

Contributed Articles

Policy Forum

Data Surveys

For the Student Pages

422

387

487

462

2001

2002

Table 3: Submissions, 1999 to 2002(a) Contributed Articles

1999

2000

Brought forward from previous year(b)

Submissions during year

Accepted: Published

Accepted: In queue

Rejected/withdrawn

Resubmit

In process

Decisions made

Notes: (a) Contributed articles only. (b) Sum of acceptances in queue, re-submissions and articles in process.

Australian Social Monitor The Australian Social Monitor aims to monitor and analyse important social trends and attitudes. The Australian Social Monitor is published with support from the International Social Science Surveys/Australia and ANUTECH at the Australian National University. Between us several important social and economic surveys are conducted. These include the IsssA which is Australia’s leading academic survey and co-founder of the 34-nation International Social Survey Programme. Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends The Quarterly Bulletin is sponsored by Mercer Investment Consulting and provides an authoritative analysis of international, national and state economic environments, with a particular focus on the state economies and on reading the business cycle. In 2002, three issues covered a special topic considered to be of particular interest. The special topics included issues in education policy, evaluation and development of the Melbourne Institute forecasting model, and enhancing the evidence base for economic and social policy in Australia, using the Household, Income and Labour Dynamics in Australia (HILDA) Survey.

Melbourne Institute Economic and Social Indicators Westpac – Melbourne Institute Indexes of Economic Activity Published monthly the Westpac – Melbourne Institute Indexes of Economic Activity examines movements in leading, coincident and lagging indicators of economic activity in Australia, together with comparative data from overseas. It also includes a quarterly leading index of inflation. Indices of economic activity are designed to enhance the decision making process of financial and business managers by anticipating and identifying turning points in the economy. Each index blends several variables that reflect different aspects of the economy; their combination is intended to give a more representative picture than any one indicator would by itself. Westpac – Melbourne Institute Survey of Consumer Sentiment The Consumer Sentiment Index is the average of five responses on consumers’ evaluation of their household financial situation over the past year, the coming year and the next five years, anticipations of economic conditions over the coming year and the next five years and a view on buying conditions for major household items; assessments of future unemployment are also recorded. Each quarter, consumers are also surveyed on their views on buying conditions for cars and dwellings, the wisest place for savings and economic news recall. This report is produced monthly. Westpac – Melbourne Institute Survey of Consumer Sentiment: NSW, Victoria, Queensland, Western Australia Each quarter we present the same consumer sentiment data as in the Westpac – Melbourne Institute Survey of Consumer Sentiment (except news recall data) on consumer sentiment for New South Wales, Victoria, Queensland and Western Australia. Melbourne Institute Survey of Consumer Inflationary Expectations The Consumer Inflationary Expectations measures are designed to represent the average householder’s expected rate of consumer price rises over the coming 12 months. The survey is a direct measure of inflationary expectations as consumers are surveyed on whether and by how much they believe prices will go up or down. The report is produced monthly.

ING – Melbourne Institute Household Saving Report The Household Saving Report contains data on householders’ current saving behaviour, reasons for saving, current household asset and debt structure and their assessment of the best ways to hold assets. The report is produced quarterly. Melbourne Institute Wages Report The Wages Report records employees (self-reported) wage changes over the previous 12-month period. This survey has been designed to capture the growth in wage rates. The report is produced quarterly. TD Securities – Melbourne Institute Experimental Monthly Inflation Gauge TD Securities and the Melbourne Institute have developed a monthly inflation indicator to give markets and policy makers a monthly update on inflation trends. Based on the ABS methodology of calculating the quarterly consumer price index, the TD Securities – Melbourne Institute Experimental Monthly Inflation Gauge estimates month to month price movements for a wide-ranging basket of goods and services across main capital cities. This report is produced monthly. Poverty Lines: Australia Poverty Lines: Australia is a quarterly newsletter that updates the ‘Henderson Poverty Line’ as defined in the 1973 Commonwealth Commission of Inquiry into Poverty. The Poverty Lines are standard reference material for those concerned with social welfare policy in Australia. The income levels of various sized families are used to ascertain when and where a poverty situation occurs.

