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4102.0 - Australian Social Trends, 1997  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 19/06/1997   
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Contents >> Income & Expenditure >> Income Distribution: Youth income

Income Distribution: Youth income

Between 1985 and 1995 the proportion of young people with full-time jobs has fallen. The earnings of young employees compared to older workers have also declined.

Young people depend on their parents for shelter, and for financial and emotional support. However, the need for support changes as teenagers progress to adulthood and seek to establish their independence. The period of this transition can vary greatly among young people depending on their individual capacities and life opportunities.

Some young people enter the full-time labour force soon after leaving school and earn sufficient income to live independently. In 1995, 17% of 15-19 year olds had full-time jobs with average earnings of $300 per week. However, changing patterns of involvement in education and work between 1985 and 1995 have meant that the proportion of youth in full-time employment has been declining. The amount of money earned by youth has, in real terms, also declined.

YOUTH EMPLOYEES AND EARNINGS, AUGUST 1985 AND 1995

Proportion of youth employed
Youth average weekly earnings
Youth earnings as a proportion of adult earnings(a)



1985
1995
1985(b)
1995
1985
1995
Age and employment status
%
%
$
$
%
%

15-19 years
45.2
42.8
252
174
42.1
29.6
    Full time
31.5
16.6
320
300
48.4
44.6
    Part time
13.7
26.2
97
95
33.3
34.4
20-24 years
66.8
68.7
485
423
81.0
71.9
    Full time
59.7
53.3
511
487
77.3
72.5
    Part time
7.1
15.4
259
203
88.7
73.6

(a) Adult earnings were the earnings of employees aged 25 or over.
(b) 1985 earnings adjusted to 1995 dollars using the CPI weighted average over the eight capital cities.

Source: Weekly Earnings of Employees (Distribution), Australia (unpublished data), Labour Force Survey (unpublished data).


Youth

Youth are defined in this review as all people aged 15-24 years.

Income and earnings

Gross income is the sum of cash receipts from all sources that are of a regular and recurring nature, before tax or other deductions.

Wages and salaries are the gross cash income received from an employer or from own incorporated enterprise.

Government cash benefits are regular, recurring receipts from government to persons under social security and related government programmes.

Other sources (of income) include profit/loss to owners of, or partners in, unincorporated enterprises; interest, dividends, rent, royalties, workers compensation, and regular transfer payments from other households.

Average weekly earnings is the amount obtained by dividing the total weekly earnings before tax of a group by the number of employees in that group.


Trends in earnings from employment
Compared to the mid 1980s, rather than entering full-time employment, more young people have been completing high school studies to the end of Year 12 and then going on to TAFEs and universities to enhance their career prospects (see Education - national summary table). After leaving school many young people also combine studies with part-time work (see Australian Social Trends 1996, From school to work).

In the 10 years between 1985 and 1995, the proportion of youth aged 15-19 who were employed full time declined from 32% to 17%. Over the same period the proportion who were working part time nearly doubled, increasing from 14% in 1985 to 26% in 1995. The proportion of 20-24 year olds who were full-time employees also decreased from 60% to 53%. As with 15-19 year olds, part-time work has become more common for youth in the 20-24 year age group.

These trends explain much of the decline in the average weekly earnings of employed youth. In real terms (1985 earnings adjusted in value to 1995 dollars) the average weekly earnings of employees aged 15-19 fell from $252 per week to $174 per week and for those aged 20-24 from $485 to $423 per week.

However, the trend towards lower real earnings of young people has also been influenced by lower amounts of pay for both full-time and part-time workers. For example, the earnings of full-time employees aged 20-24 fell, in real terms, from an average of $511 per week in 1985 to $487 per week in 1995.

Youth earnings have also dropped when compared to the earnings of older people. Between 1985 and 1995, the average full-time weekly earnings of 15-19 year olds relative to the earnings of employees aged 25 and over fell from 48% to 45% and for those aged 20-24, from 77% to 72%.

Income distribution
Not all youth have income of their own. Some depend on others, usually parents or partners, for their livelihood. For those that do have income of their own, many receive this income not from employment but from government cash benefits.

In 1994-95, about one third of 15-19 year olds had no income. An additional one third had some low amount of income that was less than $100 per week. For older youth aged 20-24, the proportion with no income was much lower at 7%. An additional 9% had an income of less than $100 per week. In both age groups, the proportion of youth with no income was similar for men and for women.

By the time youth have reached their twenties, many have substantial weekly incomes. In 1994-95, over half of males aged 20-24 had an income of more than $400 per week. A smaller proportion of women (37%) had incomes of over $400 per week.

