2004 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 2004 and outlook 2005

www.melbourneinstitute.com ÂŠ 2005 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 others. Printed and bound by Impact Printing.

Contents

Director’s Report

Highlights 2004

Outlook for 2005

Labour Economics and Social Policy

Applied Macroeconomics

Applied Microeconomics

The HILDA Survey

Contributions to Policy Analysis and Debate

Melbourne Institute Forums

Making Schools Better Conference

Staff Publications, 2004

Staff Seminars and Presentations

Our Staff, 2004

Advisory Board

Publications by Subscription

Finance and Performance Indicators

Page 1 – Annual Report 2004 and Outlook 2005

Director’s Report

2004 was another exciting year for the Melbourne Institute and a time of continued solid growth.

Professor Peter Dawkins Ronald Henderson Professor and Director

2004 was another exciting year for the Melbourne Institute and a time of continued solid growth. This included the appointment of Professor Guay Lim as head of our Applied Macroeconomics area and Professor Tony Scott to lead our health economics research. We also made an offer to Kostas Mavromaras to be Professor in the area of Labour Economics and Social Policy. We look forward to him joining the Melbourne Institute in September 2005. As it turned out, this was to be my last full year as Director, before moving on in April 2005 to be Deputy Secretary in the Victorian Department of Treasury and Finance. It was very pleasing that we were able to appoint a number of professors to join Mark Wooden and the new Director, John Freebairn, in leading the Melbourne Institute’s research agenda. In this annual report you will read about many research projects, and growing numbers of publications, in 2004, in the areas of: Labour Economics and Social Policy; Applied Macroeconomics; and Applied Microeconomics including • industrial economics, innovation and productivity, • economics of health, • economics of education. We also continued to play a signiﬁcant role in contributing to public policy debates in Australia. For example, we produced a book based on the 2003 Pursuing Opportunity and Prosperity Conference, jointly with The Australian, called Reforming Australia: New Policies for a New Generation. We also ran, in association with The Australian and the Faculty of Education at the University of Melbourne, a conference entitled ‘Making Schools Better’, at which leading academics joined with the Federal Minister for Education, the Victorian Minister for Education and the Federal Shadow Minister to discuss and debate the important issues in this area. As I move on to new challenges, let me say how much I have enjoyed being the Director of the Melbourne Institute since 1996. My thanks to all the staff, the Advisory Board, our clients and sponsors for their support in that time. My very best wishes to John Freebairn and all at the Melbourne Institute for the future. I am delighted that John is my successor. He is an outstanding economist who makes very important contributions to the public debate. I have no doubt that John will be very committed to the dual goals of academic excellence and practical contributions to contemporary issues. I would also like to thank the administration team for their endless hard work and good cheer in supporting all aspects of the Melbourne Institute.

Page 2 – Annual Report 2004 and Outlook 2005

Highlights 2004

2004 was another year of solid growth. The number of full-time equivalent staff members at the end of 2004 was 35.4, which compares with 29.8 a year earlier, while total revenue rose from $8.1m in 2003 to $9.6m in 2004.

The Australian Government committed an additional $30m to enable a further four waves of the HILDA Survey to be conducted, and entered into a new contract with the Melbourne Institute to manage the survey until June 2010.

A report on the international standing of Australian universities, by Ross Williams and Nina Van Dyke, was released in November, and received considerable media attention.

Two books, ﬁve book chapters and 26 refereed journal articles were published by Melbourne Institute staff in 2004. By comparison, there was a total of 23 publications in 2003.

The Applied Microeconomics research group was successful in its bid for an ARC Linkage grant on measuring hospital performance.

Use of the MITTS model featured prominently in the evaluation of a number of policy initiatives and proposals, including the ALP Family Tax Package and the 2004 Federal Budget.

The Melbourne Institute’s tender for a ﬁve-year extension to its Social Policy Research Services contract with the Australian Government was successful.

The book Reforming Australia: New Policies for a New Generation, based on the 2003 Pursuing Opportunity and Prosperity Conference, was released.

The Melbourne Institute’s economic indicators, especially the Survey of Consumer Sentiment, once again featured prominently in the media.

The Melbourne Institute was involved in two Centres of Excellence bids, one on population ageing and the other on time use. Both have been short-listed.

A major conference entitled ‘Making Schools Better’ was held in August and was attended by around 200 people, mainly from the education and government sectors.

New Professors—Guay Lim (applied macroeconomics) and Tony Scott (health economics)—commenced employment.

Page 3 – Annual Report 2004 and Outlook 2005

Outlook for 2005

A Change in Leadership After ten very successful years, Professor Peter Dawkins decided, in late 2004, to accept a senior posting with the Victorian Government. The Faculty of Economics and Commerce appointed Professor John Freebairn to the position of Director commencing April 2005. Professor Freebairn is well qualiﬁed to take over as Director. A former Head of the Department of Economics at the University of Melbourne, he is one of Australia’s most respected economists. The range of issues on which he is an authority make him very well suited to lead a research organisation with the breadth of coverage that the Melbourne Institute now has. Also joining the senior management team in 2005 will be Professor Kostas Mavromaras. He will take over leadership of the Labour Economics and Social Policy program allowing Professor Mark Wooden to concentrate on his responsibilities as Deputy Director of the Melbourne Institute and Director of the HILDA

Survey project. Professor Mavromaras joins us from the University of Aberdeen and has an impressive background in both labour market research and public policy advice.

A New Strategic Plan A new five-year strategic plan is being developed and will be put in place during 2005. Likely key features of the new plan include: • a focus on enhancing the Melbourne Institute’s international reputation in a number of key areas; • a greater emphasis on raising the international profile of the Melbourne Institute and its staff; • demanding revenue and output growth targets over the next five years; • increasing the ratio of professorial staff to research staff; • introducing population ageing as an explicit new area of focus; and • increasing the importance of research training in the Melbourne Institute’s mission.

Research Grant Application Activity The number of grant applications submitted by Melbourne Institute staff to either the Australian Research Council (ARC) or the National Health and Medical Research Council (NH&MRC) during 2005 is expected to be higher than any other year in the Melbourne Institute’s history. Applications that have been, or will be, submitted are listed in Table 1.

Social Policy Research Since 2001 the Melbourne Institute has been engaged in a major program of social policy research for the Department of Family and Community Services (FaCS). FaCS awarded the Melbourne Institute a ﬁve-year extension on our initial fouryear contract. The new contact is due to commence in 2005. Responsibility for the management of this program within the government has moved to the Australian Department of Employment and Workplace Relations.

Table 1: Research Grant Application Activities 2005 Title

Chief Investigators

Grant Type

$ Sought

Labour market transitions and dynamics in Australia: An analysis of the HILDA Survey

Wooden, Borland, Mavromaras

ARC Discovery

$1530k over 5 years

Innovation and uncertainty

Webster, Jensen, Palangkaraya, Yong

ARC Linkage

$680k over 3 years*

Does private health insurance improve health in Australia? Application of matching methodology using HILDA data

Freebairn, Yong

ARC Discovery

$450k over 3 years

Assessing the effects of government health care expenditures on cardiovascular disease in Australia

Scott, Webster

NH&MRC project

$418k over 3 years

The evaluation of microeconomic and social policy in Australia using quasi-experimental methods

Tseng, Wilkins

ARC Discovery

$240k over 3 years

Dynamic stochastic general equilibrium macro models: Estimation and applications

Lim

ARC Discovery

$210k over 3 years

Evaluation of the Youth Homeless Jobseeker Trial

Borland, Wilkins, Tseng

ARC Linkage

$180k over 3 years*

* Includes ﬁnancial contribution by partner organisations.

Page 4 – Annual Report 2004 and Outlook 2005

Health Economics Research

Academic Department Audit

In recent years we have been gradually building up our research capacity in the area of health economics. Our application for an ARC Linkage grant on measuring hospital performance was successful, work on which commenced in 2005. Importantly, the recently appointed head of this area, Professor Tony Scott, commenced full-time employment in April 2005, and will be working to attract funds to support new research activity.

In 2005 the Melbourne Institute will be the subject of a quality audit by the University of Melbourne. The purposes of the audit are threefold: (i) to assist the department to monitor its current performance and contribution to the strategic plan of the University; (ii) to identify opportunities that would strengthen performance; and (iii) to take stock of current processes and practices and their efﬁcacy in supporting high quality outcomes.

Applied Macroeconomics Research

The Economics of Ageing

During 2005, the Applied Macroeconomics research program will continue to consolidate and expand on its long-standing areas of research strength in surveybased macroeconomics and in the forecasting and indicator analysis of the macroeconomy. More specifically, the forecasting model will be improved to increase its flexibility as a scenario tool; and the indexes will be revised to enhance their performance as indicators of activity. Research will also continue into the behaviour of labour flows, business cycles and the relationship between macroeconomic policy options and economic welfare in Australia.

It is widely recognised that demographic transition, and especially population ageing, is of major policy signiﬁcance. The Melbourne Institute is clearly well equipped to undertake research in this area, especially given the following: (i) our central role in the management of the HILDA Survey, which is inherently a study of the ageing process; (ii) the ability of the MITTS model to simulate the labour supply responses of different demographic groups; and (iii) the model-building expertise of the Applied Macroeconomics group. The Melbourne Institute is, however, giving greater and more speciﬁc attention to ageing research in its 2005 operational plan. Developments being pursued include partnership in a Centre of Excellence bid, being led by John Piggott at the University of New South Wales (which has made it to the short-listing stage), and development of an intergenerational dynamic general equilibrium model by the Applied Macroeconomics group.

above: Jackie Huggins AM, Deputy Director, Aboriginal & Torres Strait Islander Studies Unit, University of Queensland, conference speaker

The Melbourne Institute Economic and Social Outlook Conference (organised jointly with The Australian newspaper) In April 2005 the Melbourne Institute and The Australian newspaper conducted its third economic and social outlook conference under the theme ‘Sustaining Prosperity’. The conference was attended by around 400 people, including leaders from politics, the public service, business, unions, community groups and academia. A highlight of the conference was the speech by the Treasurer, Mr Peter Costello, at the Conference Gala Dinner.

The HILDA Survey Research Conference As the home of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, the Melbourne Institute will once again be hosting the HILDA Survey Research Conference. The second such conference is to be held at the University of Melbourne on 29 and 30 September 2005, and will bring together users of the HILDA Survey.

Page 5 – Annual Report 2004 and Outlook 2005

Labour Economics and Social Policy

Overview 2004 saw the Labour Economics and Social Policy research program build on its successes of 2003. The overall level of activity was extremely high as reﬂected in rising rates of academic publication and increased hiring. The HILDA Survey was again the major source of external income. However, given its size, the HILDA Survey project team was moved out of the Labour Economics and Social Policy program (at the start of 2005) and hence their activities are included elsewhere in this report. In terms of contract research, the highlight of the year was the renewal of our Social Policy Research Services contract with the Australian Government, which from 2005 will be overseen for the Australian Government by the Department of Employment and Workplace Relations. Two applications submitted (in collaboration with staff in the Department of Economics) for seeding grants from the Faculty were successful. The other major project in progress during 2004 was the ARC-funded research program—The Dynamics of Economic and Social Change. Major research projects are detailed below. Smaller projects and consultancies undertaken include: • Consultancy undertaken by Hielke Buddelmeyer, Peter Dawkins and Guyonne Kalb for The Australian newspaper about bracket creep, effective marginal tax rates and alternative tax packages. • Consultancy undertaken by the MITTS team for the Australian Labor Party evaluating its proposed tax and family beneﬁts package.

