4714.0 - National Aboriginal and Torres Strait Islander Social Survey, 2014-15
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 27/08/2019
Page tools: Print All

APPENDIX 5: PREDICTORS FOR BEING OUT OF THE LABOUR FORCE

IDENTIFYING PREDICTORS FOR BEING OUT OF THE LABOUR FORCE

Logit model was used to identify the factors underlying labour force participation. The probability of a person being out of the labour force was modelled as a function of individual and household characteristics.

The data used for the analysis was from the 2014–15 National Aboriginal and Torres Strait Islander Social Survey. The sample comprised Aboriginal and Torres Strait Islander persons aged 15–64 years. Replicate weights were used to maintain the representativeness of the sample.

Average marginal effects are reported instead of coefficients, as they are easy to interpret. The average marginal effect measures the change in the probability of a person being out of the labour force when the value of an independent variable changes by a unit. For example, if the value given for sex is 1 when female and 0 when male, the average marginal effect associated with sex is computed as follows:

1. Treat the person as though they were female, regardless of what the person’s sex actually is. Leave the value of all the other independent variables as they are (see Table 1.1 below for the full list of variables included in the modelling).

2. Compute the probability that this person (if she were female) would be out of the labour force.

3. Repeat steps 1 and 2 but this time as if the person were male.

4. Take the difference between the two predicted probabilities. The difference just computed is the marginal effect for one individual.

5. Repeat steps 1, 2 and 3 for everyone in the sample.

6. Compute the average of all the marginal effects.

Average marginal effects are expressed as a value between 0 and 1. A negative average marginal effect means the probability of being out of the labour force falls as the value of the variable increases. A positive average marginal effect means the probability of not being in the labour force rises as the value of the variable increases. In this example, the positive average marginal effect for sex is 0.149, which means the probability of being out of the labour force is higher for females than males. For the sake of interpretation, the estimated value of the average marginal effect (0.149) should be multiplied by 100 (0.149*100) and expressed in percentage points (15 percentage points).

Given that our model included more than one predictor variable, when we interpret the marginal effect associated with sex, we assume that two randomly chosen individuals in the sample have the same characteristics (as represented by the variables included in the model) except one of them is male and the other is female. Then we say ‘For the same age, social marital status, level of education, long-term health condition, disability status, etc, females are on average 15 percentage points more likely than males to be out of the labour force’. For the sake of brevity, we can also say ‘Females are 15 percentage points more likely than males to be out of the labour force’. The marginal effects associated with the other predictor variables should be interpreted in a similar way.

VARIABLES USED FOR IDENTIFYING PREDICTORS FOR BEING OUT OF THE LABOUR FORCE

The following table indicates which variables were used when estimating average marginal effects.

Table 1.1 Variables used for identifying predictors for not being in the labour force

 Variable Categories Labour force status 1 0 Not in the labour force (reference) In the labour force Sex 1 0 Female (reference) Male Age Continuous variable taking values in the range of 15 to 64 years Age squared Continuous variable Remoteness 1 0 Lives in remote area (reference) Lives in non-remote area Social marital status 1 0 Not living in a couple relationship (reference) Living in a couple relationship Dependent children 1 0 Lives in a family with dependent child/ren (reference) Lives in a family with no dependent child/ren Household size Continuous variable taking values in the range of 1 to 10(a) Main language spoken at home 1 0 An Australian Indigenous language (reference) English Lives on homelands 1 0 Lives on homelands/traditional country (reference) Does not live on or does not recognise homelands/traditional country Participation in cultural activities 1 0 Did not participate in selected cultural activities in last 12 months(b) (reference) Participated in selected cultural activities Involved in cultural events 1 0 Involved in selected events, ceremonies or organisations in last 12 months(c) (reference) Not involved in selected events, ceremonies or organisations Diagnosed with long-term health condition 1 0 Diagnosed with a long-term health condition (reference) Not diagnosed with a long-term health condition Disability status 1 0 Has profound/severe/moderate/mild core activity limitation or a schooling/employment restriction (reference) Has no specific limitation or disability Social contact 1 0 Participated in selected sporting, social or community activities (reference) Did not participate in selected sporting, social or community activities Carer 1 0 Did not care for a person with disability, long-term health condition or old age in last four weeks (reference) Cared for a person with disability, long-term health condition or old age Social support 1 0 Able to get support in time of crisis from outside household (reference) Not able to get support Unfair treatment 1 0 Has not had unfair treatment in last 12 months because Aboriginal and/or Torres Strait Islander (reference) Has had unfair treatment Transportation 1 0 Can't get to/sometimes or often have difficulty getting to places needed (reference) Can easily get to places needed Household financial resources 1 2 3 Household members could raise \$2,000 in an emergency in a week (reference) Household members could not raise \$2,000 in a week Not known if could raise \$2,000 in a week Incarceration 1 0 Has been incarcerated in lifetime (reference) Has never been incarcerated Education level(d) 1 2 3 4 5 Year 12 (reference) Year 9 or below Year 10 or 11 Advanced diploma/diploma/Certificate III/IV Bachelor degree or higher Studying 1 0 Not currently studying (reference) Currently studying