Other Melbourne Institute Publications Produced in 2002 Household, Income and Labour Dynamics in Australia (HILDA) Survey Annual Report 2002 The Household, Income and Labour Dynamics in Australia (HILDA) Survey is a household-based panel survey, which aims to track all members of an initial sample of households over an indefinite life. Further, the sample is automatically extended over time by ‘following rules’ that add to the sample any new children of members of the selected households as well as new household members resulting from changes in the composition of the original households. The first wave of the survey was conducted in the second half of 2001. This publication includes highlights from the first wave, including publications, presentations and technical papers for 2002. Melbourne Institute News As the Melbourne Institute has three major research programs, a wide range of publications, and a number of conferences and forums each year, this publication was introduced in late 1999 to keep people abreast of various developments at the Melbourne Institute. Two issues were produced in 2002. Melbourne Institute Working Paper Series The Melbourne Institute working papers are indicative of research projects undertaken within the Melbourne Institute. In 2002, 29 working papers were produced.

STAFF PUBLICATIONS, SEMINARS, PRESENTATIONS AND MEDIA COVERAGE, 2002 Books Creedy, J, Duncan, A, Harris, MN, Scutella, R, Microsimulation Modelling of Taxation and the Labour Market: the Melbourne Institute Tax and Transfer Simulator, Edward Elgar Publishing, Cheltenham, United Kingdom, 2002. Evans, M, Kelley, J, Australian Economy and Society, 2001: Education, Work and Welfare, Federation Press, Sydney, Australia, 2002.

Contributions to Books Evans, M, Headey, B, Kelley, J, Mearns, M, ‘Public Opinion on Britain, a Directly Elected President, and an Australian Republic’, in M Mackerras and J Warhurst eds, Constitutional Politics: the Republican Referendum and the Future, University of Queensland Press, St Lucia, Australia, 2002, 113–130. Headey, BW, ‘The Psychological Impact of Unemployment: the Economic and Social Costs of Unemployment’, in P Saunders and R Taylor eds, The Price of Prosperity, University of New South Wales Press, Sydney, Australia, 2002, 213–225. Johnson, DT, ‘Arbeitsmarktpolitik in Australien’, in F Frick ed, Arbeitsverwaltung im Wandel-Erfahrungen aus 15 Landern im Vergleich, Verlag Bertelsmann Stiftung, Gutersloh, Germany, 2002, 23–36. Wooden, MP, ‘The Changing Labour Market and Its Impact on Work and Employment Relations’, in R Callus ed, Working Futures: the Changing Nature of Work and Employment Relations in Australia, Federation Press, Sydney, Australia, 2002, 51–69.

Refereed Journal Articles Creedy, J, Dawkins, PJ, ‘Comparing Tax and Transfer Systems: How Might Incentive Effects Make a Difference?’, Economic Record, Burwood, Australia, Economic Society of Australia, 2002, 78:97–108. Dawkins, PJ, ‘The “Five Economists” Plan: the Original Idea and Further Developments’, Australian Journal of Labour Economics, Murdoch, Australia, Murdoch University, 2002, 5:203–230. Dawkins, PJ, ‘Welfare Reform and Jobless Households in Australia’, Australian Journal of Labour Economics, Murdoch, Australia, Murdoch University, 2002, 5:531–547. Dawkins, PJ, Gregg, P, Scutella, R, ‘The Growth of Jobless Households in Australia’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:133–154. Duncan, A, Harris, MN, ‘Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia’, Economic Record, Burwood, Australia, Economic Society of Australia, 2002, 78:264–276. Evans, M, ‘Fair Pay? Global Rewards and Rewards for Particular Aspects of Work’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:87–92. Evans, M, Kelley, J, ‘Changes in Public Attitudes to Maternal Employment: Australia 1984 to 2001’, People and Place, Melbourne, Australia, Centre for Population and Urban Research, Monash University, 2002, 10:42–57. Evans, M, Kelley, J, ‘Does Education Add Value? Ideal Rewards to Education in Three Nations’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:100–112. Evans, M, Kelley, J, ‘National Pride in the Developed World: Survey Data from 24 Other Nations’, International Journal of Public Opinion Research, United Kingdom, Oxford University Press, 2002, 14:303–338. Evans, M, Kelley, J, ‘When Human Life Begins: Public Perceptions’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:15–20.