• University of Melbourne Early Career Researcher grant awarded to Yi-Ping Tseng and Roger Wilkins on the decline in male employment in Australia. • Faculty Research grant awarded to Roger Wilkins on income poverty. • Ongoing contract with the Bertelsmann Foundation to supply the Australian component of the International Reform Monitor. • Consultancy undertaken by Mark Wooden for Employers’ First as part of its submission to the Secure Employment Test Case before the NSW Industrial Relations Commission. • Consultancy undertaken by Guyonne Kalb for the New Zealand Treasury evaluating labour supply responses to proposed social policy reforms. Publication activity of research staff is also clearly on the rise with one book, five book chapters and 22 journal articles being published by the staff of the program during 2004. This compares with a total of 21 publications in 2003. The program again recorded a healthy financial surplus, putting it in a great position to invest in new capacitybuilding initiatives in the years ahead. Finally, and reflecting the continued high level of activity, new offers of employment were made to three Research Fellows and one Research Officer. In addition, we appointed Dr Kostas Mavromaras, currently at the University of Aberdeen to a Professorial level.

Page 6 – Annual Report 2004 and Outlook 2005

Social Policy Research Services Contract Since 2001, the Melbourne Institute has been engaged in a major program of social policy research for the Department of Family and Community Services. By the end of 2004 this program had generated 18 papers, published or forthcoming, in peer-reviewed academic journals and other publication outlets, with a further 13 papers under review. A total of 13 projects were successfully completed during 2004. These projects were on the following topics: • Jobless households • Underemployment in Australia • Effects of divorce on children’s education, and whether they are accounted for by moving house • Effects of education, fertility and divorce on married women’s employment: patterns past, present and future • Extending output produced by MITTS • Validation of MITTS-A • Effect of changes to activity test arrangements on exit from payments: Work for the Dole • Cohort and distributional analysis of the wealth of Australians • Dynamic properties of income support receipt • Use of HILDA in MITTS • Reweighting of the Survey of Income and Housing Costs for use in MITTS • Who uses childcare, for what purpose, and what is their experience of balancing work and family life? • Incentives of the current system for single and married mothers.

In addition, there were a further six projects which were still underway at the end of the year. These projects were on the following topics: • Comparisons of alternative speciﬁcations for labour supply models • Working time preferences in couple households • Understanding successful exits from the Disability Support Pension • Financial stress, wealth, poverty and indebtedness • The causes of long-term unemployment • Living arrangements of young children.

ARC Project: The Dynamics of Economic and Social Change This project, better described as a program of research, commenced in 2003 and is due to cease at the end of 2005. It is built around the analysis of the HILDA Survey data with the purpose of examining research questions within the following three broad areas: • income, poverty and well-being; • labour supply and work incentives; and • the changing nature of work. As should be evident from the list of outputs provided in Table 2, activity within this program has been high. Within the income, poverty and well-being sub-program, our research has focused on three issues: (i) How important are economic considerations in inﬂuencing measures of psychological wellbeing or happiness? (ii) How is

wealth distributed across Australian households? (iii) How should relative deprivation be measured and how pervasive is it in Australia? Research on this third item has been combined with a broader initiative on poverty and ﬁnancial hardship which has received additional support from the Victorian Department of Treasury and Finance and from the Brotherhood of St Laurence. Further, this project, which is being led by Associate Professor Bruce Headey, is now overseen by a steering committee comprising representatives from both of these organisations as well as the Australian Department of the Treasury, the Australian Department of Family and Community Services, the Australian Bureau of Statistics, the Victorian Department of Human Services, and the Australian Council of Social Services. With respect to labour supply and work incentives, our research has also focused on three topics. First, we have been examining the question of how health status impacts on labour force participation decisions and also on how labour force status impacts on health. Second, we have estimated the impact of childcare costs on the labour supply decisions of mothers. Finally, we have been examining the experiences of the unemployed, with a particular focus on the degree of mobility out of unemployment and the factors that inﬂuence such transitions.

Activity in the third sub-program focusing on the changing nature of work has, during 2004, been dominated by collaborative activities with Professor Robert Drago, from the University of Pennsylvania. He visited the Melbourne Institute for two months to collaborate on two papers: one examining the extent of mobility between full-time and parttime jobs and the barriers to such mobility, and the other on the relative importance of male breadwinner, female breadwinner and two-income households. Additionally, other research has commenced with the objectives of (i) estimating the impact of working time on various measures of well-being; and (ii) developing a typology to describe homeworking arrangements.

Page 7 – Annual Report 2004 and Outlook 2005

Labour Economics and Social Policy

(contâ&#x20AC;&#x2122;d)

Table 2: The Dynamics of Economic and Social Change Research Program Research Outputs 2004 Sub-program/Topic

Researchers

Outputs

Income, Poverty and Well-being The distribution of wealth

Headey, Marks, Wooden

Melbourne Institute Working Paper 12/04. Article published in The Journal of Sociology. Article forthcoming in The Australian Economic Review.

The effects of wealth and income on subjective well-being

Headey, Wooden

Article published in The Economic Record. Melbourne Institute Working Paper 15/04. Paper presented at the German Socio-Economic Panel Users Conference. Article forthcoming in Schmollers Jahrbuch. Paper submitted to Review of Income and Wealth.

Work Incentives and Labour Supply Health status and labour force participation

Cai, Kalb

Melbourne Institute Working Paper 4/04. Paper presented at the Australian Labour Market Research Workshop, the Australasian Meeting of the Econometric Society, and the Australian Health Economists Conference. Paper submitted to Health Economics.

Childcare costs and female labour supply

Buddelmeyer

Paper presented at the 18th Annual Conference of the European Society of Population Economics.

Non-standard employment and job satisfaction

Warren, Wooden

Article published in The Journal of Industrial Relations.

Family structure and working hours preferences

Drago, Tseng, Wooden

Melbourne Institute Working Paper 1/04.

Work hours transitions

Black, Drago, Wooden

Melbourne Institute Working Paper 11/04.

Female breadwinner families

Black, Drago, Wooden

Changing Nature of Work

Paper submitted to Work and Occupations. Melbourne Institute Working Paper 19/04. Article forthcoming in Journal of Sociology.

Page 8 â&#x20AC;&#x201C; Annual Report 2004 and Outlook 2005

New Zealand Behavioural Microsimulation Model In 2003 the New Zealand Treasury commissioned the Melbourne Institute to build a behavioural microsimulation model (similar to the Melbourne Institute Tax and Transfer Simulator, MITTS) that can be run using output from the Treasury’s static microsimulation model TaxMod. A behavioural microsimulation model allows the user to estimate the work-incentive effects of financial changes in social security and taxation, and to incorporate these changes in the prediction of the effect of such policy changes on government revenue and expenditure. During 2004, the model-building stage was finalised and an illustrative recent policy change simulated. During a visit to New Zealand in April 2005, a paper based on this simulation was presented and the use of the model was demonstrated. This finalised the project.

Faculty Seeding Grant: Behavioural Modelling of the Australian Tax and Transfer System Staff from both the Labour Economics and Social Policy and Applied Macroeconomics programs, together with Professor John Creedy from the Department of Economics, were successful in obtaining a Faculty Seeding Grant for two years to pursue a research program that aims at extending and combining existing strengths in the analysis of tax and transfer policies to enable research on additional topical issues. Substantial modelling developments, largely involving MITTS, were carried out during 2004. Several papers, related to the research program, have been written and submitted to journals. In addition to these research outputs, activities were undertaken to promote this type of tax modelling and its use in policy analyses. For example, a paper was presented at the conference on Quantitative Tools for Microeconomic Policy Analysis organised by the Productivity Commission. The ﬁrst year was also used to set up a range of activities for 2005, such as a workshop, a session in the Economic Society Conference and a visit to Europe to talk to other researchers in this ﬁeld.

Faculty Seeding Grant: Program and Policy Evaluation and Design With the ﬁnancial support of a Faculty Seeding Grant, a collaborative research group focused on government program and policy evaluation and design was formed at the beginning of 2004, comprising researchers in the Melbourne Institute and the Department of Economics. The group aims to extend the existing program evaluation research expertise of group members and to promote the development of the University of Melbourne as the leading research centre on program and policy evaluation and design in Australia. Activities of the group undertaken in 2004 included research on a number of projects evaluating government programs, conference and seminar presentations, and support of postgraduate study in program evaluation. A number of steps have been taken towards securing future externally funded research, including undertaking activities aimed at promoting the work of the research group to potential clients. Although still in its formative stages, the research group has already begun achieving external recognition as a centre of program evaluation expertise. For example, in November 2004, members of the group were invited by the Productivity Commission to speak at a conference for senior government bureaucrats on new quantitative techniques for microeconomic policy analysis.

above: (from left) Wang-Sheng Lee, Yi-Ping Tseng, Rasika Ranasinghe

Page 9 – Annual Report 2004 and Outlook 2005

Applied Macroeconomics

Overview 2004 was a successful year for the Applied Macroeconomics team. The outputs of the team remain high, with new projects commencing alongside the production of the long-standing reports based on the Survey of Households. • The Applied Macroeconomics team have updated the Melbourne Institute forecasting model and extended its capability to incorporate the analysis of scenarios. • Three major reports were produced: ‘The Impact of Population Ageing on Labour Force Participation Rates’ (Peter Dawkins, Guay Lim and Pete Summers); ‘Global Economic Challenges to ASEAN Integration and Competitiveness: A Prospective Look’ (Peter Lloyd and Penny Smith); and ‘Forecasting Patent Applications and Renewals’ (Michael Chua and Pete Summers). • Journal publications have increased and include articles in the Journal of International Money and Finance, Economic Record and the Australian Journal of Labour Economics. The head of the Applied Macroeconomics program is Professor Guay Lim who commenced as a Professorial Research Fellow at the start of 2004.

Worker Flows and Labour Market Policy in Australia Sponsored by the Australian Research Council (ARC), this project is run by Robert Dixon, John Freebairn and Guay Lim, who are the Chief Investigators. This project aims to undertake a detailed analysis of flows in the Australian labour market. Monthly data on flows of males and females between four labour market states (employed full-time, employed part-time, unemployed and not in the labour force) over the period 1980 to 2003 will be analysed. The project will extend the theory of flows and it will use up-to-date time series econometric analysis coupled with theories of labour market behaviour to build models of the flows. The aim is to better understand trend, cyclical, seasonal and policy influences on labour market flows and to reveal any structural changes which have occurred. This will provide more detail on the underlying causes of unemployment in Australia and especially the manner and the speed of response of males and females to changes in labour market policy and in economic conditions. To date papers flowing from this project include ‘The Incidence of Long-Term Unemployment in Australia 1978–2003’; ‘An Examination of Net Flows in the Australian Labour Market’; and ‘An Employment Equation for Australia: 1966–2001’.

Page 10 – Annual Report 2004 and Outlook 2005

Understanding Inflation in Australia Robert Dixon and Guay Lim in their paper entitled ‘Underlying Inflation in Australia: Are Current Measures Satisfactory?’ formulated criteria which an acceptable underlying rate of inflation must satisfy and then tested to see whether any of the current measures satisfied the criteria. They found that for the period since inflation targeting began, none of the existing underlying series satifies all the criteria. They then examined the results of an ‘unobserved components’ decomposition and showed that it not only provided useful information on underlying inflation in Australia but that it also provided support for the Reserve Bank of Australia’s decision in 1998 to switch the target from an underlying series to the headline rate itself. Lei Lei Song in his paper entitled ‘Do Underlying Measures Outperform Headline Rates? Evidence from Australian Data’ compared the predictive and directional accuracy of the underlying measures of inflation and the headline rate in assessing inflation trends. His results show that the only measure which has smaller predictive errors than the headline rate is the series defined as market prices excluding volatile items. However, with respect to directional accuracy, the results show that the headline rate has a slightly higher probability of correctly predicting the direction of change in actual inflation.