(a) The value 10 represents a household size of 10 or more people. (b) Includes fished, hunted, gathered wild plants/berries, made Aboriginal and/or Torres Strait Islander arts or crafts, performed any Aboriginal and/or Torres Strait Islander music, dance or theatre, and written or told any Aboriginal and/or Torres Strait Islander stories. (c) Includes funerals/sorry business, NAIDOC week activities, sports carnivals (excluding NAIDOC week activities), and festivals or carnivals involving arts, crafts, music or dance (excluding NAIDOC week activities). (d) Highest level of educational attainment.

RESULTS OF MODELLING

The following tables provide the average marginal effects and percentage point differences for all people aged 15–64 years (Table 1.2), by sex (Table 1.3) and by remoteness (Table 1.4).

Table 1.2 shows the average marginal effect associated with remoteness is not statistically significant. This implies that living in a non-remote or remote area is not significantly associated with labour force participation (based on the characteristics included in the model). From a methodological perspective, it makes little sense to then split the sample into non-remote and remote areas. However, from a policy perspective, we are not only interested in the effect of remoteness by itself. We are also interested in identifying the factors underlying not being in the labour force within non-remote and remote areas, and in whether the importance of those factors varies by remoteness. For this reason, we have split the sample into non-remote and remote and run separate regressions, the results of which are in Table 1.4.

Table 1.2 Predictors for not being in the labour force, Aboriginal and Torres Strait Islander persons aged 15–64 years

 Total persons Variable Average marginal effect Percentage point difference Standard error Sex 0.149(a) 14.9(a) 0.021 Age 0.001 0.1 0.001 Remoteness 0.022 2.2 0.025 Social marital status 0.109(a) 10.9(a) 0.022 Dependent children 0.043 4.3 0.028 Household size 0.012 1.2 0.008 Main language spoken at home 0.048 4.8 0.031 Lives on homelands 0.023 2.3 0.021 Participation in cultural activities 0.023 2.3 0.024 Involved in cultural events -0.026 -2.6 0.026 Diagnosed with long-term health condition 0.040 4.0 0.024 Disability status 0.174(a) 17.4(a) 0.026 Social contact 0.079 7.9 0.063 Carer 0.038 3.8 0.022 Social support -0.032 -3.2 0.040 Unfair treatment 0.047(a) 4.7(a) 0.021 Transportation 0.070(a) 7.0(a) 0.025 Household financial resources Could not raise \$2,000 in a week 0.124(a) 12.4(a) 0.025 Unsure if could raise \$2,000 in a week 0.113(a) 11.3(a) 0.051 Incarceration 0.157(a) 15.7(a) 0.037 Education level(b) Year 9 or below 0.138(a) 13.8(a) 0.038 Year 10 or 11 0.081(a) 8.1(a) 0.038 Advanced diploma/diploma/Certificate III/IV -0.071(a) -7.1(a) 0.035 Bachelor degree or higher -0.181(a) -18.1(a) 0.050 Studying 0.017 1.7 0.031 Number of observations 4 620
(a) Statistically significant at the 5% level. (b) Highest level of educational attainment.

Table 1.3 Predictors for not being in the labour force by sex, Aboriginal and Torres Strait Islander persons aged 15–64 years

