RDP 2007-05: Labour Force Participation and Household Debt Appendix A: Variable Definitions and Descriptive Statistics

Rochelle Belkar, Lynne Cockerell and Rebecca Edwards

June 2007

Table A1: Variable Definitions
Variable Description
Labour force participation Equal to 1 if participating in the labour force – i.e., working or unemployed – and equal to 0 if not in the labour force
Household income (excluding individual labour income) Annual gross household income excluding the individual's labour income but including the partner's (and other family members') labour income. It is not used separately in any estimation but is used as the denominator in the owner-occupied mortgage debt-to-income, the other debt-to-income and the debt-servicing ratios.
Owner-occupied mortgage debt outstanding Sum of all outstanding debt on owner-occupied home – imputed value for the cross-section but reported values for the panel
Owner-occupied mortgage debt-to-income Ratio of owner-occupied mortgages outstanding to household income (excluding individual labour income). Set equal to 0 if there is no owner-occupied mortgage debt outstanding and to the level of debt if household income (excluding individual labour income) is 0.
Other debt outstanding Sum of imputed other property, total credit card, HECS (Higher Education Contribution Scheme – a loan for higher education repayable contingent on income) and other household debts
Other debt-to-income Ratio of other debt outstanding to household income (excluding individual labour income). Set equal to 0 if there is no other debt outstanding and to the level of debt if household income (excluding individual labour income) isO.
Debt-servicing ratio Annual actual repayments on first and second owner-occupied mortgages divided by the household income (excluding individual labour income). Note that actual repayments can be in excess of required repayments. Set equal to 0 if there is no outstanding owner-occupied mortgage debt and to the repayment if household income (excluding individual labour income) is 0.
Value of owner-occupied home Self-reported value of the owner-occupied home
Non-financial assets Sum of imputed home value, other property values, vehicles and collectibles
Financial assets Sum of imputed equity and cash investments, trust funds and household bank accounts
Investment income Imputed financial year income from investments
Other income The annual sum of private pension (superannuation and worker's compensation) and foreign income, other household income (total gross household income less personal gross income), and private transfers (child support and other regular private income).
Family Tax Benefit A Imputed annual amount of Family Tax Benefit A that would be received by the household assuming no labour income was received by the individual
Family Tax Benefit B Imputed annual amount of Family Tax Benefit B that would be received by the household assuming no labour income was received by the individual
Age Age previous birthday as at June 30
Age2 Age squared
Years in the labour force The sum of years spent in paid work and looking for work
Years in the labour force2 Years in the labour force squared
Years not in the labour force The number of years spent not working and not looking for work
Years not in the labour force2 Years not in the labour force squared
University educated Equal to 1 if has a postgraduate degree, graduate diploma or certificate, or bachelor degree, 0 otherwise
Has a diploma Equal to 1 if has an advanced diploma or certificates, 0 otherwise
High school qualification Equal to 1 if high school is highest qualification, 0 otherwise
Did not finish Year 12 Equal to 1 if has not completed Year 12, 0 otherwise
Married or de facto Equal to 1 if married or de facto, 0 otherwise
Single Equal to 1 if single, widowed, divorced or separated, 0 otherwise
Spouse's labour force status Equal to 1 if spouse is participating in the labour force, 0 otherwise
Has child aged 0–4 years Equal to 1 if has one or more own resident children aged 0–4 years, 0 otherwise
Has child aged 5–14 years Equal to 1 if has one or more own resident children aged 5–14 years, 0 otherwise
Has child aged 15–24 years Equal to 1 if has one or more own resident children aged 15–24 years, 0 otherwise
Has child aged 25 years or older Equal to 1 if has one or more own resident children aged 25 years or older, 0 otherwise
Has children aged 0–4 and 5–14 years Equal to 1 if has one or more own resident children 0–4 years and one or more own resident children 5–14 years, 0 otherwise