Project Reports ‘The Impact of Population Ageing on Labour Force Participation’ (Report for the Victorian Department of Treasury and Finance) by Peter Dawkins, Guay Lim and Pete Summers This report assesses the implications of population ageing for labour force participation in Victoria. Particular emphasis is paid to identifying policy initiatives to address, remove or ameliorate impediments to increase labour force participation. Overall, the analysis shows that it was important to tackle the ﬁve policy factors of education, retirement, childcare, health and welfare to encourage participation in the labour force. The report provides simulation studies to determine the required policy stimulus to bring participation rates in 2042 to levels similar to those in 2003, despite the ageing population. ‘Global Economic Challenges to ASEAN Integration and Competitiveness: A Prospective Outlook’ (AusAID-sponsored report for the ASEAN Secretariat) by Peter Lloyd and Penny Smith This report takes a forward-looking view of ASEAN in the context of a rapidly changing world economy and focuses on issues of economic integration. The report explores what a commitment to the goal of a single market or complete economic integration implies. It requires the elimination of both border and beyond-the-border measures that discriminate against foreign goods or persons and, sometimes too, the harmonisation across borders of standards, laws and regulations that inhibit trade. It also considers additional issues that

have emerged in regional trading agreements concerning border-related transactions costs, ﬁscal union and monetary union. Forecasts are made regarding growth rates in the ASEAN economies, changes in the global trade environment and emerging risks and policy implications for the ASEAN Economic Community through the goal of a single market. Recommendations are made for the Vientiane Action Programme. ‘Forecasting Patent Applications and Renewals’ (Report for IP Australia) by Michael Chua and Pete Summers This report presents improved methods for forecasting initial applications and patent renewals. In addition the report contains new methods to forecast initial patent applications disaggregated by country of origin and type of technology. It applies the vector-error correction modelling approach to forecasting multivariate series. In addition, the project also modelled the probability of patent renewal which together with the forecasts of the aggregated patent application yielded forecasts of renewal revenue.

IdeaWorks Retail Probe This report provides business and industry with a simple yet comprehensive and regular view of the status of the Australian retail sector. It contains the Retail Purchase Intentions Barometer which is designed to measure households’ spending intentions over the ensuing 12 months in three broad categories of retail spending: clothing and footwear, furniture and appliances, and leisure and entertainment.

Other Outputs The Applied Macroeconomics team is also responsible for the following publications: • Westpac – Melbourne Institute Indexes of Economic Activity • Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends • TD Securities – Melbourne Institute Experimental Monthly Inﬂation Gauge • Westpac – Melbourne Institute Survey of Consumer Sentiment • Melbourne Institute Wages Report • ING – Melbourne Institute Household Saving Report • Melbourne Institute Survey of Consumer Inﬂationary Expectations.

above: (from left) Michael Chua, Lei Lei Song, Guay Lim, Penny Smith, Anne Leahy

Page 11 – Annual Report 2004 and Outlook 2005

Applied Microeconomics

Overview Major areas of research in 2004 included the economics of innovation and intellectual property, private health insurance in Australia, and teacher labour markets. Major projects on innovation and industrial economics included: • Completion of a study by Paul Jensen and Beth Webster on disadvantages faced by small and medium sized enterprises that require protection from the intellectual property system. • The production of two scoreboards by Alfons Palangkaraya: first, the R&D and Intellectual Property Scoreboard and, second, the Patent Applications Scoreboard. • A paper by Paul Jensen and Beth Webster on biases in measuring innovation. • An investigation of the determinants of research and development, and intellectual property usage among Australian companies by Bill Griffiths and Beth Webster. • A study by Bee Yan Aw and Alfons Palangkaraya on knowledge spillovers in Indonesia. • Two research papers on the nature of efficient contracts for outsourcing were completed by Paul Jensen and Robin Stonecash. • A study by Paul Jensen and Beth Webster on the optimal settings for patent systems. • A study by Bill Griffiths and Beth Webster on trends in the value of patents, trade marks and registered designs in Australia. • A review of corporate indicators of intangible capital by Laurie

Hunter, Anne Wyatt and Beth Webster. • An investigative look at patterns of trademarking activity in Australia by Paul Jensen and Beth Webster. Two major projects on education were completed including: • A major survey was undertaken by Ross Williams and Nina Van Dyke on determining the international standing of Australian universities. • A paper by Beth Webster, Mark Wooden and Gary Marks was completed on reforming the labour market for Australian teachers.

Health Economics In 2004, two projects were completed by Alfons Palangkaraya and Jongsay Yong on private health insurance (PHI). The Australian Government introduced three policy initiatives during 1997–2000, namely the tax levy on high-income earners who do not have insurance, a 30 per cent premium rebate for all insurance cover, and Lifetime Health Cover. While together these new policy initiatives were effective in raising the uptake of PHI, it is not obvious what the contribution from each policy initiative was.

The ﬁrst study attempts to isolate the effects of the different policies using the 1995 and 2001 National Health Survey data. The analysis indicates that the effects of Lifetime Health Cover fall between 42 per cent and 75 per cent of the overall increase in PHI membership. The second study estimates the differential effects using a regression discontinuity design approach. The results suggest that the importance of Lifetime Health Cover appears to be grossly overrated in previous studies. Peter Dawkins, Beth Webster, Alfons Palangkaraya and Jongsay Yong completed a study on the distributive consequences of the PHI policy reform. The paper argues that even if the objective of increasing insurance coverage could be attained, the adverse income distributive effects are severe—the reform disproportionately favoured high-income earners. Jongsay Yong together with colleagues in Singapore, Euston Quah, Sutaip Saw and K.C. Tan, completed a study on the effects of cigarette consumption on productivity. This paper will appear in a forthcoming issue of the Journal of Developing Areas.

above: (from left) Alfons Palangkaraya, John Zammit (Special Business Consultant), Beth Webster, Paul Jensen, Jongsay Yong

Page 12 – Annual Report 2004 and Outlook 2005

Industrial Economics Five studies relating to innovation policy were undertaken during 2004. Paul Jensen and Beth Webster wrote a theoretical paper on the optimal setting for the three main policy instruments that governments use to affect the power of patent rights to prevent imitation: the size of the inventive step used to make the patent granting decision, the rigour of the patent examination process, and the predisposition of the courts to affirm the patent office’s decision. Their framework analysed the effects of changing these policy instruments on ex ante investment in invention in the light of concerns about anticompetitive secondary effects. Paul Jensen and Kim Weatherall (Faculty of Law) undertook an empirical investigation into patent enforcement in the Australian courts. In recent years, concern has been expressed that courts are providing inadequate protection for patent owners: that they are ‘anti-patent’. However, when they investigated the data on patent litigation, they found that patent owners are more likely to have at least some of their claims upheld in both validity and infringement determinations than they are to lose all of their claims. In a subsequent study, Bill Griffiths and Beth Webster estimated the innovation pathways of new creations from R&D activity through to intellectual property applications using enterprise panel data from 1989 to 2002. They found that R&D activity is a highly path-dependent process that relies heavily on firm-specific effects. These firm-specific effects were subsequently found to be correlated with managerial style—more aggressive and intuitive managers have higher R&D ceteris paribus—and

extensive use of incentive schemes for employees within the firm. Bill Griffiths and Beth Webster estimated trends in the value of intellectual property in Australia. They found that the average present value of patents has been falling over the last 14 years, but the value of trade marks has been rising. The trend for designs was less clear. This final paper on innovation by Anne Wyatt (University of Adelaide), Beth Webster and Laurie Hunter (University of Glasgow) was the first in a series of three papers on the measurement of intangible capital. This paper overviews international practices that measure firm-level investments into intangible capital. Paul Jensen and Robin Stonecash from the Australian Graduate School of Management completed two papers on the efficiency of contract design used for outsourced intermediate goods. The second paper reviewed the literature on the efficiency of public sector outsourcing contracts. Despite the prevalence of outsourcing traditionally publicly provided services, there still is no consensus in the academic literature on the magnitude (and determinants) of expected cost savings to the government, nor the sources of those savings. The paper considers the arguments for (and against) outsourcing and then examines the empirical evidence pertaining to whether any observed savings occur and whether they persist over time. The R&D and Intellectual Property Scoreboard 2004 was launched on 15 August by the Hon. Ian McFarlane. This report, which was prepared by Alfons Palangkaraya, presents a league table of companies having the highest density of R&D expenditure

and patent, trade mark and design applications. The ﬁrst Australian Patent Applications Scoreboard, also prepared by Alfons Palangkaraya, was launched in September. He was assisted by Saba Elkman, Andrew Christie and Sophie Waller.

Education Economics Two studies on tertiary and secondary education were undertaken in 2004. Ross Williams and Nina Van Dyke undertook a major survey of Australian and overseas universities to estimate the relative international standing of Australian universities. Their results showed that ANU and the University of Melbourne were most highly rated followed by the rest of the Go8 universities. About a half of foreign CEOs rated ANU and Melbourne as being equivalent to the top 80 universities in the world, and a clear majority placed Sydney, Queensland and New South Wales in the top 200, with about half also placing Monash in this category. After considering the evidence on teacher shortages in Australia, and overseas, Beth Webster, Mark Wooden and Gary Marks argued in their paper on the teaching labour markets that chronic shortages occur because fewer science and mathematics graduates, compared to humanities and social science students, are attracted to the tasks involved in teaching children. Attraction is a matter of degree however, and higher earnings should be used in order to attract more of the scarce mathematics and science graduates, who also have an aptitude towards teaching, to a teaching career. Higher earnings can also be used to reduce attrition of the most able teachers from all of the discipline areas.

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The HILDA Survey

2004 was, by all indicators, another good year for the Household, Income and Labour Dynamics in Australia (HILDA) Survey project. The year began with the release, in January, of the Wave 2 unit-record data files together with revised data files for Wave 1. This event thus marked the transformation of HILDA from just another crosssection survey to a survey of change. The Wave 2 release was also markedly improved on the Wave 1 release in a number of other important respects. Most obviously the Wave 1 files now include a set of income variables which provide imputed estimates for all missing values, as well as a series of derived after-tax income variables. The HILDA Survey has also generated an impressive level of interest from the research community, with 268 persons applying for, and being granted, access to the Wave 2 data release. Further, this interest has already given rise to a growing list of publications by researchers using the HILDA Survey data. The HILDA bibliography (available on our website), for example, lists 20 articles in refereed journals and eight other publications that appeared in 2004. Not long after the Wave 2 release, collection of Wave 3 data was completed. While response and attrition rates are not as good as we would like, they remain well within acceptable limits. The rate of respondent attrition in Wave 3 was 9.6 per cent, which represents a considerable improvement upon the 13.2 per cent rate recorded in Wave 2, and is in line with what other international household panel surveys have been reporting in recent years. The confidentialised public-use files containing the data from Wave 3 were released, on schedule, in January 2005.

Concurrent with the collection of Wave 3 data and their preparation for public release was the development and testing of instruments for Wave 4. The main modifications and innovations of note in Wave 4 were as follows: • inclusion of a mini-module on private health insurance coverage; • inclusion of a youth-specific minimodule, with questions restricted to persons aged under 30 years; • inclusion of additional questions about disability; • three new questions about religion added to the Self-Completion Questionnaire; • inclusion of a question seeking an assessment of overall household income, in broad bands, as part of the Household Questionnaire; and • inclusion of new questions identifying visa entry status of recent immigrant arrivals. ACNielsen commenced the collection of the Wave 4 data on schedule in August. The most significant development during 2004 was the announcement by the Australian Government, as part of the 2004 Budget, that an additional $30m was being set aside to enable a further four waves of the HILDA Survey to be conducted. This means the HILDA Survey now has funding up to and including Wave 8. Such a commitment is strong evidence of both the importance that the current Government gives to the need to

Page 14 – Annual Report 2004 and Outlook 2005

collect rigorous evidence to support policy, and the ongoing success of the HILDA Survey. This new funding will also permit the introduction of a number of enhancements to the study design. These include: • increasing the size of the dress rehearsal sample; • developing and testing methods for augmenting the sample with immigrant arrivals; • production of a new annual Statistical Report; • production of a dataset for training and teaching purposes; • use of Global Positioning System receivers during fieldwork; and • improved respondent incentives. The longer timelines, and increased budget, for the HILDA Survey have also enabled a modest expansion in the size of the HILDA project team within the Melbourne Institute. We thus welcomed Rosslyn Starick, who joined the team on a secondment basis from the Australian Bureau of Statistics. Rosslyn’s role is to provide statistical support to the project and she commenced work on enhancing the quality of the imputed information included in each data release. We also appointed a new dedicated Administrative Support Officer, Samantha Roberts, and a new Research Officer, Rianna Chapman, to assist with data checking and cleaning.