Evans, M, Kelley, J, ‘Which Older Australian Men Work?’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:7–14. Evans, M, Kelley, J, ‘Women’s Employment in Middle and Old Age’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:39–51. Evans, M, Kelley, J, Zanjani, E, ‘Moral Views on the Use of Foetal Tissue Depend on the Source of the Cells’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:57–67. Evans, M, Kelley, J, Zanjani, E, ‘Strong Public Support for Treatment and Research using Fetal Tissue, Particularly among Those Accepting the Scientific World-View’, Journal of Hematotherapy and Stem Cell Research, United States of America, Mary Ann Liebert, Inc, 2002, 11:711–717. Grabka, M, Headey, BW, Kelley, J, Reddy, P, Tseng, Y, ‘Pet Ownership is Good for Your Health and Saves Public Expenditure Too: Australian and German Longitudinal Evidence’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:93–99. Harding, AD, Pagan, A, ‘Dissecting the Cycle: a Methodological Investigation’, Journal of Monetary Economics, The Netherlands, Elsevier Science BV, 2002, 49:365–381. Harris, MN, Knights, S, Loundes, JE, ‘Dynamic Relationships in the Australian Labour Market’, Economic Record, Burwood, Australia, Economic Society of Australia, 2002, 78:284–298. Harris, MN, Konya, L, Matyas, L, ‘Modelling the Impact of Environmental Regulations on Bilateral Trade Flows: OECD, 1990–1996’, World Economy, Oxford, United Kingdom, Blackwell Publishers Ltd, 2002, 25:387–405. Harris, MN, Loundes, JE, Webster, EM, ‘Determinants of Household Saving in Australia’, Economic Record, Burwood, Australia, Economic Society of Australia, 2002, 78:207–223. Johnson, DT, Webster, EM, ‘The Equity Effects of Labour Market Programs’, Australian Bulletin of Labour, Australia, National Institute of Labour Studies Inc, 2002, 28:198–227. Kelley, J, Evans, M, ‘Family Background and Occupational Success in Australia’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:73–78. Kelley, J, Sikora, J, ‘Attitudes to Private and Public Ownership in East and West: Bulgaria, Poland, Australia and Finland, 1994/97’, Soviet and Post-Soviet Review, United States of America, Charles Schlacks Jr Publisher, 2002, 26:16–22. Quah, E, Saw, SLC, Tan, KC, Yong, J, ‘The Social Cost of Smoking in Singapore’, Singapore Medical Journal, Singapore, Singapore Medical Association, 2002, 43:340–344. Tseng, Y, Webster, EM, ‘The Determinants of Relative Wage Changes in Australia’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:70–84. Watson, SN, Wooden, MP, ‘What’s in It for Economists?’, Australian Journal of Labour Economics, Murdoch, Australia, Murdoch University, 2002, 5:397–417. Weston, R, Wooden, MP, ‘HILDA Has Arrived! New Survey on Australian Households and Families’, Family Matters, Melbourne, Australia, Australian Institute of Family Studies, 2002, 63:66–73. Wooden, MP, ‘Unemployment in an Age of Prosperity’, Economic and Labour Relations Review, Australia, Centre for Applied Economic Research, 2002, 13:179–195.

Other Journal Articles Dawkins, PJ, ‘The OECD Review of Innovations in Labour Market Policies: the Australian Way’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:85–91. Dockery, A, Webster, EM, ‘Long-Term Unemployment and Work Deprived Individuals: Issues and Policies’, Australian Journal of Labour Economics, Murdoch, Australia, Murdoch University, 2002, 5:175–194. Doiron, D, Kalb, GR, ‘Demand for Childcare Services and Labour Supply in Australian Families’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:204–213. Evans, M, ‘Adult Asthma’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:14. Evans, M, ‘Time to Care’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:6. Evans, M, Kelley, J, ‘Aims for Scientists’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:83–84.

