Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
ABS @ Facebook ABS @ Twitter ABS RSS ABS Email notification service
4102.0 - Australian Social Trends, 1994  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/05/1994   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product  
Contents >> Work >> Unemployment - Long-term unemployment

Underutilised labour: Long-term unemployment

Along with rising unemployment rates in the last 20 years, there has been a coinciding rise in the long-term unemployed. Older men have been particularly affected by this trend.

The continued existence of long-term unemployment and the difficulty experienced by the long-term unemployed in obtaining employment have significant economic and social consequences. The lower escape rate from unemployment of the long-term unemployed can result from a loss of skills and on-the-job training, a reduced intensity of job search, and a reluctance by employers to hire the long-term unemployed
1.

Long-term unemployment in Australia reached an unprecedented peak of 366,000 persons in March 1993, representing 38% of the unemployed and 4% of the labour force. The previous peak of 231,000 persons (31% of total unemployment) occurred in February 1984.


Unemployment

The
unemployed are persons aged 15 years and over who were without work during the reference week, but were currently available for work, and actively looking for work. The long-term unemployed are persons who have been unemployed for 52 weeks or more. The definition excludes discouraged jobseekers and others marginally attached to the labour force. As a result, statistics of long-term unemployment may understate the severity of the problem for persons who experience prolonged periods without employment. The (long-term) unemployment rate is the number of (long-term) unemployed in any group expressed as a percentage of the labour force in that same group. The incidence of long-term unemployment is the proportion of unemployed persons who are long-term unemployed.



Trends in unemployment

Between 1966 and 1972 the unemployment rate averaged less than 2%. This was followed by a period of rapid and sustained increases in unemployment between 1973 and 1981, when the unemployment rate rose from 2% to 6%. The prolonged unemployment growth over this period saw long-term unemployment emerge as a new and permanent feature of the Australian labour market. Between August 1973 and August 1981, the number of long-term unemployed increased from 4,000 to 80,000 and the incidence of long-term unemployment increased from 4% to 21%.


The severe labour market downturn of 1982-83 worsened the unemployment situation. Initially, the incidence of long-term unemployment fell as rising inflows to unemployment increased the proportion of short-term unemployed. However, by August 1983, the incidence of long-term unemployment had risen to 28% as previous inflows moved into long-term unemployment, and the inflow to unemployment slowed. Between August 1982 and August 1983, the number of long-term unemployed more than doubled, from 88,000 to 189,000.


The economic recovery in the second half of 1983 was the beginning of a long period of strong employment growth. Employment grew by almost 1.6 million between August 1983 and August 1990, representing an average annual growth rate of 3%. In spite of this strong employment growth, long-term unemployment, and to a lesser extent total unemployment, continued at high levels until 1988. Between August 1983 and August 1988, employment grew by 1.1 million, yet the number of long-term unemployed fell by only 36,000 to 153,000.


Women, particularly those aged 35-44 years, benefited most from the strong employment growth. The labour force participation rate of women in this age group rose from 57% to 71% between August 1983 and August 1990 and the number employed increased by 337,000 (62%). This represented 22% of the total employment growth in the period. However, much of the employment growth was in part-time and casual work (see
Trends in part-time work).

Between August 1989 and August 1993, the number of long-term unemployed more than trebled, from 108,000 to 334,500, and peaked at 366,000 in March 1993. In contrast to the rapid recovery after the 1982-83 recession, unemployment remained virtually unchanged over the two years following the trough of the 1990-91 recession.

UNEMPLOYMENT AND LONG-TERM UNEMPLOYMENT RATES



Source: Labour Force Survey.

INCIDENCE OF LONG-TERM UNEMPLOYMENT



Source: Labour Force Survey.


International comparison
In 1991, Australia's long-term unemployment rate (2%) and incidence of long-term unemployment (25%) were in the mid-range relative to the selected countries and were comparable to those of New Zealand and the United Kingdom. Australia's position relative to other countries has not changed much since 1979 as the long-term unemployment rate and the incidence of long-term unemployment increased in most countries between 1979 and 1991.

Caution should be exercised when making international comparisons of statistics of long-term unemployment due to the differences that exist in the methodology of collection, concepts, definitions, coverage etc. For example, statistics for Greece and Italy are based on persons aged 14 years and over; for Australia, Canada, France, Japan and New Zealand on persons aged 15 years and over; for USA on persons aged 16 years and over; for Sweden on persons aged 16-64 years; and for UK on males aged 16-69 years and females aged 16-64 years.
SELECTED OECD COUNTRIES, 1991

Unemployment rate
Long-term unemployment rate
Long-term unemployment incidence
Country
%
%
%

Australia
9.6
2.4
24.9
Canada
10.3
0.7
7.2
France
9.4
3.5
37.2
Greece
8.2
3.9
47.0
Italy
11.0
7.4
67.1
Japan
2.1
0.4
17.9
NZ
10.3
2.2
21.3
Sweden
2.7
0.1
4.6
UK
8.3
2.3
28.1
USA
6.7
0.4
6.3

Source: OECD Employment Outlook, July 1993


Age and sex

In August 1993, 67% of the long-term unemployed were male, compared to their labour force share of 58%. Men had both a higher long-term unemployment rate (4%) and incidence of long-term unemployment (39%) than women (3% and 32% respectively).