Contributions to Policy Analysis and Debate As part of its strategic objectives, the Melbourne Institute aims to contribute on a high level to economic policy analysis, discussion and development in Australia. Some examples are listed below for 2004. • The Director, Peter Dawkins, continued to provide policy advice at the highest level through his membership of the Prime Minister’s Science, Engineering and Innovation Council and of the Welfare Reform Consultative Council. • The Melbourne Institute continued to inform social policy through research activities undertaken as part of its Social Policy Research Services Agreement with the Department of Family and Community Services. • The Melbourne Institute continued to contribute to policy debate through its quarterly forums. Topics covered at these forums during 2004 included taxation reform; the Commonwealth Budget; the future policy reform

•

agenda; industrial relations reform; and the further privatisation of Telstra. Our ongoing economic indicators, and especially the Westpac – Melbourne Institute Consumer Sentiment Index, continued to be regularly monitored in the media and by the ﬁnancial sector and government. The book Reforming Australia: New Policies for a New Generation, based on the 2003 Pursuing Opportunity and Prosperity Conference, was released. In the ﬁrst quarter of 2004, the Melbourne Institute produced a report for The Australian newspaper on bracket creep, effective marginal tax rates and alternative tax packages, which featured prominently in The Australian’s ‘Too Much Tax’ series. Mark Wooden was invited to address the Inaugural Families Australia conference on work and family issues in April.

• Peter Dawkins and Mark Wooden were invited speakers at the annual retreat of the secretaries of the Commonwealth Government departments in July. • Making Schools Better, a major conference organised by the Melbourne Institute and held in August, was attended by people from education and government sectors. • In September the Melbourne Institute released a report on our analysis of the ALP’s tax and family beneﬁts package, which the ALP released prior to the federal election. • In September, Jongsay Yong presented major new ﬁndings on the effectiveness of Lifetime Health Cover in raising private health insurance coverage at the 26th Australian Conference of Health Economists in Melbourne.

below: Kwong Lee Dow, Brendan Nelson, Peter Dawkins

Page 15 – Annual Report 2004 and Outlook 2005

Melbourne Institute Forums Business Economics Forum in Melbourne The Melbourne Institute Business Economics Forum in Melbourne entered its eighth year in 2004 and generated considerable interest. The quarterly forums were well attended. Breakfasts were held on 8 April and 24 June at the Hotel Sofitel and 9 September at Le Meridian at Rialto in Melbourne. The final forum for 2004 was a luncheon on 2 December at the Hotel Sofitel. At each forum, the Melbourne Institute’s forecasts were presented and discussed, with special topics canvassed such as the following: tax; the budget; interest rates; the reform agenda for the future federal and state governments; and post-election issues such as the economic outlook, industrial relations reform and privatisation of Telstra. In addition to Melbourne Institute researchers Associate Professor Pete Summers, Professor Mark Wooden, Professor Peter Dawkins and Associate Professor Mark Crosby (Melbourne Business School), a number of external commentators were involved in the forums. These included Mr Alan Wood (The Australian), Professor John Freebairn (The University of Melbourne), Mr Alan Oster (National Australia Bank), Mr Ian Little (Victorian Department of Treasury and Finance), Professor Allan Fels AO (The Australia and New Zealand School of Government), Associate Professor Sisira Jayasuriya (The University of Melbourne) and Mr Mike Steketee (The Australian). The Chairmen were Mr Ian Little (Victorian Department of Treasury and Finance), Mr Tony Cole AO (Mercer Investment Consulting), Mr Phil Ruthven (IBISWorld) and Mr Bill Scales AO (Telstra).

Members Gold

Department of Treasury and Finance Mercer Investment Consulting The University of Melbourne Individual

Institute for Private Enterprise Victorian Auditor General’s Ofﬁce Associate

ANZ Banking Group City of Melbourne Department of Innovation, Industry and Regional Development Department of Premier and Cabinet IBISWorld Productivity Commission

Page 16 – Annual Report 2004 and Outlook 2005

from top: Alan Wood, Jeff Borland

Public Economics Forum in Canberra In 2004, the Melbourne Institute Public Economics Forum in Canberra continued into its sixth year and maintained strong interest levels. The quarterly forums were exceptionally well attended. Luncheons were held on 30 March and 7 September at Old Parliament House and 22 June and 30 November at the Hyatt Hotel in Canberra. At each luncheon the Melbourne Institute’s news was presented, and special topics were canvassed, such as a new reform agenda for Australia, focusing on Reforming Australia: New Policies for a New Generation, based on the November 2003 Economic and Social Outlook Conference, Pursuing Opportunity and Prosperity; industrial relations; privatisation of Telstra; and tax and interest rates. In addition to Melbourne Institute researchers Associate Professor Pete Summers, Professor Peter Dawkins, Associate Professor Mark Crosby and Professor Mark Wooden, guest speakers included Mr Chris Richardson (Access Economics), Professor Peter Saunders (Centre for Independent Studies), Mr Chris Murphy (Econtech), Mr Mike Steketee (The Australian), Mr Gary Banks (Productivity Commission), Professor Bob Gregory AO (The Australian National University), Professor Ann Harding (National Centre for Social and Economic Modelling) and Professor Allan Fels AO (The Australia and New Zealand School of Government). The Chairmen were Dr Ken Henry (Commonwealth Treasury) and Dr Michael Keating AC (The Australian National University).

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 Individual

Australian Bureau of Statistics CSIRO Department of Defence Department of Health and Ageing Department of Prime Minister and Cabinet Associate

Australian Bureau of Statistics Australian Public Service Commission Department of Disability, Housing and Community Department of the Treasury IdeaWorks Productivity Commission

from top: Mark Crosby, Chris Richardson

Page 17 – Annual Report 2004 and Outlook 2005

Making Schools Better Conference

On 26 and 27 August 2004, the Melbourne Institute and The Australian, in association with the Faculty of Education at the University of Melbourne, held a summit conference on the performance, management and funding of Australian schools. The quality of schooling is increasingly being seen as a key to promoting opportunity and prosperity for the young Australians of today and tomorrow. Politicians on both sides of the established divide are showing concern about whether our schools are properly equipped to prepare our next generation of adults for the economic and social challenges they will confront. This summit brought together leading politicians, teachers and experts along with prominent ﬁgures on the world stage. It presented important evidence on school performance and discussion of policy options for making our schools better.

The sessions covered by the conference were: • Some Simple Analytics of School Quality • School Principal’s Forum: What Makes a Good School? • School Performance in Australia • Teachers—The Labour Market, Teacher Remuneration and Teacher Remodelling • Public and Private Education: What Is the Proper Role of Government? • Some Speciﬁc Issues in Education: Education and the Community; Boys’ Education; Literacy and Preschool • School Reform Priorities. The speech at the conference dinner was given by the Australian Adviser on Schools Policy to the UK Government and Director, Centre for Strategic Educational Thinking, Mr Tony Mackay, who talked about ‘From School Improvement to School Transformation’.

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The sessions were well attended over the two days of the conference, with almost 200 delegates in attendance. The conference was covered extensively in The Australian and other media.

this page from top: Jenny Macklin, Brian Caldwell opposite page: Helen Paphitis, Stephen Norris, Gary Costello

Australian-Based Speakers and Chairs

Professor Margaret Abernethy (The University of Melbourne) Senator Lyn Allison (Australian Democrats) Ms Jennifer Buckingham (The Australian) Professor Brian Caldwell (Educational Transformations) Mr Garry Costello (Mount Gambier High School, South Australia) Professor Peter Cuttance (Centre for Applied Educational Research) Professor Peter Dawkins (The University of Melbourne) Dr Martyn Forrest (Tasmanian Department of Education) Dr Mark Harrison (Consultant, Canberra) Professor Jack Keating (The University of Melbourne) Ms Lynne Kosky MP

Professor Kwong Lee Dow (The University of Melbourne) Mr Ian Little (Victorian Department of Treasury and Finance) Mr Tony Mackay (Centre for Strategic Educational Thinking) Ms Jenny Macklin MP Professor Simon Marginson (Monash University) Dr Gary Marks (ACER) Dr Geoff Masters (ACER) The Hon. Dr Brendan Nelson MP Mr Stephen Norris (Launceston Church Grammar School, Tasmania) Ms Helen Paphitis (Salisbury High School, South Australia) Ms Susan Pascoe (Catholic Education OfďŹ ce) Ms Melodie Potts (Cape York Institute) Professor Field Rickards (The University of Melbourne)

Dr Ken Rowe (ACER) Professor Boris Schedvin (The University of Melbourne) Mr Michael Stutchbury (The Australian) Dr Dahle Suggett (Victorian Department of Education and Training) Dr Elizabeth Webster (The University of Melbourne) Professor Mark Wooden (The University of Melbourne) International Speakers

Dame Patricia Collarbone DBE (National Remodelling Team, England) Professor Eric Hanushek (Stanford University, California)

Page 19 â&#x20AC;&#x201C; Annual Report 2004 and Outlook 2005

Staff Publications, 2004

Books Dawkins, P. and Steketee, P. (eds), Reforming Australia: New policies for a new generation. Melbourne University Press: Melbourne. Evans, M. and Kelley, J. Australian economy and society 2002: Religion, morality, and public policy in international perspective, 1984–2002. Federation Press: Sydney.

Contributions to Books Creedy, J., Kalb, G.R. and Scutella, R. ‘Evaluating the income redistribution effects of tax reforms in discrete hours models’ in Studies on economic well-being: Essays in honor of John P. Formby. Edited by Amiel, Y. and Bishop, J.A. Elsevier: California, USA, 199–226. Dawkins, P. ‘Education and innovation’ in Reforming Australia: New policies for a new generation. Edited by Dawkins, P. and Steketee, M. Melbourne University Press: Melbourne, 74–92. Dawkins, P. ‘The intergenerational debate’ in Reforming Australia: New policies for a new generation. Edited by Dawkins, P. and Steketee, M. Melbourne University Press: Melbourne, 12–25. Evans, M. and Sikora, J. ‘Selfemployment in Australia, 1980–1999’ in The reemergence of self-employment: A comparative study of self-employment dynamics and social inequality. Edited by Arum, R. and Mueller, W. Princeton University Press: Princeton, NJ, 230–244. Wooden, M. ‘Work and family’ in Reforming Australia: New policies for a new generation. Edited by Dawkins, P. and Steketee, M. Melbourne University Press: Melbourne, 44–59.

Refereed Journal Articles Cai, L. ‘Length of completed spells in the Disability Support Pension (DSP) program.’ Australian Social Policy, 2002–03, 101–120. Cai, L. and Gregory, R. ‘Inflows, outflows and the growth of the Disability Support Pension (DSP) program.’ Australian Social Policy, 2002–03, 121–143. Cai, L. and Gregory, R. ‘Labour market conditions, applications and grants of Disability Support Pension (DSP) in Australia.’ Australian Journal of Labour Economics, 7: 377–394. Creedy, J. and Scutella, R. ‘The role of the unit of analysis in tax policy reform evaluations of inequality and social welfare.’ Australian Journal of Labour Economics, 7: 89–108. Dixon, R. and Lim, G.C. ‘The incidence of long-term unemployment in Australia: 1978– 2003.’ Australian Journal of Labour Economics, 7: 499–511. Dixon, R. and Lim, G.C. ‘Underlying inflation in Australia: Are current measures satisfactory?’ Economic Record, 80: 373–386. Headey, B., Headey, S., Janssen, C. and Muffels, R. ‘Who enjoys the fruits of growth? Impact of governments and markets on living standards in Germany, The Netherlands and the U.S.A., 1987–1996.’ Social Indicators Research, 65: 125–144. Headey, B. and Wooden, M. ‘The effects of wealth and income on subjective well-being and ill-being.’ Economic Record, Special Issue, 80: S24–S33. Jensen, P. and Webster, E. ‘Recent patterns of trade marking activity in Australia.’ Australian Intellectual Property Journal, 15: 112–126.

