Long-term unemployment impacts on communities both socially and economically. People who are unemployed long-term may have difficulty in gaining employment due to a number of factors including: a loss of confidence and motivation, a lack of recent work experience, or inappropriate skills. They may also perceive that there are high levels of competition for a limited number of opportunities. Compared to those who are unemployed for shorter periods of time, the long-term unemployed may also experience difficulty in overcoming the negative perceptions of some employers (Australian Bureau of Statistics, 2000). Long-term unemployment may also erode the social or work connections that people need to secure employment (Davidson, 2002).
Long-term unemployment is defined as a duration of unemployment of 12 months or more. Duration of employment is the length of the incomplete spell of unemployment of a currently unemployed person. The duration is calculated from the time a person either last worked in any job for two weeks or more, or began actively looking for work (whichever is the more recent). (end note 1) In September 2005, of those people aged 15 years or over, there were 94,000 considered to be long-term unemployed. Although these figures have fallen since the early 1990s to low levels they are still of importance. Long-term unemployment may be linked to an increased risk of poverty, as well as an associated burden on the welfare system (Ross, 2002).
This article provides a brief overview of some of the information available relating to long-term unemployment, including some of the characteristics of the long-term unemployed.
MEASURES OF LONG-TERM UNEMPLOYMENT
The long-term unemployment rate is the number of people who have been unemployed for one year or more, as a proportion of the labour force. From 1991 to 1999, this rate was above 2%, reaching a peak of 3.7% in mid-1993. In September 2004, the rate was 1.1%. From early 2005, the rates recorded have been the lowest in the past two decades, with a rate of 0.9% in September 2005.
The long-term unemployment rate generally mirrors the unemployment rate, fluctuating with the peaks and troughs of the economy. The last major peak in the rate of long-term unemployment occurred in 1993, soon after the economic downturn of 1990-91.
1. Unemployment and long-term unemployment rates, Proportion of labour force: Trend
In September 2005 the long-term unemployed represented 18% of all unemployed people. This ratio decreased from 20% in September 2004, when there were 114,500 long-term unemployed, representing one-fifth of all unemployed people.
2. Long-term unemployed, Proportion of unemployed: Trend
Young people aged 15-24 years tend to experience higher rates of unemployment but relatively low proportions of long-term unemployment. This is mostly due to the large inflow of school leavers into short term unemployment (Furlong and Kelly, 2005). Unemployed people aged 45 years or older are more likely to be long-term unemployed. As shown in graph 3, 42% of unemployed people aged 55-64 years had been unemployed for one year or more.
The higher incidence of long-term unemployment among older unemployed people may be explained by a number of factors, including lower mobility, lower education level, lower capacity for job-hunting, lower incidence of transferable skills and perhaps even age discrimination (Dubé, 2004). Due to their skills and experience, older people may also be more selective about employment, therefore increasing their length of unemployment (Dubé, 2004). Older workers are also more likely to voluntarily withdraw from the labour force entirely through early retirement.
3. Long-term unemployed, Proportion of unemployed - 2004
Men have higher rates of long-term unemployment than women. The differences in long-term unemployment for men and women are displayed in graph 4.
4. Long-term unemployed, Proportion of labour force: Trend
In September 2005, men represented 59% of long-term unemployed people and women represented 41%. In March 1993 the difference was greater, with men representing 69% of long-term unemployed people and women 31% .
Structural adjustments in the economy, due to changes in technology and the reorganisation of workplaces, may lead to fewer work opportunities for people possessing limited qualifications. Employment prospects are influenced by a person's level of educational attainment, and unemployment rates tend to fall for both men and women as the levels of qualifications increase (Crooks et al, 1996). As shown in table 5, those with a highest level of attainment of Year 10 or below represented almost half (47%) of all long-term unemployed people. In comparison, those with the same level of attainment represented only 20% of all employed people.
5. LONG-TERM UNEMPLOYED AND EMPLOYED, Level of highest educational attainment(a) - 2004
Proportion of all long-term unemployed
Proportion of all employed persons
|Educational attainment |
|Bachelor Degree or above |
|Advanced Diploma/Diploma |
|Certificate III/IV |
|Certificate I/II(b) |
|Year 12 |
|Year 11 |
|Year 10 and below |
|(a) See endnote.2 (end note 2) |
|(b) Includes the category: certificate not further defined. |
|(c) Includes the categories: other education, level not determined and no educational attainment. |
|Job Search Experience, Australia, July 2004 (cat. no. 6222.0). |
Australian Bureau of Statistics 1994, Australia's long-term unemployed: A statistical profile (cat. no. 6255.0), Canberra.
Australian Bureau of Statistics 2000, 'Long-term unemployment', Australian Social Trends (cat. no. 4102.0), pp. 120-124, Canberra.
Crooks, ML, Webb, M, Forster, J & Williamson, J 1996, The Price We Pay: Young people, poverty and long-term unemployment in Australia, National Youth Affairs Research Scheme, Hobart.
Davidson, P 2002, The Obligation is Mutual: New Directions for Employment Assistance in Australia, ACOSS Paper 120, Australian Council of Social Service, Sydney.
Department of Treasury and Finance 2005, Long-Term Unemployment in Tasmania: A Statistical Analysis, Research Paper, June 2005, Economic Research Unit, Economic Policy Branch, Tasmania.
Dubé, V 2004, 'Sidelined in the labour market', Perspectives on labour and income, Summer 2004, Vol 16, No 2, pp. 25-31, Statistics Canada.
Furlong, A & Kelly, P 2005, 'The Brazilianisation of Youth Transitions in Australia and the UK?', Australian Journal of Social Issues, Winter 2005, Vol 40, No 2, pp. 207-225, Australian Council of Social Service, Sydney.
Ross, R 2002, 'Unemployment: A Multidimensional Problem', The Drawing Board: An Australian Review of Public Affairs, December 2002, School of Economics and Political Science, The University of Sydney.
1. The Duration of Unemployment calculation changed in April 2001 from 'period of time since an unemployed person last worked full-time for two weeks or more' to the definition outlined in the introduction. < Back
2. Level of Highest Educational Attainment can be derived from information on Highest Year of School Completed and Level of Highest Non-school Qualification. The derivation process determines which of the 'non-school' or 'school' attainments will be regarded as the highest. Usually the higher ranking attainment will be self-evident, but in some cases some Secondary Education, such as Year 12, is regarded, for the purposes of obtaining a single measure, as higher than some Certificate level attainments. For futher information regarding Level of Highest Educational Attainment refer to Education and Work, Australia, May 2005 (cat. no. 6227.0) Explanatory Notes paragraphs 24 to 26. < Back