Long-term unemployment has been consistently higher for men than for women since August 1983. The difference between them increased in the two years following the 1982-83 recession, and again in the two years following the 1990-91 recession. This is due in part to women being more likely than men to leave the labour force if experiencing unemployment. In addition part-time employment, which is mainly female, was largely unaffected by the recession. As a result, the incidence of female long-term unemployment is generally lower than that of men.


A major difference in the age distributions of male and female long-term unemployed is the over-representation of older men. Those aged 55 years and over accounted for 16% of all long-term unemployed men, compared to their labour force share of 10%. The difference between the long-term unemployment rates of men and women was smallest for those aged 15-19 years and 35-44 years. In contrast, the long-term unemployment rate of men aged 55-64 years was considerably higher than of women of the same age, mainly reflecting the low labour force participation rate of older women.


The high incidence of long-term unemployment observed among older men largely reflects their relatively strong labour force attachment combined with a possible skills mismatch as a result of industry restructuring, and the diminishing number of employment opportunities available to them. As a result, once they become unemployed, the likelihood of them being unemployed long-term is substantial.

AGE AND SEX DISTRIBUTION OF UNEMPLOYMENT, AUGUST 1993

Males
Females


Unemployment rate
Long-term unemployment rate
Long-term unemployment incidence
Unemployment rate
Long-term unemployment rate
Long-term unemployment incidence
Age group (years)
%
%
%
%
%
%

15-19
24.0
4.2*
17.5*
21.9
3.6*
16.6*
20-24
18.1
6.3
35.0
13.7
5.2
37.8
25-34
11.0
4.2
38.0
9.1
2.6
28.8
35-44
7.9
3.2
40.5
7.6
2.6
34.5
45-54
7.2
4.1
55.9
6.5
2.9
44.4
55-64
13.8
8.5*
61.2*
5.5*
2.4*
43.8*
65 & over
1.5*
0.7*
50.0*
* *
* *
* *
Total
11.4
4.5
39.5
9.8
3.1
31.8


Source: Labour Force Survey


Regional comparison

Significant regional differences exist in unemployment and long-term unemployment rates, partially reflecting differing economic structures and policy approaches to unemployment, the impact of seasonal employment, and concentrations of particular industries in certain areas
2.

In August 1993, Tasmania and Victoria had the highest long-term unemployment rates (both 5%). In contrast the Northern Territory and the Australian Capital Territory had long-term unemployment rates of less than 2%, well below the national average of 4%. The higher long-term unemployment figures recorded for Tasmania and Victoria can be attributed to the decline in economic growth in the manufacturing industry in those States during the late 1980s. The lower figure recorded for the Australian Capital Territory was related to the high proportion of public sector employment and to growth in the service industries, particularly finance. The Northern Territory's low figure is attributable to particularly high growth in the mining industry and sustained growth in wholesale and retail trade.

UNEMPLOYMENT, AUGUST 1993

Unemployment rate
Long-term unemployment rate
State/Territory
%
%

New South Wales
10.5
3.8
Victoria
12.2
5.2
Queensland
10.5
3.3
South Australia
10.0
4.0
Western Australia
9.0
2.6
Tasmania
13.2
5.4
Northern Territory
7.7
1.6
Australian Capital Territory
6.9
1.7
Australia
10.7
3.9


Source: Labour Force Survey


Birthplace

Birthplace is widely regarded as exercising an important influence on the likelihood of being employed. Differences between birthplace groups emerge for a number of reasons including discrimination, lack of familiarity with English as a spoken and written language, and lack of familiarity with Australian social
customs
2.

In August 1993, people born in non-English speaking countries had a much higher long-term unemployment rate (7%) than people born in Australia and people born in other main English speaking countries (both 3%). The long-term unemployment rates for migrants from Lebanon (20%) and Viet Nam (17%) were by far the highest of any country of birth group with a significant contribution to the Australian labour force. This would seem to be a result of the high proportions of refugee arrivals from these two countries
3.