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Johnson, D. and Wilkins, R. ‘The effects of changes in family composition and employment patterns on the distribution of income in Australia: 1981–2 to 1997–8.’ Economic Record, 80: 219–238. Kalb, G. and Scutella, R. ‘Wage and employment rates in New Zealand from 1991 to 2001.’ New Zealand Economic Papers, 38: 21–47. Kelley, J. and Evans, M. ‘Effect of family structure on life satisfaction: Australian evidence.’ Social Indicators Research, 69: 303–353. Kelley, J. and Evans, M. ‘Subjective social location: Data from 21 nations.’ International Journal of Public Opinion Research, 166: 3–38. Leahy, A., Loundes, J., Webster, E. and Yong, J. ‘Industrial capabilities in Victoria.’ Economics and Labour Relations Review, 15: 74–98. Lim, G.C. and McNelis, P.D. ‘Learning and the monetary policy strategy of the European Central Bank.’ Journal of International Money and Finance, 23: 997–1010. Marks, G. ‘Communist party membership in ﬁve former Soviet Bloc countries, 1945–1989.’ Communist and Post-Communist Studies, 3: 241–263. Marks, G. ‘The measurement of socioeconomic inequalities in education: A further comment.’ Acta Sociologica, 47: 91–93. Marks, G., McMillan, J. and Ainley, J. ‘Policy issues for Australia’s education systems: Evidence from international and Australian research.’ Education Policy Analysis Archives, 12 (17). Scutella, R. and Wooden, M. ‘Jobless households in Australia: Incidence, characteristics and ﬁnancial consequences.’ Economic and Labour Relations Review, 14: 187–207.

Stein, J.L. and Lim, G.C. ‘Asian crises: Theory, evidence and warning signals.’ Singapore Economic Review, 49: 135–162. Tang, J. and Tseng, Y.P. ‘Constructing a measure of industry-speciﬁc human capital using Tobin’s q theory.’ Economics Bulletin, 10: 1–7. Tang, J. and Tseng, Y.P. ‘Industryspeciﬁc human capital, knowledge labour and industry wage structure in Taiwan.’ Applied Economics, 36: 155–164. Watson, N. and Wooden, M. ‘Sample attrition in the HILDA Survey.’ Australian Journal of Labour Economics, 7: 293–308. Webster, E. ‘Firms’ decisions to innovate and innovation routines.’ Economics of Innovation and New Technology, 13: 1–14. Wilkins, R. ‘The effects of disability on labour force status in Australia.’ Australian Economic Review, 37: 1–24. Wooden, M. and Warren, D. ‘Nonstandard employment and job satisfaction: Evidence from the HILDA Survey.’ Journal of Industrial Relations, 46: 275–297.

Other Journal Articles Buddelmeyer, H., Dawkins, P., Freebairn, J. and Kalb, G. ‘Bracket creep, effective marginal tax rates and alternative tax packages.’ Quarterly Bulletin of Economic Trends, 1.04: 17–28. Buddelmeyer, H., Dawkins, P. and Kalb, G. ‘The Melbourne Institute report on the 2004 Federal Budget.’ Quarterly Bulletin of Economic Trends, 2.04: 19–23. Chua, M. ‘Forecasts for the States and Territories.’ Quarterly Bulletin of Economic Trends, 2.04: 10–16.

Chua, M. ‘Forecasts for the States and Territories.’ Quarterly Bulletin of Economic Trends, 3.04: 11–17. Chua, M. ‘States and Territories.’ Quarterly Bulletin of Economic Trends, 4.04: 11–17. Chua, M., Lim, G. and Song, L.L. ‘Oil prices and the economic outlook for Australia—A scenario analysis.’ Quarterly Bulletin of Economic Trends, 4.04: 19–20. Evans, M. ‘Do Catholic schools and independent schools enhance education success?’ Australian Social Monitor, 7: 53–68. Evans, M. and Kelley, J. ‘Abortion and moral reasoning: Sources of attitudes towards abortion.’ Australian Social Monitor, 6: 74–88. Evans, M. and Kelley, J. ‘Assessing age pension options, Part I.’ Australian Social Monitor, 6: 67–73. Headey, B. and Wooden, M. ‘Wealth matters more than income to happiness.’ Australian Social Monitor, 7: 49–50. Jensen, P. and Webster, E. ‘Achieving the optimal power of patent rights.’ Australian Economic Review, 37: 419–426. Kalb, G. ‘Introduction: The use of simulations in policy analysis.’ Australian Journal of Labour Economics, 7: 1–12. Kelley, J. and Evans, M. ‘Choice between government, Catholic and independent schools: Culture and community, rather than class.’ Australian Social Monitor, 7: 31–42. Kelley, J. and Evans, M. ‘Class, religion and education: Who gains most from Catholic and independent schooling?’ Australian Social Monitor, 7: 69–80. Kelley, J. and Evans, M. ‘Is there too much inequality in Australia?’ Australian Social Monitor, 7: 92–100.

Kelley, J. and Evans, M. ‘Sources of public opinion on old age income options, Part 2: Social, economic and cultural inﬂuences in Australia.’ Australian Social Monitor, 7: 1–12. Kelley, J. and Evans, M. ‘Traditional ways of life and parental divorce, cohorts born 1900–1975.’ Australian Social Monitor, 7: 13–21. Leahy, A. and Summers, P. ‘Consumer surveys of the Melbourne Institute of Applied Economic and Social Research.’ Australian Economic Review, 37: 446–453. Marks, G. ‘School sector differences in tertiary entrance: Improving the educational outcomes of government school students.’ Australian Social Monitor, 7: 43–47. Smith, P. ‘United States.’ Quarterly Bulletin of Economic Trends, 3.04: 8–10. Smith, P. ‘United States.’ Quarterly Bulletin of Economic Trends, 4.04: 8–10. Song, L.L. ‘Australia.’ Quarterly Bulletin of Economic Trends, 3.04: 2–7. Song, L.L. ‘Australia.’ Quarterly Bulletin of Economic Trends, 4.04: 2–7. Song, L.L. ‘United States.’ Quarterly Bulletin of Economic Trends, 2.04: 7–9. Song, L.L. and Chua, M. ‘Forecasts for the States and Territories.’ Quarterly Bulletin of Economic Trends, 1.04: 10–16. Song, L.L. and Leahy, A. ‘Australia: Outcomes and outlook.’ Quarterly Bulletin of Economic Trends, 1.04: 1–6. Song, L.L., Leahy, A. and Summers, P. ‘Australia: Outcomes and outlook.’ Quarterly Bulletin of Economic Trends, 2.04: 1–6. Song, L.L., Leahy, A. and Summers, P. ‘United States.’ Quarterly Bulletin of Economic Trends, 1.04: 7–9.

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Staff Publications, 2004

Song, L.L. and Summers, P. ‘Comparison of Treasury and Melbourne Institute forecasts and implications for the Budget bottom line.’ Quarterly Bulletin of Economic Trends, 2.04: 17–18. Watson, N. and Wooden, M. ‘The HILDA Survey: A summary.’ Australian Journal of Labour Economics, 7: 117–124. Watson, N. and Wooden, M. ‘The HILDA Survey four years on.’ Australian Economic Review, 7: 343–349.

Conference Proceedings Evans, M. and Kelley, J. ‘Do institutions affect behaviour? A case study of parental divorce in Australia: Cohorts born 1900–1975.’ Annual Conference of the Australian Sociological Association, Beechworth, Australia. Evans, M. and Kelley, J. ‘Trends in women’s labour force participation in Australia, 1984–2002.’ Annual Conference of the Australian Sociological Association, Beechworth, Australia. Evans, M. and Kelley, J. ‘Varieties of capitalism and class conﬂict.’ American Sociological Association Annual Meeting, San Francisco, USA.

Melbourne Institute Working Papers Drago, R., Tseng, Y.P. and Wooden, M. ‘Family structure, usual and preferred working hours, and egalitarianism in Australia.’ 1/04. Jensen, P. and Webster, E. ‘Patterns of trademarking activity in Australia.’ 2/04. Headey, B. and Wooden, M. ‘The effects of wealth and income on subjective well-being and ill-being.’ 3/04. Cai, L. and Kalb, G. ‘Health status and labour force participation: Evidence from the HILDA data.’ 4/04.

(cont’d)

Scutella, R. ‘Moves to a basic income-flat tax system in Australia: Implications for the distribution of income and supply of labour.’ 5/04. Doiron, D. and Kalb, G. ‘Demands for childcare and household labour supply in Australia.’ 6/04. Wilkins, R. ‘Do longer working hours lead to more workplace injuries? Evidence from Australian industrylevel panel data.’ 7/04. Cai, L. ‘An analysis of durations on the Disability Support Pension (DSP) program.’ 8/04. Smith, P. and Summers, P. ‘How well do Markov switching models describe actual business cycles? The case of synchronization.’ 9/04. Jensen, P. and Webster, E. ‘Examining biases in measures of firm innovation.’ 10/04. Drago, R., Black, D. and Wooden, M. ‘Gender and work hours transitions in Australia: Drop ceilings and trap door floors.’ 11/04. Headey, B., Marks, G. and Wooden, M. ‘The structure and distribution of household wealth in Australia.’ 12/04. Cobb-Clarke, D., Frijters, P. and Kalb, G. ‘Job search success: Comparing job offer rates in and out of employment.’ 13/04. Borland, J. and Tseng, Y.P. ‘Does “Work for the Dole” work?’ 14/04. Headey, B., Muffels, R. and Wooden, M. ‘Money doesn’t buy happiness ... or does it? A reconsideration based on the combined effects of wealth, income and consumption.’ 15/04. Wilkins, R. ‘The extent and consequences of underemployment in Australia.’ 16/04. Jensen, P. and Webster, E. ‘SMEs and their use of intellectual property rights in Australia.’ 17/04.

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Aw, B.Y. and Palangkaraya, A. ‘Local knowledge spillovers in the Indonesian manufacturing industry.’ 18/04. Drago, R., Black, D. and Wooden, M. ‘Female breadwinner families: Their existence, persistence and sources.’ 19/04. Palangkaraya, A. ‘Effects of recent carrot-and-stick initiatives on private health insurance coverage in Australia.’ 20/04. Evans, M. and Kelley, J. ‘Assessing age pension options: Public opinion in Australia 1994–2001 with comparisons to Finland and Poland.’ 21/04. Evans, M. and Kelley, J. ‘Parental divorce in Australia, cohorts born 1900–1975.’ 22/04. Evans, M. and Kelley, J. ‘Trends in women’s labour force participation in Australia: 1984–2002.’ 23/04. Evans, M. and Kelley, J. ‘Effect of family structure on life satisfaction: Australian evidence.’ 24/04. Evans, M. and Kelley, J. ‘Effects of family of origin on women’s and men’s workforce involvement.’ 25/04. Cai, L., Creedy, J. and Kalb, G. ‘Accounting for population ageing in tax microsimulation modelling by survey reweighing.’ 26/04. Grifﬁths, W. and Webster, E. ‘The determinants of research and development and intellectual property usage among Australian companies, 1989 to 2002.’ 27/04. Webster, E., Wooden, M. and Marks, G. ‘Reforming the labour market for Australian teachers.’ 28/04. Jensen, P. and Stonecash, R. ‘The efﬁciency of public sector outsourcing contracts: A literature review.’ 29/04. Song, L.L. and Freebairn, J. ‘How big was the effect of budget consolidation on the Australian economy in the 1990’s?’ 30/04.

