Employment is a key form of economic and social participation. Indeed, it is the main way in which individuals participate in, and contribute to society1. Employment has a direct influence on financial security at both the individual and societal levels: while income is important for financial wellbeing, employment is also central to sustaining the economy.
Through taxes and economic production, the employed proportion of the labour force contributes financially to the national economy. Recent estimates suggest that the number of working age people supporting each person 65 years or older will decrease from a current 4.5 people to 2.7 by 2054-552. It is important that as many working age people in the Australian population are employed as possible, as it is important for sustaining the economy and for supporting the costs of an ageing population.
Who is more likely to participate in the labour force?
According to statistics from the Australian Bureau of Statistics (ABS) Labour Force Survey, there has been an increase in the overall rate of labour force participation from 2001 to 2013 of 1.6%, although that increase does not apply to young people aged 15-24 years, possibly reflecting that young people are staying in school and further education for longer.
Analysis of 2013 data from the Household, Income and Labour Dynamics Survey (HILDA) revealed higher levels of psychological distress were associated with poorer labour force outcomes. Particularly, individuals with high and very high levels of psychological distress were less likely to be participating in the labour force, and more likely to be unemployed or underemployed, compared to people with low psychological distress levels.
Similarly, people with a disability had significantly lower odds of being in the labour force and higher odds of being unemployed compared to people without a disability (according to the analysis of HILDA data).
Compared to their non-Indigenous counterparts, Indigenous people had significantly lower odds of participating in the labour force and significantly higher odds of being unemployed. The probability of an Indigenous person participating in the labour force was 59% compared to 67% for non-Indigenous people. Further, the probability of being unemployed was 12% for an Indigenous person, compared to 5% for a non-Indigenous person.
People living in areas of higher socio-economic disadvantage show poorer labour force outcomes. Compared to people living in areas of median disadvantage, people living in the most disadvantaged areas had lower odds of participating in the labour force, and higher odds of being unemployed and underemployed. In contrast, people living in areas of least socio-economic disadvantage were more likely to be participating in the labour force and less likely to be underemployed compared to people living in median disadvantage.
People living in remote areas had lower odds of being underemployed compared to people living in major cities, with people living in remote areas having an 8% chance of being underemployed, compared to 15% in major cities.
Young People Not Engaged in Employment, Education, or Training (NEET)
In Australia, data from the ABS show that around one in fifteen 15 to 19 year olds and one in eight 20 to 24 year olds were not engaged in education, employment or training in 2006 and 2011.
Caring responsibilities can significantly affect young people’s participation in work and education. According to ABS data, in 2006 and 2011 around one in five 15 to 19 year olds, and two in five 20 to 24 year olds who were not engaged in employment, education, or training were caring for children and/or someone with a disability. There were substantial differences between genders, with a higher proportion of females than males reporting caring duties in all age groups. Caring provides an important social and economic contribution to society, however, given their young ages, it is important that these young people’s low levels of educational attainment and lack of employment experience do not preclude or limit them from future economic participation.
As we have seen in other domains, young people with a very high level of psychological distress fare worse than those with a low level of psychological distress and were more likely to be disengaged (according to our analysis of 2013 HILDA data).
Young people with a disability had a significantly higher chance of being disengaged compared to young people with no disability – a full 10 percentage points higher.
In addition, our analysis of HILDA data showed that while remoteness was not associated with significant differences in the likelihood of being disengaged, areas of relative socio-economic disadvantage were. Indigenous young people also had a significantly higher likelihood of being disengaged than their non-Indigenous counterparts. The probability of being disengaged was 19% for Indigenous young people compared to 6% for non-Indigenous young people.
Finally, when we looked at the odds of spending 12 months or more searching for work, we saw that age, sex, psychological distress, socio-economic status, Indigenous status and remoteness had no bearing on the results. Only disability status was associated with different odds, with people with an estimated 22% of young people with a disability spending at least 12 months searching for work compared to 10% of people with no disability.
Employment outcomes for the population overall are improving. Two-thirds of the labour force are employed full time and just under 30% are employed part-time. However, underemployment is on the rise.
Employment outcomes are poorer for some groups in the population including Indigenous people, people with a disability, and young people.
- ROGERS, P., STEVENS, K. & HOUGH, G. 2008. Economic and social participation. Evaluation of the Stronger Families and Communities Strategy 2000 - 2004. RMIT.
- COMMONWEALTH OF AUSTRALIA 2015a. 2015 Intergenerational report: Australia in 2055. Canberra: Australian Government.