The concentration of unemployed migrants in older age groups is a factor in their higher incidence of long-term unemployment (41% in August 1993 compared to 34% for people born in Australia). Over the last ten years, migrants born in non-English speaking countries have consistently had the highest long-term unemployment rates, while migrants born in main English speaking countries generally experienced similar long-term unemployment rates to people born in Australia.


Recently arrived migrants had much higher unemployment and long-term unemployment rates than longer-term residents, but these rates are likely to decrease as their period of residence increases. However, migrants who arrived since the onset of the 1990-91 recession, especially those born in non-English speaking countries, had extremely high unemployment and long-term unemployment rates in August 1993.

UNEMPLOYMENT AND THE OVERSEAS BORN, AUGUST 1993

Born in main English speaking countries(a)
Born in non-English speaking countries


Unemployment rate
Long-term
unemployment rate
Long-term unemployment incidence
Unemployment rate
Long-term
unemployment rate
Long-term unemployment incidence
Period of arrival
%
%
%
%
%
%

Before 1971
9.3
3.9
41.8
11.4
5.8
50.6
1971-80
7.9
1.7
21.4
13.8
5.6
40.8
1981-90
9.6
2.7
28.0
19.0
8.8
46.4
1991-August 1993
13.4
1.1
8.0
45.1
17.9
39.6
Total
9.2
2.9
31.3
16.0
7.3
45.6


(a) Comprises United Kingdom, Ireland, Canada, South Africa, USA and New Zealand.

Source: Labour Force Survey



Educational attainment

Higher levels of educational attainment are associated with lower unemployment and long-term unemployment rates. In February 1993, people who had not completed the highest level of secondary school had the highest unemployment rate (15%) and long-term unemployment rate (6%) of any other educational attainment group. In comparison, people with degrees or higher qualifications had by far the lowest unemployment rate (6%) and long-term unemployment rate (2%).


Between 1984 and 1990, the number of long-term unemployed people with post-school qualifications remained fairly steady, ranging between 31,000 and 49,000 while the number without post-school qualifications declined from 182,000 to 89,000. This does not imply, however, that people without qualifications were more likely to find work (or to leave the labour force) than those with qualifications. Rather the change coincided with a general increase in levels of educational attainment. People may therefore have obtained qualifications and found jobs.


More recently, long-term unemployment has affected those with post-school qualifications more severely than those without. The number of long-term unemployed without post-school qualifications almost trebled between February 1990 and February 1993, while the number with post-school qualifications quadrupled.

LONG-TERM UNEMPLOYED PERSONS AND EDUCATIONAL ATTAINMENT



Source: Survey of Labour Force Status and Educational Attainment



Family structure

76% of the long-term unemployed in August 1993 were members of families. Of these, 38% were married with dependants, 22% were married without dependants and 6% were lone parents. The remaining 34% were other family members, mainly young adult children. This distribution has remained relatively constant over the last eight years.


Married people without dependants had the lowest unemployment rate (6%) and the lowest long-term unemployment rate (3%) of any family status group. Lone parents had the highest long-term unemployment rate (7%), and the second highest unemployment rate (17%).


In August 1993, 506,000 family members, including 248,000 dependant children, were living with the 334,500 long-term unemployed family members.

FAMILY STATUS, AUGUST 1993

Unemployment rate
Long-term unemployment rate
Family status
%
%

Husband or wife
      with dependants
7.7
3.1
      no dependants
6.5
2.8
Lone parent
16.8
6.6
Other family member
17.2
5.3
Living alone
13.4
5.7
Not living alone
15.7
5.0
Total
10.7
3.9


Source: Labour Force Survey


Occupation

The preferred occupation of an unemployed person may reflect their skills, training, capabilities, or previous employment background. In July 1992, 52% of all unemployed persons had a preferred occupation, compared to 46% of the long-term unemployed. This difference may reflect an increased lack of specific or perceived skills among the long-term unemployed, but may also reflect disillusionment and a willingness to accept jobs in non-preferred fields. Of those long-term unemployed with a preferred occupation, 28% would have preferred to work as labourers and related workers, 19% as tradespersons, and 18% as salespersons and personal service workers. These occupations each represented 15% of employed persons in August 1992.



Endnotes

1 Chapman, B.J. (1993)
Long-Term Unemployment: the Dimensions of the Problem The Australian Economic Review: 2nd Quarter 1993.

2 Inglis, P.A. and Volker, P.A. (1985)
Unemployment in Australia - an Overview of Some Issues The Structure and Duration of Unemployment - Proceedings of a Conference, Bureau of Labour Market Research.

3 Iredale, R. and D'Arcy, B. (1992)
The Continuing Struggle: refugees in the Australian Labour Market Bureau of Immigration Research.



Previous PageNext Page

Bookmark and Share. Opens in a new window


Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.