Jensen, P. and Webster, E. ‘Factors affecting the power of patent rights.’ 31/04. Creedy, J., Kalb, G. and Kew, H. ‘Conﬁdence intervals for policy reforms in behavioural tax microsimulation modelling.’ 32/04. Palangkaraya, A. and Yong, J. ‘How effective is “Lifetime Health Cover” in raising private health insurance coverage in Australia? An assessment using regression discontinuity.’ 33/04.

Major Reports Buddelmeyer, H., Dawkins, P., Duncan, A., Kalb, G. and Scutella, R. ‘An analysis of the Australian Labor Party’s tax and family beneﬁts package using the Melbourne Institute Tax and Transfer Simulator (MITTS).’ Report to the Australian Labor Party. Casselman, R., Gans, J., Gay, E., Jensen, P., Morgan, O., Weatherall, K. and Webster, E. ‘Factors affecting the use of intellectual property (IP) protection by small and medium enterprises (SMEs) in Australia.’ Report to the Commonwealth Department of Industry, Tourism and Resources. Chua, M. and Summers, P. ‘Forecasting patent applications and renewals.’ Report for IP Australia. Dawkins, P., Lim, G. and Summers, P. ‘The impact of population ageing on labour force participation rates.’ Report to the Victorian Department of Treasury and Finance. Dawkins, P., Webster, E., Hopkins, S., Yong, J. and Palangkaraya, A. ‘Recent private health insurance policies in Australia: Health resource utilization, distributive implications and policy options.’ Melbourne Institute Report No. 3.

Lloyd, P. and Smith, P. ‘Global economic challenges to ASEAN integration and competitiveness: A prospective outlook.’ Report sponsored by AusAID for the ASEAN Secretariat. Williams, R. and Van Dyke, N. ‘The international standing of Australian universities.’ Melbourne Institute Report No. 4. Wise, S., Da Silva, L., Webster, E. and Sanson, A. ‘Efﬁcacy of early childhood interventions.’ Australian Institute of Family Studies. Report prepared for the Department of Family and Community Services.

HILDA Technical Papers Watson, N. and Wooden, M. ‘Wave 2 survey methodology.’ 1/04. Watson, N. ‘Income and wealth imputation for Waves 1 and 2.’ 3/04. Watson, N. ‘Wave 2 weighting.’ 4/04. Watson, N. and Wooden, M. ‘Assessing the quality of the HILDA Survey Wave 2 data.’ 5/04.

Other Papers and Reports Buddelmeyer, H., Mourre, G. and Ward, M. ‘The determinants of parttime work in EU countries: Empirical investigations with macro-panel data.’ IZA Discussion Paper: 1361. Buddelmeyer, H., Mourre, G. and Ward, M. ‘The determinants of parttime work in EU-15 countries: Trend and policy.’ IZA Discussion Paper: 1415. Harding, D. and Harding, G. ‘Minimum wages in Australia: An analysis of the impact on small and medium sized business.’ Report to the Department of Employment and Workplace Relations, March. Leahy, A. ‘IdeaWorks – Melbourne Institute Retail Probe report.’ Quarterly Bulletin of Economic Trends, 4.04: 18. Leahy, A. ‘ING – Melbourne Institute Household Saving Report update.’ Quarterly Bulletin of Economic Trends, 3.04: 18.

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Staff Seminars and Presentations

Bosworth, D. ‘The ancestral tree of IPC C12S: A preliminary exploration based on a sample of “two”.’ Paper presented at the Oxford Intellectual Property Research Centre Seminar Series, 27 January. Bosworth, D. ‘The evolution of the global biotech sector.’ Keynote speech, International Conference on Innovation and Intellectual Property, INSEAD, Singapore, 15–16 July. Bosworth, D. ‘The quality of patents and the patent system.’ Paper presented at the European Patent Ofﬁce, Committee of Experts, Munich, 10 December. Buddelmeyer, H. ‘Children and women’s participation dynamics: Direct and indirect effects.’ Paper presented at the 7th Australasian Labour Econometrics Workshop, University of Auckland, 13–14 August. Buddelmeyer, H. ‘The effects of child care costs on the labour market participation and hours worked by Australian mothers.’ Paper presented at the 18th Annual Conference of the European Society of Population Economics, Bergen, Norway, 10–12 June. Buddelmeyer, H. ‘An evaluation of the performance of regression discontinuity design on PROGRESA.’ Paper presented at the Department of Econometrics and Business Statistics, Monash University Seminar Series, 10 September. Buddelmeyer, H. ‘Part-time work in EU countries: Labour market mobility, entry and exit.’ Paper presented in the Microeconometrics Seminar Series, Department of Economics, University of Melbourne, 3 March.

Buddelmeyer, H. ‘Who uses child care, for what purpose and what is their experience of balancing work and family life.’ Presentation to the annual Social Policy Research Workshop, Department of Family and Community Services, Canberra, 8–9 November. Cai, L. ‘An analysis of durations on the Disability Support Pension (DSP) program.’ Paper presented at the 7th Australasian Labour Econometrics Workshop, University of Auckland, 13–14 August. Cai, L. ‘Health status and labour force participation: Evidence from HILDA data.’ Paper presented at the 2004 Australasian Meeting of the Econometric Society, Melbourne, 7–9 July. Also presented at the Australian Health Economists Conference, Melbourne, 30 September–1 October and at the Australian Labour Market Research Workshop, Flinders University, Adelaide, 19–20 February. Cai, L. ‘Understanding the nature of, and factors behind, exits from the Disability Support Pension.’ Presentation to the annual Social Policy Research Workshop, Department of Family and Community Services, Canberra, 8–9 November. Cai, L. ‘Unemployment and inﬂows onto the Disability Support Pension (DSP) program: Evidence from FaCS administrative data.’ Paper presented at the Australian Labour Market Research Workshop, Perth, 6–7 December. Chua, M. ‘Bayesian analyses of cointegration in structural error correction model.’ Paper presented at the 2004 Far Eastern Econometric Society Meeting, 30 June–2 July.

Page 24 – Annual Report 2004 and Outlook 2005

Chua, M. Participant in a programme on ‘Econometric forecasting and high-frequency data analysis.’ National University of Singapore, 9–22 May. Dawkins, P. ‘The economic big picture.’ Presented at ANZSOG Executive Fellows Program, Melbourne, 25–26 October. Dawkins, P. ‘Jobless families.’ Welfare Reform Consultative Forum, 17 March. Dawkins, P. ‘The signiﬁcance of welfare policy for participation and economic growth.’ Presentation to the Commonwealth Secretaries Retreat, Kirribilli House, Sydney, 23 July. Dawkins, P. ‘The structure and funding of school systems and making schools better.’ Paper presented at the Making Schools Better Conference, University of Melbourne, 26–27 August. Headey, B. ‘Cohort and distributional analysis of the wealth of Australians.’ Presentation to the annual Social Policy Research Workshop, Department of Family and Community Services, Canberra, 8–9 November. Headey, B. ‘Money doesn’t buy happiness – or does it? A reconsideration based on the combined effects of wealth, income and consumption.’ Paper presented at the German Socio-Economic Panel (GSOEP) Users’ Conference, Berlin, 24–26 June. Headey, B. Ofﬁcial presenter/ discussant, ‘Multidimensional measurement and comparisons of economic well-being.’ TwentyEighth General Conference of the International Association for Research on Income and Wealth, Cork, Ireland, 22–28 August.

Jensen, P. ‘Examining biases in measures of ﬁrm innovation.’ Presented to Innovation Measurement Symposium, Melbourne Business School, University of Melbourne, 9 November. Also presented to the European Applied Econometrics Association Conference Innovation and Intellectual Property, INSEAD, Singapore, 15–16 July.

Jensen, P. ‘Risk-incentive trade-offs in the presence of demand and cost uncertainty.’ Paper presented at the Australian Conference of Economists, University of Sydney, 27–29 September. Jensen, P. ‘SMEs and IP.’ Presented to the IPRIA Advisory Board, Melbourne, 29 April. Kalb, G. ‘Behavioural microsimulation.’ Presentation to the New Zealand Treasury, 16 August.

Kalb, G. ‘Behavioural microsimulation modelling with the Melbourne Institute Tax and Transfer Simulator (MITTS): Uses and extensions.’ Paper presented at the Productivity Commission Conference, Quantitative Tools for Microeconomic Policy Analysis, Hyatt Hotel, Canberra, 17–18 November. Kalb, G. Discussant for the paper ‘The impact of unobserved own and peers’ ability on college grades.’ 7th Australasian Labour Econometrics Workshop, University of Auckland, 13–14 August.

Page 25 – Annual Report 2004 and Outlook 2005

Staff Seminars and Presentations

Kalb, G. ‘Financial incentives for mothers to enter paid work: The current tax and transfer system.’ Presentation to the annual Social Policy Research Workshop, Department of Family and Community Services, Canberra, 8–9 November. Kalb, G. ‘New Zealand labour supply from 1991–2001: An analysis based on a discrete choice structural utility model.’ Paper presented at the 2004 Australasian Meeting of the Econometric Society, Melbourne, 7–9 July. Kalb, G. and Scutella, R. ‘The effect of individual characteristics, trends, and policy on labour supply in New Zealand: A structural approach.’ Paper presented in the Microeconometrics Workshop Series, Department of Economics, University of Melbourne, 21 April. Marks, G. ‘School sector differences in tertiary entrance.’ Paper presented at the Making Schools Better Conference, University of Melbourne, 26–27 August. Palangkaraya, A. ‘Discerning the effects of recent private health insurance policy changes in Australia.’ Presented to the Australasian Meeting of the Econometric Society, 7–9 July. Palangkaraya, A. ‘How effective is Lifetime Health Cover in raising private health insurance coverage in Australia? An assessment using regression discontinuity.’ Paper presented at the Australian Conference of Economists, University of Sydney, 27–29 September.

Palangkaraya, A. ‘R&D and intellectual property scoreboard 2004.’ Presented to Measuring Rates and Drivers of Innovation: In Countries and Companies Symposium, University of Melbourne, 9 November. Palangkaraya, A. ‘Relative factor abundance and FDI factor intensity in developed countries.’ Paper presented at the Australian Conference of Economists, University of Sydney, 27–29 September. Song, L.L. ‘The effects of budget consolidation on the Australian economy in the 1990s.’ Presented at the 2004 Australasian Macro Workshop, Canberra, 15–16 April. Song, L.L. ‘Response of consumption to income, interest rates and credit in Australia.’ Presented at the Melbourne Institute Workshop, 9 November. Summers, P. ‘Consumer sentiment, household surveys, and the macroeconomic outlook.’ Presented to the Board of Directors, Feltex Carpets Australia, 1 April. Summers, P. ‘Interest rates, inﬂation and monetary policy.’ Presented as part of the ‘Window on Economics’ program, 11 February. Summers, P. ‘The macroeconomic outlook.’ Presented to the Australian Institute of Company Directors, Eminent Economists Forum, 30 January. Summers, P. ‘Recent trends in household savings and debt.’ Presented at a seminar on Household Wealth, Savings and Debt, organised by the Department of Family and Community Services, 4 May.

Page 26 – Annual Report 2004 and Outlook 2005

(cont’d)

Tseng, Y.P. ‘Causes of long-term unemployment.’ Presentation to the annual Social Policy Research Workshop, Department of Family and Community Services, Canberra, 8–9 November. Tseng, Y.P. Discussant for the paper ‘Where do you run after you run for cover? A model of the demand for private health insurance in Australia.’ 7th Australasian Labour Econometrics Workshop, University of Auckland, 13–14 August. Watson, N. ‘Cross wave imputation – ﬁrst steps: The HILDA experience.’ Paper presented at the Australian Statistical Conference, Cairns, 12–16 July. Webster, E. ‘The determinants of innovation pathways of Australian companies, 1989 to 2002.’ Centre for Applied Econometrics, University of Melbourne, 2 June. Webster, E. ‘The determinants of research and development and intellectual property usage among Australian companies, 1989 to 2002.’ Paper presented at the Applied Econometrics Association Conference, Innovation and Intellectual Property, INSEAD, Singapore, 15–16 July. Webster, E. Discussant on ‘Innovation and market value.’ IPRIA evening seminar series, 6 April. Webster, E. ‘Examining biases in measures of ﬁrm innovation.’ Paper presented at the Australian Conference of Economists, Sydney, 27–30 September.