Evans, M, Kelley, J, ‘Attitudes towards Childcare in Australia’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:188–196. Evans, M, Kelley, J, ‘Australian Attitudes to Research Using Foetal Tissue’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:23–24. Evans, M, Kelley, J, ‘Creating Prosperity for All?’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:22–23. Evans, M, Kelley, J, ‘Issues in Education Policy’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 1.02:16–22. Evans, M, Kelley, J, ‘Joy and Peace’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:51. Evans, M, Kelley, J, ‘Social Capital Indicators: Active Neighbouring, 1989–2001’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:80–81. Evans, M, Kelley, J, ‘When Does Human Life Begin?’, Australasian Science, Victoria, Australia, Control Publications, 2002, 23(9):27–29. Evans, M, Kelley, J, Zanjani, E, ‘Harvesting Foetal Tissue: Public Support Depends on the Source’, Australasian Science, Victoria, Australia, Control Publications, 2002, 23(10):31–33. Freidin, SP, Watson, SN, Wooden, MP, ‘Enhancing the Evidence Base for Economic and Social Policy in Australia: the Household, Income and Labour Dynamics in Australia (HILDA) Survey’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 3.02:17–20. Freidin, SP, Watson, SN, Wooden, MP, ‘The Household, Income and Labour Dynamics in Australia (HILDA) Survey: Wave 1’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:339–348. Frentzel-Zagorska, J, Kelley, J, ‘Worth the Risk?’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:13–14. Fry, TRL, Samson, DA, ‘Industrial Relations Reform and Firm Performance’, Australian Chief Executive, Melbourne, Australia, CEDA, 2002, October:44–45. Johnson, DT, ‘Introduction to the Policy Forum on Commonwealth–State Funding Arrangements’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:287–289. Kelley, J, ‘Catholics’ Attitudes to Research Using Foetal Tissue’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:24–25. Kelley, J, ‘Missing on Parents’ Party’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:115. Kelley, J, ‘Privatise Telstra?’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:55. Kelley, J, ‘Quarreling over Sex?’, Australian Social Monitor, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 5:54. Leahy, AE, Song, LL, Summers, PM, ‘Australia: Outcomes and Outlook’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 1.02:1–5. Leahy, AE, Song, LL, Summers, PM, ‘Australia: Outcomes and Outlook’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 2.02:1–5. Leahy, AE, Song, LL, Summers, PM, ‘Australia: Outcomes and Outlook’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 3.02:1–5. Leahy, AE, Song, LL, Summers, PM, ‘United States’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 1.02:6–8. Leahy, AE, Song, LL, Summers, PM, ‘United States’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 2.02:6–8.

Leahy, AE, Song, LL, Summers, PM, ‘United States’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 3.02:6–8. Leahy, AE, Song, LL, Summers, PM, ‘United States’, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, 4.02:6–8. Summers, PM, ‘Comment on "International Shocks and the Role of Domestic Policy in Australia"’, Australian Journal of Labour Economics, Perth, Australia, Murdoch University, 2002, 5:171–173. Summers, PM, ‘Review of “Trade, Jobs and Wages”’, Economic Record, Burwood, Australia, Economic Society of Australia, 2002, 78:113–115. Watson, SN, Wooden, MP, ‘The Household, Income and Labour Dynamics in Australia (HILDA) Survey: an Introduction’, Australian Social Policy, Canberra, Australia, Department of Family and Community Services, 2001–2002:79–99. Wooden, MP, ‘Childcare Policy: an Introduction and Overview’, Australian Economic Review, Melbourne, Australia, Blackwell Publishers Ltd, 2002, 35:173–179. Wooden, MP, ‘Individual Contract Employment’, Australian Chief Executive, Melbourne, Australia, CEDA, 2002, October:34, 38.

Conference Proceedings Johnson, DT, ‘Discussant of “Barriers to Evidence-Based Policy” in Health Care’, in G Banks, P Dawkins eds, Health Policy Roundtable, Conference Proceedings, Productivity Commission, 7–8 March 2002, Canberra, AusInfo, 2002:55–59.

Working Papers (full list including those authored by Associates) Borland, J, ‘New Estimates of the Private Rate of Return to University Education in Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 14/02. Borland, J, ‘Perceptions of Job Security in Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 16/02. Bosworth, D, Loundes, JE, ‘The Dynamic Performance of Australian Enterprises’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 3/02. Creedy, J, Johnson, DT, Valenzuela, R, ‘A Cost Function for Higher Education in Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 11/02. Dawkins, PJ, Gregg, P, Scutella, R, ‘Employment Polarisation in Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 9/02. Drago, R, Scutella, R, Varner, A, ‘Work and Family Directions in the US and Australia: a Policy Research Agenda’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 12/02. Fry, TRL, Jarvis, KM, ‘Are Pro-Reformers Better Performers?’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 18/02. Fry, TRL, Johnson, DT, ‘Factors Affecting Return to Work after Injury: a Study for the Victorian Workcare Authority, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 28/02. Harris, MN, Duncan, A, ‘Intransigencies in the Labour Supply Choice’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 17/02. Harris, MN, Tang, KK, Tseng, Y, ‘Optimal Employee Turnover Rate: Theory and Evidence’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 19/02. Johnson, DT, ‘Measuring the Local Impact of Electronic Gaming Machines’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 13/02. Johnson, DT, Kalb, GR, ‘Economic Analyses of Families: Existing Research Findings’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 27/02. Johnson, DT, Wilkins, RK, ‘The Net Benefit to Government of Higher Education: a “Balance Sheet” Approach’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 5/02.

