Unemployment, Participation and Family Incomes in the 1980s*

Microsimulation methods are used to estimate the impact of changing Australian participation and unemployment rates on the level and distribution of family disposable incomes between 1981‐82 and 1988‐89. Between 1983‐84 and 1988‐89 a fall in unemployment and an increase in the labour force participation of married women both led to significant increases in family disposable incomes Whilst the inequality increasing effect of the recession in the early 1980s was thus partly reversed, intra‐family employment patterns suggest that the increased incomes due to participation increases largely bypassed those married couples at the bottom end of the income distribution.