Webster, E. ‘Firms’ decisions to innovate and innovation routines: Evidence from large Australian organisations.’ Australian Graduate School of Entrepreneurship Babson Conference, Hawthorn, 24–25 February. Webster, E. ‘The labour market for Australian teachers.’ Paper presented at the Making Schools Better Conference, University of Melbourne, 26–27 August. Wilkins, R. ‘Australia’s recent economic performance: Contributions of labour market and social policy.’ Presentation to the International Reform Monitor meeting, Danish Institute for Social Research, Copenhagen, 17 May. Wilkins, R. ‘The decline in male employment in Australia: A cohort analysis.’ Paper presented at the Australian Labour Market Research Workshop, University of Western Australia, 6 December. Wilkins, R. Discussant on ‘Polarisation in income and earnings distributions in Australia.’ 7th Australasian Labour Econometrics Workshop, University of Auckland, 14 August. Wilkins, R. ‘Dynamic properties of income support receipt.’ Presentation to the annual Social Policy Research Workshop, Department of Family and Community Services, Canberra, 8 November.

Wilkins, R. ‘The effects of disability on labour force status in Australia.’ Australian Labour Market Research Workshop, Flinders University, 13 February. Williams, R. Keynote address on ‘Performance measurement’ to the Conference for Heads of Department in the University of Melbourne, 16 August. Williams, R. ‘Public funding of teaching and research in universities: A view from the south.’ Paper presented at the Taking Public Universities Seriously Conference, University of Toronto, 3 December. Wooden, M. ‘Balancing work and family at the start of the 21st century: Evidence from Wave 1 of the HILDA Survey.’ Paper presented at the Inaugural Families Australia Conference, ‘Globalization, Families and Work’, Brisbane Exhibition Centre, 1–2 April. Wooden, M. ‘Gender and work hours transitions in Australia: Drop ceilings and trap door ﬂoors.’ Paper presented at the Conference of the Work/Life Association, Victoria University, Melbourne, 15 September.

Wooden, M. ‘The HILDA Survey 4 years on.’ Presentation to the Commonwealth Secretaries Retreat, Kirribilli House, Sydney, 23 July. Also presented to seminars at the Department of Family and Community Services, Canberra, 28 July and at The Treasury, 23 August. Wooden, M. ‘Low-income households, debt and ﬁnancial stress.’ Invited presentation to a joint South Australian Department of Human Services Seminar and South Australian Council of Social Service seminar, ‘Not Quite Making Ends Meet: How Debt Contributes to Disadvantage’, Tandanya National Aboriginal Cultural Institute, Adelaide, 18 June. Yong, J. ‘Costly ageing or costly deaths? Understanding health care expenditure using Australian Medicare payments data.’ Australasian Meeting of the Econometric Society, Melbourne, 7–9 July. Yong, J. ‘How effective is “Lifetime Health Cover” in raising private health insurance coverage in Australia? An assessment using regression discontinuity.’ School of Economics Seminar, Deakin University, 27–29 September.

Page 27 – Annual Report 2004 and Outlook 2005

Our Staff, 2004

Research Staff Director and Ronald Henderson Professor Professor Peter Dawkins BSc Lough MSc (Eco) Lond PhD Lough FASSA FIPA (Vic) Deputy Director, Director HILDA Survey Project, and Director of the Labour Economics and Social Policy Research Program Professor Mark Wooden BEc Hons Flin MSc Lond Director, Applied Macroeconomics Research Program and Principal Research Fellow Dr Peter Summers BA MA MSc PhD Iowa (until June 2004) Director, Applied Macroeconomics Research Program and Professorial Research Fellow Professor Guay Lim BEc MEc PhD ANU (March 2004 onwards) Director, Applied Microeconomics Research Program and Senior Research Fellow Dr Elizabeth Webster BEc Hons MEc Monash PhD Camb Professorial Research Fellows Professor Derek Bosworth BA Lanc MSc PhD Warw Professor Anthony Scott BA Hons Newcastle MSc York PhD Aber Principal Research Fellow Associate Professor Bruce Headey BA Oxf MA Wisc PhD Strath

Senior Research Fellows Dr Mariah Evans BA Reed MA Ill PhD Chicago Dr Guyonne Kalb MEc Erasmus PhD Monash Dr Roger Wilkins BCom Hons MCom Hons Melb MSc Wisc PhD Melb Dr Jongsay Yong BA BSocSc Hons MSocSc NUS MA PhD Brit Col Research Fellows Dr Hielke Buddelmeyer MSc Vrije Am MA PhD NYU Dr Lixin Cai BEd Henan MA Renmin MEc PhD ANU Dr Michael Chua BEc Hons PhD UNE Dr Paul Jensen BEc USyd PhD AGSM Dr Alfons Palangkaraya BSc MA PhD Oregon St 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 Dr Nina Van Dyke BA Stanford MA PhD UCal Dr Sher Verick BA BSc MEcDev ANU PhD Bonn Survey Research Analysts and Data Managers Mr Simon Freidin BSc Hons GradDipCompSc LaT Mrs Glenys Harding BEc ANU Ms Anne Leahy BCom GCertClassics Melb Ms Nicole Watson BSc UWA GDipMgtSc Canb

Page 28 – Annual Report 2004 and Outlook 2005

Research Ofﬁcers Mr David Black BCom Hons Melb Mrs Rianna Chapman BA Hons Melb MPh Monash Ms Vu Thi Hong Ha BEc Hons ANU Ms Penelope Smith BEc Hons UWA MCom Melb Ms Diana Warren BCom Hons MCom W’gong Research Assistant Ms Kerry Ware

Postgraduate Students Ms Kinga Elo BA MSc BUESPA MA CEU Mr Yasar Gedik BEc Hons LaT MCom Melb Mr Matt Hammill BEc Newcastle BCom Hons Melb Mr Wang-Sheng Lee BA Colby MA Michigan Ms Rosanna Scutella BCom Hons Melb Ms Penelope Smith BEc Hons UWA MCom Melb

General Staff Business Managers Ms Rachel Derham BSc Melb (August 2004 onwards) Mr Nikos Thomacos BBus (Eco) RMIT BA Hons Deakin (until July 2004) Publications Manager Ms Nellie Lentini BA Monash Functions Manager Ms Penelope Hope BA LaT Finance Ofﬁcer Mr Chris Bowden BSc BA Monash MBM Deakin System Support Ofﬁcer Mr Woei Tian Liew BSc MSc LaT GDipEc Melb Executive Assistant to the Director Ms Heidi McLean BA Hons Tas MCom Melb Administrative Assistant, HILDA Ms Samantha Roberts BA LaT Administrative Assistants Mr Duane Barron Ms Angie Cumming DipBus NMIT Ms Vibeke Pedersen BA Hons BMus Melb Ms Rosy Qin BCom DipEd Melb

Adjunct Professors and Associates Adjunct Professors Professor Jeff Borland MA PhD Yale, Head, Department of Economics, The University of Melbourne Professor John Creedy BSc (Eco with Stats) Brist BPhil (Eco) Oxf, Truby Williams Chair of Economics, Department of Economics, The University of Melbourne Professor John Freebairn MAgEc UNE PhD Davis, Department of Economics, The University of Melbourne Professor Bill Grifﬁths BAgEc Hons UNE PhD Illinois, Professor of Econometrics, Department of Economics, The University of Melbourne Professor Danny Samson BEc PhD UNSW, Head, Department of Management, The University of Melbourne Professorial Fellows 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 Professor Robert Drago BS Tulsa MA PhD Mass/Am, Professor of Labour Studies and Women’s Studies, Pennsylvania State University

Professor Alan Duncan BA Hons Manc DPhil York, Professor of Microeconomics, School of Economics, The University of Nottingham Professor Jonathan Kelley BA Camb PhD Berkeley, Director, International Survey Project, The Australian National University Professor Boris Schedvin BEc PhD Syd Professor Ross Williams BCom Melb MScEc PhD Lond FASSA Principal Fellows Dr Ernst Boehm AUA BEc Hons MEc Adel MCom Melb DPhil Oxf Dr Gary Marks BSc Hons MSc Melb PhD Qld Dr John Nieuwenhuysen BA Hons MA Natal PhD LSE FASSA Senior Fellows Dr Denise Doiron BA Monc MA PhD UBC, Senior Lecturer, The University of New South Wales Associate Professor Sandra Hopkins BA Hons Otago MCom UNSW PhD Tas, Economics, School of Economics and Finance, Curtin University of Technology Dr Mark Rogers BSc Lond MSc Warw PhD ANU, Tutor in Economics and Management, Harris Manchester College, Oxford University Dr Michael Shields BA Hons Stafford MSc Health UNY PhD Leic, Senior Lecturer, Department of Economics, The University of Melbourne

Page 29 – Annual Report 2004 and Outlook 2005

Advisory Board

Members in 2004 Chairperson

Mr Tony Cole AO, Principal – National Practice Leader, Investment Consulting, Mercer Investment Consulting Members

Professor Maggie Abernethy, Dean, Faculty of Economics and Commerce, The University of Melbourne Ms Carol Austin, Investment Services Director, Contango Asset Management Mr Gary Banks, Chairman, Productivity Commission Ms Sharan Burrow, President, Australian Council of Trade Unions Professor Max Corden, Professorial Fellow, Department of Economics, The University of Melbourne Professor Peter Dawkins, Director and Ronald Henderson Professor, Melbourne Institute Ms Rachel Derham, Business Manager, Melbourne Institute Mr Bill Evans, General Manager, Economics, Westpac Banking Corporation Father Nic Frances, Executive Director, Brotherhood of St Laurence Professor John Freebairn, Professor, Department of Economics, The University of Melbourne Dr Christopher Kent, Head of Economic Research, Reserve Bank of Australia

Professor Frank Larkins, Deputy Vice-Chancellor (Research), The University of Melbourne Professor Guay Lim, Professorial Research Fellow, Melbourne Institute Mr Ian Little, Secretary, Department of Treasury and Finance Associate Professor Alison McClelland, Associate Professor, Department of Social Work, La Trobe University Mr Tony Nicholson, Executive Director, Brotherhood of St Laurence Mr Phil Ruthven, Executive Chairman, IBISWorld Mr Bill Scales AO, Group Managing Director, Regulatory Corporate and Human Relations and Chief of Staff, Telstra Mr Glenn Stevens, Deputy Governor, Reserve Bank of Australia Mr Mark Sullivan, Secretary, Department of Family and Community Services Dr Pete Summers, Principal Research Fellow, Melbourne Institute Mr Nikos Thomacos, Business Manager, Melbourne Institute Dr Elizabeth Webster, Senior Research Fellow, Melbourne Institute Professor Mark Wooden, Professorial Research Fellow, Melbourne Institute

Page 30 – Annual Report 2004 and Outlook 2005

New Members in 2004

Ms Rachel Derham, Business Manager, Melbourne Institute Dr Christopher Kent, Head of Economic Research, Reserve Bank of Australia Professor Guay Lim, Head of Applied Macroeconomics, Melbourne Institute Mr Tony Nicholson, Executive Director, Brotherhood of St Laurence Members who Left in 2004

Father Nic Frances, former Executive Director, Brotherhood of St Laurence Mr Glenn Stevens, Deputy Governor, Reserve Bank of Australia Mr Mark Sullivan, Secretary for Veterans’ Affairs Dr Pete Summers, former Head of Applied Macroeconomics, Melbourne Institute Mr Nikos Thomacos, former Business Manager, Melbourne Institute

above from back row: Phil Ruthven, Bill Scales, Max Corden, Mark Wooden, Rachel Derham, John Freebairn, Roger Wilkins, Christopher Kent, Guay Lim, Beth Webster, Tony Nicholson, Tony Cole (Chairperson), Peter Dawkins, Bill Evans absent: Maggie Abernethy, Carol Austin, Gary Banks, Sharan Burrow, Nic Frances, Frank Larkins, Ian Little, Alison McClelland, Glenn Stevens, Mark Sullivan, Pete Summers, Nikos Thomacos

Page 31 â&#x20AC;&#x201C; Annual Report 2004 and Outlook 2005

Publications by Subscription

Melbourne Institute Journals Australian Economic Review

In 2004 the format of the Australian Economic Review (volume 37) remained unchanged, and continued to retain its strong emphasis on issues of contemporary policy relevance. A Policy Forum was published in each issue with topics on health economics; long-term issues in superannuation; competition issues in the Australian grocery industry; and intellectual property rights.