Kalb, GR, ‘Estimation of Labour Supply Models for Four Separate Groups in the Australian Population’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 24/02. Kalb, GR, Scutella, R, ‘Estimation of Wage Equations in Australia: Allowing for Censored Observations of Labour Supply’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 8/02. Kalb, GR, Williams, J, ‘The Relationship between Juvenile and Adult Crime’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 4/02. Kew, HY, Kalb, GR, ‘The Effect of a Reduced Allowance and Pension Taper Rate: Policy Simulations Using the Melbourne Institute Tax and Transfer Simulator’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 25/02. Kew, HY, Kalb, GR, Scutella, R, ‘The Effect of a Reduced Family Payment Taper Rate: Policy Simulations Using the Melbourne Institute Tax and Transfer Simulator’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 26/02. Loundes, JE, ‘Business Use of the Internet in Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 20/02. Loundes, JE, ‘Cost Focused Firms and Internet Usage’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 29/02. Loundes, JE , Tseng, Y, Wooden, MP, ‘Industrial Relations Reform and Business Performance: an Introduction’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 2/02. Loundes, JE, Webster, EM, ‘Factors Affecting the Industrial Relations Climate in Australian Enterprises’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 7/02. Loundes, JE, Wooden, MP, ‘How Unreasonable Are Long Working Hours?’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 1/02. Rogers, M, ‘Firm Performance and Investment in R&D and Intellectual Property’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 15/02. Smith, PA, Summers, PM, ‘Regime Switches in GDP Growth and Volatility: Some International Evidence and Implications for Modelling’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 21/02. Song, LL, ‘Public Capital, Congestion and Private Production in Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 23/02. Tseng, Y, Wilkins, RK, ‘Reliance on Income Support in Australia: Prevalence and Persistence’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 6/02. Webster, EM, ‘Review of the Literature on Intellectual Capital and Intellectual Property’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Working Paper no. 10/02.

Reports Brown, S, Farrell, L, Harris, MN, Sessions, JG, ‘Risk Preference and Employment Contract Type’, Melbourne, Australia, Department of Economics, The University of Melbourne, 2002. Christie, AF, D’Aloisio, S, Gaita, KL, Howlett, MJ, Webster, EM, ‘Analysis of the Legal Framework for Patent Ownership in Publicly Funded Research Institutions’, Canberra, Australia, Commonwealth Department of Education, Training and Youth Affairs, 2002. Freidin, SP, Watson, SN, Wooden, MP, ‘HILDA Survey Coding Framework’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, HILDA Technical Paper 2/02. Fry, TRL, Watson, SN, ‘The Household, Income and Labour Dynamics in Australia (HILDA) Survey: Wave 1 Weighting’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, HILDA Technical Paper 3/02. Hammill, MD, Leahy, AE, ‘ING – Melbourne Institute Household Saving Report’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Quarterly Report.

Harding, AD, ‘The Effect of Unfair Dismissal Laws on Small and Medium Sized Business’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002. Harding, GM, Webster, EM, ‘The Labour Market Effects of Working Holiday Maker Residents’, Canberra, Australia, Commonwealth of Australia, 2002. Hillman, K, Marks, G, ‘Becoming an Adult: Leaving Home, Relationships and Home Ownership among Australian Youth’, Melbourne, Australia, Australian Council for Educational Research Press, 2002, LSAY 28. Leahy, AE, ‘Melbourne Institute Survey of Consumer Inflationary Expectations’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Monthly Report. Leahy, AE, ‘Retail Probe’, Sydney, Australia, IdeaWorks, 2002, Quarterly Report. Leahy, AE, ‘Westpac – Melbourne Institute Indexes of Economic Activity’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Monthly Report. Leahy, AE, ‘Westpac – Melbourne Institute Survey of Consumer Sentiment’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Monthly Report. Leahy, AE, ‘Westpac – Melbourne Institute Survey of Consumer Sentiment: NSW, Victoria, Queensland, Western Australia’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Quarterly Report. Leahy, AE, ‘Westpac – Melbourne Institute Unemployment Expectation Index’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Monthly Report. Leahy, AE, ‘Westpac – Melbourne Institute Wages Report’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, Quarterly Report. Watson, SN, Wooden, MP, ‘Assessing the Quality of the HILDA Survey Wave 1 Data’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, HILDA Technical Paper 4/02. Watson, SN, Wooden, MP, ‘The Household, Income and Labour Dynamics in Australia (HILDA) Survey: Wave 1 Survey Methodology’, Melbourne, Australia, Melbourne Institute of Applied Economic and Social Research, 2002, HILDA Technical Paper 1/02.