Has health condition Equal to 1 if long-term health conditions or a disability limit the type or amount of work, 0 otherwise
Speaks English well Equal to 1 if English is spoken at home or if it is spoken well or very well (self-reported), 0 otherwise
Australian born Equal to 1 if born in Australia, 0 otherwise
Born in an English-speaking country Equal to 1 if born in Canada, Ireland, New Zealand, South Africa, United Kingdom or United States of America, 0 otherwise
Born in a non-English-speaking country Equal to 1 if born in another country, 0 otherwise
Resides in a capital city Equal to 1 if resides in a capital city (excluding Hobart and Darwin) or the Australian Capital Territory, 0 otherwise
Resides in a major city Equal to 1 if resides in a major or inner regional city other than a capital (including Hobart and Darwin), 0 otherwise
Resides in a rural area Equal to 1 if resides in a regional or remote area, 0 otherwise
Table A2: Sample Summary Statistics – Women
Cross-section 2002;
2,999 observations		 Panel 2001–2005;
13,672 observations
Mean Std dev Mean Std dev
Labour force participation 0.72 0.45 0.73 0.45
Owner-occupied mortgage debt outstanding ($m) 0.06 0.09 0.07 0.11
Owner-occupied mortgage debt-to-income 1,538.37 16,053.02 2,199.02 21,095.90
Debt-servicing ratio 168.57 1,640.33 212.62 1,937.60
Other debt outstanding ($m) 0.03 0.08    
Other debt-to-income 528.16 9,204.50    
Value of owner-occupied home ($m) 0.21 0.25 0.25 0.29
Non-financial assets ($m) 0.29 0.43    
Financial assets ($m) 0.05 0.24    
Investment income ($'000) 0.81 7.16 1.07 7.87
Other income ($'000) 45.83 47.39 47.69 49.13
Family Tax Benefit A ($'000) 2.80 3.68 3.01 3.92
Family Tax Benefit B ($'000) 1.20 1.12 1.30 1.18
Age 37.71 7.14 38.63 7.26
Years in the labour force 15.29 7.85 16.02 7.99
Years not in the labour force 5.79 6.42 5.89 6.52
University educated 0.26 0.44 0.27 0.44
Has a diploma 0.24 0.43 0.25 0.43
High school qualification 0.17 0.37 0.16 0.37
Did not finish Year 12 0.33 0.47 0.32 0.47
Married or de facto 0.73 0.44 0.73 0.44
Spouse's labour force status 0.62 0.48 0.63 0.48
Has child aged 0–4 years 0.24 0.43 0.24 0.43
Has child aged 5–14 years 0.45 0.50 0.45 0.50
Has child aged 15–24 years 0.23 0.42 0.24 0.43
Has child aged 25 years or older 0.01 0.10 0.01 0.12
Has children aged 0–4 and 5–14 years 0.13 0.33 0.12 0.33
Has health condition 0.11 0.31 0.13 0.33
Speaks English well 0.98 0.14 0.98 0.12
Australian born 0.77 0.42 0.78 0.42
Born in an English-speaking country 0.09 0.29 0.09 0.29
Born in a non-English-speaking country 0.14 0.34 0.13 0.34
Resides in a capital city 0.60 0.49 0.60 0.49
Resides in a major city 0.27 0.44 0.28 0.45
Resides in a rural area 0.12 0.33 0.12 0.33
Table A3: Sample Summary Statistics – Men
Cross-section 2002;
2,568 observations		 Panel 2001–2005;
11,374 observations
Mean Sth dev Mean Sth dev
Labour force participation 0.92 0.27 0.92 0.27
Owner-occupied mortgage debt outstanding ($m) 0.06 0.09 0.07 0.12
Owner-occupied mortgage debt-to-income 2,272.33 18,611.35 3,713.43 28,690.10
Debt-servicing ratio 259.77 1,898.73 352.88 2,573.39
Other debt outstanding ($m) 0.03 0.09    
Other debt-to-income 1,411.24 15,497.29    
Value of owner-occupied home ($m) 0.20 0.24 0.24 0.27
Non-financial assets ($m) 0.28 0.41    
Financial assets ($m) 0.04 0.18    
Investment income ($'000) 1.22 8.34 1.83 14.27
Other income ($'000) 26.62 28.18 27.25 29.40
Family Tax Benefit A ($'000) 2.12 3.32 2.30 3.53
Family Tax Benefit B ($'000) 0.98 1.12 1.09 1.20
Age 37.75 7.19 38.75 7.26
Years in the labour force 19.63 7.92 20.51 7.98
Years not in the labour force 1.40 3.04 1.46 3.12
University educated 0.25 0.43 0.26 0.44
Has a diploma 0.40 0.49 0.41 0.49
High school qualification 0.11 0.32 0.11 0.31
Did not finish Year 12 0.24 0.42 0.22 0.42
Married or de facto 0.71 0.45 0.73 0.44
Spouse's labour force status 0.50 0.50 0.52 0.50
Has child aged 0–4 years 0.22 0.41 0.22 0.42
Has child aged 5–14 years 0.33 0.47 0.34 0.47
Has child aged 15–24 years 0.15 0.36 0.16 0.36
Has child aged 25 years or older 0.00 0.06 0.01 0.07
Has children aged 0–4 years and 5–14 0.09 0.29 0.09 0.29
Has health condition 0.11 0.32 0.13 0.34
Speaks English well 0.99 0.12 0.99 0.10
Australian born 0.78 0.42 0.78 0.41
Born in an English-speaking country 0.11 0.31 0.11 0.31
Born in a non-English-speaking country 0.12 0.32 0.11 0.31
Resides in a capital city 0.60 0.49 0.60 0.49
Resides in a major city 0.28 0.45 0.28 0.45
Resides in a rural area 0.12 0.33 0.12 0.33