YOUTH INCOMES, 1994-95

15-19 years
20-24 years


Men
Women
Total
Men
Women
Total
All youth
Gross weekly income
%
%
%
%
%
%
%

Nil(a)
33.2
31.5
32.3
6.7
7.3
7.0
18.8
$1-99
29.4
36.7
32.9
8.0
10.2
9.1
20.1
$100-199
13.9
13.7
13.8
14.7
17.0
15.9
14.9
$200-299
13.8
12.1
13.0
6.0
11.8
8.8
10.8
$300-399
4.1
3.3*
3.7
13.0
17.1
15.0
9.8
$400-499
4.5
2.3*
3.4
21.5
17.6
19.6
12.1
$500 and over
1.1*
* *
0.8*
30.1
19.0
24.7
13.6
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
'000
'000
'000
'000
'000
'000
'000
Total
622.2
594.2
1,216.4
714.5
695.6
1,410.1
2,626.5
$
$
$
$
$
$
$
Average weekly gross income(b)
165.0
134.0
150
424.0
354.0
390
297

(a) Includes nil or negative income from all sources.
(b) Of young people with positive total income.

Source: 1994-95 Survey of Income and Housing Costs (unpublished data).


Sources of income
In 1994-95, most youth with any income obtained their income from paid employment. More than half (56%) of young people reported that their main source of income was from wages and salaries. However, one fifth of all youth were receiving government cash benefits as their main source of income. The wide disparities in youth income reflect differences in dependency status, differences in employment/student status and, associated with these, their different sources of income.

The proportion of young people who reported that their main source of income was from wages and salaries differed according to their participation in education. For those who were not studying or who were studying part time, income from employment was by far the main source. In comparison only 28% of those who were studying full time reported income from wages and salaries to be their main source of income. 39% of full-time students reported having no income at all. These are most likely to be supported by their parents. In 1994-95, 89% of all full-time students in private households lived with their parents.

The Australian Government provides a range of benefits to support individuals and families in need. Some payments made to families provide extra allowances for young people who continue to live at home as full-time secondary school students. However, other payments are made directly to young people themselves.

Some income support payments such as the Youth Training Allowance (for unemployed people age less than 18) are specifically targeted to young people, while student allowances (paid through the Austudy and Abstudy schemes) are by nature mostly paid to young people (or if they live at home and under the age of 18 to their parents). Young people may, however, also be eligible for a range of other payments provided by the Department of Social Security. In addition to the Newstart Allowance (for those aged 18 and over actively seeking work) such payments include the Sole Parent Pension and the Disability Support Pension.

While not necessarily their main source of income, almost a quarter (24%) of all 15-19 year olds received government cash benefits in 1994-95. Of these 65% (15% of all 15-19 year olds) received a study assistance payment making study assistance the main type of benefit received.

A similar proportion (24%) of 20-24 year olds received income from the government. Almost half of these were receiving benefits related to unemployment.

MAIN SOURCE OF INCOME FOR ALL YOUTH, 1994-95

Studying

Part-time
Full-time
Not studying
All youth
Main source
%
%
%
%

Wages and salaries
83.8
28.3
69.7
55.5
Government cash benefits
9.0
23.6
19.1
19.9
Other sources
4.8*
9.0
3.7
5.7
Nil(a)
2.5*
39.0
7.4
18.8
Total
100.0
100.0
100.0
100.0
'000
'000
'000
'000
Total
218.7
975.5
1,432.3
2,626.5
$
$
$
$
Average weekly income(b)
353.0
108.0
373
297

(a) Includes nil or negative income from all sources.
(b) Of young people with positive income.

Source: 1994-95 Survey of Income and Housing Costs (unpublished data).

GOVERNMENT CASH BENEFITS, 1994-95



Source: 1994-95 Survey of Income and Housing Costs (unpublished data).


Income support from family
Most 15-19 year olds are still at school and are dependent on their parents as they have little or no income of their own. Numerous other young people also receive support from their parents to supplement their income. This support might be provided in many different ways (e.g. gifts of money, food, clothing, motor vehicles or assistance with housing rents). This assistance may continue even when they leave home.

In 1992, 39% of 15-19 year olds who had left home received some form of income support from relatives living in another household. 20-24 year olds who had left home were less likely to receive income support from their family, with 28% receiving support. However, the likelihood of being given support differed according to the activity of the youth.

Among full-time students who had left home 65% of those aged 15-19 years, and 61% of those aged 20-24 years received income support from their parents. Many part-time students and unemployed youth living away from home also received some support from their parents.

INCOME SUPPORT FROM RELATIVES(a) FOR YOUTHS WHO DO NOT LIVE WITH THEIR PARENTS, 1992


    (a) Excluding spouses and de facto.
    (b) Some of these students may also be employed or unemployed.
    Source: Survey of Families in Australia (unpublished data).

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