Staff Seminars and Presentations Caldwell, B, Jensen, B, Johnson, DT, ‘Scope for Productivity Improvement in Schools’, presented at Victorian Department of Treasury and Finance, 22 August 2002. Creedy, J, Kalb, G, ‘Measuring Welfare Changes with Nonlinear Budget Constraints in Continuous and Discrete Hours Labour Supply Models’, presented at ‘The European Association of Labour Economists Conference’, La Sorbonne, Université Paris I, Paris, 19–22 September 2002. Dawkins, P, ‘Getting Jobs into Jobless Households: Tax Credits, Welfare Reform and Wage Setting’, presented at Austrian Institute of Economic Research, 22 August 2002. Dawkins, P, ‘Reducing Unemployment, Joblessness and Inequality in Australia’, presented at Economic Studies Division, Brookings Institution, Washington DC, 23 October 2002. Dawkins, P, ‘Reducing Unemployment, Joblessness and Inequality in a Globalising Economy: The Case of Australia’, presented at Centre for Globalisation and Economic Policy, University of Nottingham, 14 October 2002. Dawkins, P, Scutella, R, Gregg, P, ‘The Growth of Jobless Households and the Polarisation of Employment in Australia’, presented at ‘Towards Opportunity and Prosperity Conference’, Melbourne Institute of Applied Economic and Social Research, Melbourne, 4 April 2002. Doiron, D, Kalb, G, ‘Childcare Costs and Labour Supply in Australian Families’, presented at ‘The Econometric Society Australasian Meeting’, Queensland University of Technology, Brisbane, 7–10 July 2002. Doiron, D, Kalb, G, ‘Childcare Costs and Labour Supply in Australian Families’, presented at ‘The Labour Econometrics Workshop’, Australian National University, Canberra, 9–10 August 2002. Frijters, P, Kalb, G, ‘Structural Analysis of Changes in Job Offer Arrival Rates and Wage Offers’, presented at ‘The Labour Econometrics Workshop’, Australian National University, Canberra, 9–10 August 2002. Johnson, DT, ‘Adjusting SES for Family Size’, presented at Department of Education, Science and Technology, Canberra, 22 August 2002. Johnson, DT, ‘Discussants Comments on “The Distributional Impact of Selected Commonwealth Outlays and Taxes, Review of Commonwealth–State Funding”’, presented at ‘National Forum on Review of Commonwealth–State Funding’, Canberra, 14 March 2002. 45