 Males Females Variable Average marginal effect Percentage point difference Standard error Average marginal effect Percentage point difference Standard error Age 0.002 0.2 0.002 0.001 0.1 0.001 Remoteness 0.065 6.5 0.035 -0.022 -2.2 0.032 Social marital status 0.168(a) 16.8(a) 0.038 0.050 5.0 0.026 Dependent children -0.005 -0.5 0.041 0.105(a) 10.5(a) 0.038 Household size 0.013 1.3 0.014 0.012 1.2 0.009 Main language spoken at home 0.034 3.4 0.048 0.042 4.2 0.040 Lives on homelands -0.005 -0.5 0.032 0.030 3.0 0.029 Participation in cultural activities 0.041 4.1 0.036 0.005 0.5 0.030 Involved in cultural events -0.011 -1.1 0.041 -0.031 -3.1 0.033 Diagnosed with long-term health condition 0.038 3.8 0.034 0.038 3.8 0.028 Disability status 0.210(a) 21.0(a) 0.034 0.125(a) 12.5(a) 0.034 Social contact 0.140 14.0 0.098 -0.060 -6.0 0.095 Carer 0.020 2.0 0.034 0.043 4.3 0.030 Social support 0.003 0.3 0.053 -0.070 -7.0 0.059 Unfair treatment 0.047 4.7 0.028 0.041 4.1 0.029 Transportation 0.074(a) 7.4(a) 0.035 0.059 5.9 0.037 Household financial resources Could not raise \$2,000 in a week 0.094(a) 9.4(a) 0.031 0.144(a) 14.4(a) 0.031 Unsure if could raise \$2,000 in a week 0.112 11.2 0.058 0.087 8.7 0.066 Incarceration 0.110(a) 11.0(a) 0.038 0.306(a) 30.6(a) 0.073 Education level(b) Year 9 or below 0.057 5.7 0.055 0.177(a) 17.7(a) 0.050 Year 10 or 11 0.035 3.5 0.054 0.100(a) 10.0(a) 0.048 Advanced diploma/diploma/Certificate III/IV -0.075 -7.5 0.052 -0.073 -7.3 0.046 Bachelor degree or higher -0.213(a) -21.3(a) 0.090 -0.217(a) -21.7(a) 0.078 Studying -0.089 -8.9 0.048 0.080(a) 8.0(a) 0.040 Number of observations 1 968 2 652
(a) Statistically significant at the 5% level. (b) Highest level of educational attainment.

Table 1.4 Predictors for not being in the labour force by remoteness, Aboriginal and Torres Strait Islander persons aged 15–64 years
 Non-remote Remote Variable Average marginal effect Percentage point difference Standard error Average marginal effect Percentage point difference Standard error Sex 0.145(a) 14.5(a) 0.025 0.156(a) 15.6(a) 0.033 Age 0.002 0.2 0.001 -0.004 -0.4 0.002 Social marital status 0.127(a) 12.7(a) 0.028 0.048 4.8 0.030 Dependent children 0.050 5.0 0.038 -0.014 -1.4 0.034 Household size 0.016 1.6 0.013 0.007 0.7 0.008 Main language spoken at home -0.005 -0.5 0.066 0.092(a) 9.2(a) 0.035 Lives on homelands 0.038 3.8 0.027 -0.029 -2.9 0.034 Participation in cultural activities 0.012 1.2 0.028 0.081(a) 8.1(a) 0.034 Involved in cultural events -0.023 -2.3 0.029 -0.031 -3.1 0.043 Diagnosed with long-term health condition 0.046 4.6 0.030 0.023 2.3 0.034 Disability status 0.163(a) 16.3(a) 0.027 0.148(a) 14.8(a) 0.039 Social contact 0.112 11.2 0.079 -0.087 -8.7 0.114 Carer 0.022 2.2 0.027 0.082(a) 8.2(a) 0.035 Social support -0.044 -4.4 0.049 0.014 1.4 0.053 Unfair treatment 0.053(a) 5.3(a) 0.025 0.014 1.4 0.034 Transportation 0.076(a) 7.6(a) 0.031 0.056 5.6 0.037 Household financial resources Could not raise \$2,000 in a week 0.117(a) 11.7(a) 0.029 0.129(a) 12.9(a) 0.035 Unsure if could raise \$2,000 in a week 0.103 10.3 0.056 0.112 11.2 0.080 Incarceration 0.152(a) 15.2(a) 0.047 0.126(a) 12.6(a) 0.046 Education level(b) Year 9 or below 0.094(a) 9.4(a) 0.045 0.213(a) 21.3(a) 0.051 Year 10 or 11 0.062 6.2 0.045 0.109(a) 10.9(a) 0.051 Advanced diploma/diploma/Certificate III/IV -0.075 -7.5 0.044 -0.069 -6.9 0.053 Bachelor degree or higher -0.226(a) -22.6(a) 0.072 -0.130 -13.0 0.137 Studying 0.020 2.0 0.038 -0.006 -0.6 0.048 Number of observations 2 739 1 881
(a) Statistically significant at the 5% level. (b) Highest level of educational attainment.