The contributed articles, with two to ďŹ ve in each issue, covered a diverse mix of topics including, for example, labour economics, health economics, greenhouse gases, mergers, and monetary policy. Each issue contained both a special article for tertiary students, and a data survey to highlight the availability and attributes of different databases. A summary of the composition of articles published in the Review in recent years is provided in Table 3.

Table 4 provides information on the receipt, progress and decisions taken on submissions of contributed articles in 2004, and in earlier years for comparison. Over the year, 35 new articles were submitted, a few below the long-term average. The acceptance rate has continued at around 40 per cent, and the backlog of accepted articles awaiting publication is at most one issue.

Table 3: Articles Published in the Australian Economic Review, 2001 to 2004 Type of Article Invited Articles

2001

2002

2003

2004

Contributed Articles

Policy Forum

Data Surveys For the Student Pages

487

462

463

2001

2002

2003

2004

Table 4: Contributed Articles in 2001 to 2004 Contributed Papers Brought forward from previous year (a) Submissions during year

Decisions Made Accepted: Published Accepted: In queue

Rejected/withdrawn

Resubmit In process

Note:

(a) Sum of acceptances in queue, re-submissions and articles in process.

Page 32 â&#x20AC;&#x201C; Annual Report 2004 and Outlook 2005

Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends

This quarterly publication is sponsored by Mercer Investment Consulting. It provides an authoritative analysis of the international, national and state economic environments, with a particular focus on reading the business cycle. In particular, it includes forecasts generated by the Melbourne Institute Time Series Forecasting Model. In addition, most issues include one or more special topics considered to be of current interest. Australian Social Monitor

The Melbourne Institute discontinued publication of the Australian Social Monitor in 2004. The last issue printed was volume 7, number 3–4. The journal aimed to monitor and analyse important social trends and attitudes. It was published with support from the International Social Science Surveys/Australia and ANUTECH at the Australian National University.

Westpac – Melbourne Institute Survey of Consumer Sentiment

Melbourne Institute Economic and Social Indicators

The consumer sentiment index is an average of five component indexes which reflect consumers’ evaluations of their household financial situation over the past and the coming year, anticipated economic conditions over the coming year and the next five years, and buying conditions for major household items. Assessments about future unemployment are also recorded. Each quarter, consumers are also surveyed about their views on buying conditions for cars and dwellings, the wisest place to invest savings and economic news recall. This report is produced monthly.

Melbourne Institute Wages Report

This 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. It adds to our knowledge about wages and provides a useful alternative to Australian Bureau of Statistics measures of earnings per person and a complement to the labour cost index. This report is produced quarterly. 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 leading index of inflation. Indexes of economic activity are designed to enhance the decision-making process of financial and business managers as well as policy makers by anticipating and identifying turning points in the economy. Each index blends several variables which reflect different aspects of the economy; their combination is intended to give a more representative picture than would any one indicator by itself.

Westpac – Melbourne Institute Survey of Consumer Sentiment: NSW, Victoria, Queensland, Western Australia

Each quarter key consumer sentiment data are published in relation to 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 produces a direct measure of inﬂationary expectations as consumers are asked whether, and by how much, they believe prices will go up or down. The report is produced monthly.

Page 33 – Annual Report 2004 and Outlook 2005

Publications by Subscription

ING – Melbourne Institute Household Saving Report

This survey-based report contains information about households’ current and future saving behaviour, their reasons for saving, their participation in and attitudes towards superannuation, the structure of household assets and debt, and households’ assessments of the best way of investing savings. This report is produced quarterly. In March 2005 this report was renamed the ING – Melbourne Institute Household Saving and Investment Report. 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 methodology used by the Australian Bureau of Statistics in calculating the quarterly consumer price index, this publication estimates month-tomonth price movements for a wideranging 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. It is standard reference material for those concerned with social welfare policy in Australia. Minimum income levels required to avoid a situation of poverty are presented for a range of family sizes and circumstances. The updated poverty lines take into account changes in the average income level of all Australians, reﬂecting the idea that poverty is relative. Each issue includes a table indicating changes in the purchasing power of the poverty lines and a table comparing welfare payment levels with poverty lines for various family types.

Page 34 – Annual Report 2004 and Outlook 2005

(cont’d)

Other Melbourne Institute Publications Melbourne Institute News

Melbourne Institute News was introduced in late 1999 to keep people abreast of various developments at the Melbourne Institute. Stories cover a range of items from all three major research programs, the HILDA Survey, conferences, forums and seminars. This newsletter is produced quarterly. Household, Income and Labour Dynamics in Australia (HILDA) Survey Annual Report 2004

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. Accompanying the release of the third wave of data from the HILDA Survey, the Annual Report provides information on the activities undertaken for the HILDA project thus far. Highlights from the Wave 3 data, together with a list of publications and information on how to access the HILDA data, are included in the report.

Melbourne Institute Working Paper Series

Australian Patent Applications Scoreboard 2004

The Melbourne Institute working papers are indicative of research projects undertaken within the Melbourne Institute. In 2004, 33 working papers were produced.

The Australian Patent Applications Scoreboard is a comprehensive collection of data about the number of patent applications made in Australia each year. It is a useful reference across a number of disciplines and industries. As it contains a large amount of information about patent applications in an easily accessible form, the Scoreboard is a useful tool for enterprises that facilitate the commercialisation of research projects. For example, it allows users to see at a glance the areas of technology where patent activity is highest in 2003, and activity going back ten years. Copies can be purchased through IPRIA, University of Melbourne.

Melbourne Institute Reports

The Melbourne Institute publishes ad hoc reports on important economic and social topics investigated by Melbourne Institute researchers. R&D and Intellectual Property Scoreboard 2004: Benchmarking Innovation in Australian Enterprises

This publication is the most comprehensive assessment to date of the innovative activities of large Australian enterprises. It provides an invaluable information source for benchmarking and competitor analysis. The innovative activities covered by the report include the latest available information on the level of R&D and applications for intellectual property (patents, trade marks and designs). The report includes an innovation index, ranking Australia’s most innovative ﬁrms; R&D expenditure and intensity rankings for parent companies; the level and intensity of intellectual property applications for parent companies; and industry listings (all measures combined). This is the seventh report produced in this series. Copies can be purchased through IPRIA, University of Melbourne.

Media Activities In 2004, at least 1200 references to the Melbourne Institute and its staff were identiﬁed in the print media and on television and radio. Melbourne Institute staff and products were cited in The Australian, The Weekend Australian, The Australian Financial Review, The Age, The Sunday Age, Herald Sun, The Sydney Morning Herald, The Canberra Times, The Courier Mail, The West Australian, Northern Territory News and various other newspapers. There were also media mentions in various international newspapers, journals and magazines. Staff at the Melbourne Institute are regularly featured as television and radio guests, participating in public debate through contributions to all media outlets. An online expert guide is available at <http://www.research. unimelb.edu.au/mediacontact/>.

Reforming Australia: New Policies for a New Generation

This book is based upon the November 2003 Economic and Social Outlook Conference, Pursuing Opportunity and Prosperity. In this book, the editors (Peter Dawkins and Mike Steketee), along with other leading academics from the University of Melbourne and journalists from The Australian, draw out the new thinking behind the development of policies for a new generation of Australians. To purchase a copy, visit the Melbourne University Press website.

With over 1200 identiﬁed media references in 2004, the Melbourne Institute is building on its proﬁle as a leading economic and social research institution with a diverse knowledge base.

Page 35 – Annual Report 2004 and Outlook 2005

Finance and Performance Indicators Income and Expenditure of the Melbourne Institute, 2000 to 2004 Income

2000

2001

2002

2003

2004

$2,299,358

$4,901,284

$4,773,959

$7,116,242

$7,706,733

Subscription services

$190,595

$189,695

$188,859

$200,069

$127,383

Forums/Conferences

$222,173

$111,558

$345,935

$318,221

$144,063 $7,133,888

Non-University funds made up of:

Contract research

$1,181,994

$4,134,352

$4,039,946

$6,457,114

Grants

$704,596

$465,679

$199,219

$140,838

$301,399

Faculty of Economics Department allocation

$150,000

$397,630

$1,115,240

Other University funds Total Income

$188,426

$535,679

$852,929

$616,448

$794,409

$2,637,784

$5,586,963

$5,776,888

$8,130,320

$9,616,382 $3,079,466

Expenditure Salaries

$1,721,936

$2,042,948

$2,562,695

$2,515,255

Other expenditure

$885,090

$3,520,924

$3,102,524

$4,798,833

$4,980,390

Total Expenditure

$2,607,026

$5,563,872

$5,665,219

$7,314,088

$8,059,856

$30,758

$23,092

$111,670

$816,232

$1,556,526

Surplus

Performance Indicators, 2000 to 2004 A. Research Performance

2000

2001

2002

2003

2004

National Competitive Research Grants

$506,508 33%

$465,679 –8%

$170,219 –63%

$122,838 –28%

$301,399 145%

Other Public Research Grants

$625,200 73%

$3,327,032 432%

$2,911,180 –12%

$5,927,229 104%

$6,069,664 2%

Industry and Other Research Funds

$855,230 36%

$815,597 –5%

$1,653,559 103%

$1,320,251 –20%

$1,335,670 1%

$1,986,938 45%

$4,608,308 132%

$4,734,958 3%

$7,370,318 56%

$7,706,733 5%

Refereed Journal Articles (accepted by DEST, weighted)

9.5 –34%

13.9 46%

22 58%

18.5 –16%

27.5 49%

Total Publications (accepted by DEST, weighted)

17.2 –48%

16.9 –2%

29.8 76%

19 –36%

37.6 98%

Total Publications

115 –26%

132 15%

112 –15%

83 –26%

117 41%

4 33%

4.5 13%

4.5 0%

5 11%

5 0%

0.5

1. Research Income

Total External Research Income 2. Publications

3. Higher Degree Students Research Higher Degree Students (full-time equivalent) Research Higher Degree Completions

B. Indicators with Respect to Business, Government and Public Policy Debates 1. Subscriptions to Melbourne Institute Products (excluding Australian Economic Review) 2. Value of Subscriptions and Sponsorship 3. References to the Melbourne Institute in the media

550 9%

561 2%

540 –4%

268 –50%

246 –8%

$500,620 –5%

$517,976 3%

$478,965 –8%

$548,548 15%

$566,288 3%

188 –38%

591 na

956 62%

1235 29%

1196 –3%

$2,637,784 14%

$5,586,963 112%

$5,776,888 3%

$8,130,320 41%

$8,616,382 18%

17.59 14%

27.93 59%

28.88 3%

40.65 41%

48.08 18%

C. Financial Performance 1. Total Income D. Multiplier Effect for the University (ratio of total income to the Faculty’s base-line funding) Page 36 – Annual Report 2004 and Outlook 2005

annual report 2004 and outlook 2005

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