Johnson, DT, ‘Discussants Comments on “International Developments in Health Policy; the Dialogue of the Deaf, Barriers to Evidence Policy Making in Health Care”’, presented at ‘Health Policy Roundtable’, Productivity Commission and Melbourne Institute of Applied Economic and Social Research, Melbourne, 7–8 March 2002. Johnson, DT, ‘The Effect of Family Composition and Employment Patterns on the Distribution of Income’, presented at ‘Social Policy Research Workshop’, Canberra, 13–14 November 2002. Johnson, DT, ‘The Effects of Changes in Family Composition and Worklessness on the Distribution of Income in Australia’, presented at ‘Towards Opportunity and Prosperity Conference’, Melbourne Institute of Applied Economic and Social Research, Melbourne, 4 April 2002. Johnson, DT, ‘The Henderson Poverty Line’, presented at ‘Seminar on Poverty Measurement’, Australian National University, Canberra, 5 November 2002. Johnson, DT, ‘Review of PARK Model’, presented at ‘Economic Briefing Series’, Victorian Department of Treasury and Finance, 14 February 2002. Johnson, DT, ‘Spillovers in Higher Education’, presented at ‘The Financial Future of Australia’s Universities’, National Institute of Social Sciences and the Centre for Economic Policy Research, Australian National University, Canberra, 11–12 September 2002. Kalb, G, ‘Developing Labour Supply Models as Input for the Melbourne Institute Tax and Transfer Simulator’, presented at ‘Social Policy Research Workshop’, Department of Family and Community Services, Canberra, 13–14 November 2002. Kalb, G, Maani, S, ‘Academic Performance and School Leaving Choices at Age Sixteen’, presented at ‘The Econometric Society Australasian Meeting’, Queensland University of Technology, Brisbane, 7–10 July 2002. Kalb, G, Scutella, R, ‘Estimation of Wage Equations in Australia’, presented at ‘The Econometric Society Australasian Meeting’, Queensland University of Technology, Brisbane, 7–10 July 2002. Scutella, R, ‘Moves to a Basic Income Flat Tax System in Australia: Implications for the Distribution of Income and the Supply of Labour’, presented at ‘PhD Conference for Economics and Business’, Australian National University, Canberra, 6–8 November 2002. Shields, M, Wooden, M, ‘The Importance of Where You Live for Life Satisfaction’, presented at ‘4th Australian Conference on Quality of Life’, Deakin University (Toorak), 29 November 2002. Song, LL ‘Public Capital, Congestion and Private Production in Australia’, presented at ‘The 31st Australian Conference of Economists’, Adelaide, 30 September – 3 October 2002. Summers, P, ‘Bayesian Evidence on the Structure of Unemployment’, presented at ‘Econometric Society Australasian Meetings’, Queensland University of Technology, Brisbane, 7–10 July 2002. Summers, P, ‘The Near-Term Economic Outlook’, presented at ‘Towards Opportunity and Prosperity Conference’, Melbourne Institute of Applied Economic and Social Research, Melbourne, 4–5 April 2002. Summers, P, ‘On the Interactions between Growth and Volatility in a Markov Switching Model of GDP’, presented at ‘22nd International Symposium on Forecasting’, Trinity College, Dublin, Ireland, 23–26 June 2002. Summers, P, ‘On the Interactions between Growth and Volatility in a Markov Switching Model of GDP’, presented at ‘School of Economics Seminar’, University of New South Wales, 30 August 2002. Tseng, Y, ‘The Effects of Changes to Activity Test Arrangements on Exit from Payments: Mutual Obligation’, presented at ‘FaCS Social Policy Research Workshop’, 14–15 November 2002. Tseng, Y, ‘The Effects of Changes to Activity Test Arrangements on Exit from Payments: Mutual Obligation’, presented at ‘ALMR Workshop’, 9–10 December 2002. Watson, N, Wooden, M, ‘The HILDA Survey and the Potential to Contribute to Population Research’, presented at ‘The Australian Population Association 11th Biennial Conference’, University of New South Wales, Sydney, 2–4 October 2002. Webster, E, ‘Conflict Inflation: Estimating the Contributions to Wage Inflation in Australia during the 1990s’, presented at ‘First Heterodox Conference of Economists’, University of New South Wales, Sydney, 9–10 December 2002. Wooden, M, ‘Changing Hours of Work: What’s Happening?’, presented at ‘The ACIRRT Conference: Working Time Today – Threats and Opportunities for Business, Family and Community’, University of Sydney, 22 August 2002. Wooden, M, ‘Industrial Relations Reform and the Consequences for Working Time, Job Security, Productivity and Jobs’, presented at ‘Towards Opportunity and Prosperity Conference’, Melbourne Institute of Applied Economic and Social Research, Melbourne, 4–5 April 2002. Yong, J, ‘Impacts of Code-Share Alliances on Airline Cost Structure: a Truncated Third Order Translog Estimation’, presented at ‘Department of Economics Seminar Series’, Monash University, Clayton, 4 September 2002. 46

Theses Jensen, BJ, ‘Geographic Inequality: Neighbourhood Externalities and Education Expectations’. Loundes, JE, ‘An Analysis of Australian Firms’ Performance’.

Media Coverage 958 references to the Melbourne Institute were identified in the print media and radio/television in 2002. Melbourne Institute staff were reported or products were cited in The Australian, The Australian Financial Review, The Age, The Sunday Age, The Sydney Morning Herald, The Daily Telegraph, The West Australian and various radio and television stations. Notable inclusions in the Melbourne Institute’s media coverage in 2002 were: ‘Poverty Lines Tangled’, The Age, 17 January 2002. ‘Many Approaches to a Bright, Inclusive Future’, The Australian, 25 February 2002. ‘Survey Support for Mothers at Home’, The Age, 25 March 2002. ‘Hoping to Put the Smile into Statistics’, The Australian, 4 April 2002. ‘Grey Expectations’, The Weekend Australian, 6 April 2002. ‘Hard Heads, Soft Hearts’, The Weekend Australian, 6 April 2002. ‘Poor Sop for the Worst Off’, The Australian, 14 May 2002. ‘Passion for Property Still Rising’, The Australian Financial Review, 8 July 2002. ‘Consumers Hold on to Their Cash amid Economic Gloom’, Sydney Morning Herald, 15 August 2002. ‘Lack of Cheap Fares Hits Budget Tourism’, Sydney Morning Herald, 25 September 2002. ‘As We Really Are’, Sydney Morning Herald, 19 October 2002.

FINANCE AND PERFORMANCE INDICATORS Table 4: Income and Expenditure of the Melbourne Institute, 1998 to 2002 1998

1999

2000

2001

2002

Income Non-University Funds made up of $1,742,783 Subscription Services $326,978 Consultancies $728,057 Grants $687,748 Faculty of Economics Base Grant $150,000 Other University Funds $218,390 Total Income $2,111,173

$2,032,641 $376,613 $1,068,191 $587,837

$2,299,358 $312,420 $1,282,342 $704,596

$4,901,284 $296,976 $4,138,629 $465,679

$4,773,959 $276,942 $4,297,798 $199,219

$150,000 $125,125 $2,307,766

$150,000 $188,426 $2,637,784

$150,000 $535,679 $5,586,963

$150,000 $852,929 $5,776,888

Expenditure Salaries Other Expenditure Total Expenditure

$1,423,132 $676,060 $2,099,192

$1,482,567 $824,817 $2,307,384

$1,721,936 $885,090 $2,607,026

$2,042,948 $3,520,924 $5,563,872

$2,562,695 $3,102,524 $5,665,219

$11,981

$383

$30,758

$23,092

$111,670

Surplus

Notes: This budget is on an accrual basis. Research income is allocated in the year in which the work is done.

Table 5: Performance Indicators, 1998 to 2002(a) Research Performance Research Income National Competitive Research Grants Other Public Research Grants Industry and Other Research Funds Total External Research Income Publications

1998

1999

2000

2001

$346,577 48% $341,171 71% $550,857 9% $1,238,605 32%

$380,952 10% $361,938 6% $630,050 14% $1,372,940 11% 17

$465,679 8% $3,327,032 432% $815,597 5% $4,608,308 132% 18 38% 22 0% 132 15% 4.5 11% 0.5

$170,219 –63% $2,911,180 –12% $1,653,559 103% $4,734,958 3% 27 50% 31 41% 112 –15% 4.5 0% 0

115 62% 5 11% 1

156 36% 3 40% 1

$506,508 33% $625,200 73% $855,230 36% $1,986,938 45% 13 –24% 22 –37% 115 26% 4 33% 0

258 47% $504,178 12% 213 10%

505 96% $528,472 5% 303 42%

550 9% $500,620 –5% 188 –38%

561 2% $517,976 3% 591 na

540 –4% $478,965 –8% 956 62%

$2,111,173 20%

$2,307,766 9%

$2,637,784 14%

$5,586,963 112%

$5,776,888 3%

14.07 20%

15.39 9%

17.59 14%

37.25 112%

38.51 3%

Journal Articles (accepted by DEST) Total Publications (accepted by DEST) Total Publications

Higher Degree Students

Research Higher Degree Students (Full-time equivalent) Higher Degree Completions

Business, Government and Public Policy Debates Subscriptions to Melbourne Institute Products (Excluding Australian Economic Review) Value of Subscriptions and Sponsorships References to the Melbourne Institute in the Media(b) Financial Performance Total Income

Multiplier Effect for the University (Ratio of total income to the Faculty’s base-line funding)

2002

Notes: (a) Figures in italics represent the percentage increase/decrease each year. These figures are provisional. (b) 1998 to 2000 figures are based on a different counting method.