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6105.0 - Australian Labour Market Statistics, Jul 2006  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 07/07/2006   
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LABOUR FORCE TRANSITIONS


INTRODUCTION

Throughout their lives people move between roles as students, parents, wage earners, householders and retirees. Many changes in role are accompanied by a change in labour force status, such as when a young person moves from full-time study into employment. Transitions between full-time employment, part-time employment, unemployment, not in the labour force, as well as moving between jobs, will be experienced to some extent by most people.


In 2005, the average annual unemployment rate for men and women aged 15-64 years was 5.0% and 5.3% respectively.(end note 1) While the unemployment rate overall may not change greatly from one month to the next, there is a reasonable amount of change in the labour force status of individuals between adjacent months. This article focuses on month to month transitions in labour force status (gross flows) (end note 2) of three groups of people: those aged 15-24 years, those aged 25-44 years and those aged 45-64 years. This article measures movements into and out of unemployment, full-time employment, part-time employment, and not in the labour force.



TRANSITIONS IN LABOUR FORCE STATUS

On average, in 2005, most people (91% of men and 89% of women) maintained the same labour force status from one month to the next, although a larger proportion of young people changed their status than older people. On average, men aged 15-24 (18%) were more likely to change their labour force status than those in the two older age groups (both 8%). Similarly, on average, a larger proportion of women aged 15-24 (18%) changed their labour force status than did older women (13% of those aged 25-44 and 11% of those aged 45-64).

1. Proportion of males changing labour force status, By age group - 2005
Graph: 1. Proportion of males changing labour force status, By age group—2005

2. Proportion of females changing labour force status,
By age group - 2005
Graph: 2. Proportion of females changing labour force status, By age group—2005



The rise in labour force transitions for young people aged 15-24 between November and March coincides with the end of one academic year and the start of another. The relatively high transition rate of younger people reflects the relatively high proportions taking short-term employment while studying, and their tendency to experience a variety of jobs before settling on a career path.


On average, in 2005, for men aged 15-64 years the most common labour force status to remain in from one month to the next was full-time employment (96%). Similarly full-time employment was the most common status for women aged 15-64 to remain in (90%), with women not in the labour force also tending to remain there (90%).



MOVING FROM UNEMPLOYMENT

People who were unemployed were more likely to change their labour force status than people in any other labour force status. Half of all women (50%) and 43% of all men aged 15-64 years moved from unemployment to either employment or being outside the labour force from one month to the next. A higher proportion (49%) of young men aged 15-24 moved from unemployment from one month to the next than older men (37%). This may reflect younger people being more likely to take casual jobs.(end note 3) For some young people, these jobs may provide short-term employment while they are studying.

3. Whether moved from unemployment, 2005

Males
Females
15-24
25-44
45-64
Total
15-24
25-44
45-64
Total

Entered(a)
Full-time employment %
10.6
16.6
10.1
12.7
6.3
8.7
5.7
7.2
Part-time employment %
14.1
9.9
8.1
11.2
17.3
16.6
14.2
16.4
Not in the labour force %
24.6
14.7
18.4
19.6
25.8
26.3
27.9
26.4
Stayed unemployed(a) %
50.8
58.8
63.4
56.5
50.7
48.3
52.2
50.0
Total %
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Total annual average unemployed '000
116.5
104.2
64.4
285.1
102.6
98.6
48.5
249.7

(a) Proportion of people who were unemployed in month 1 and had the specified labour force status in month 2, averaged across the year.
Labour Force, Australia, Detailed - Electronic Delivery, GM1 (cat. no. 6291.0.55.001).


More unemployed men aged 15-64 moved into employment (24%) from unemployment, than withdrew from the labour force (20%). For women in the same age range, slightly more withdrew from the labour force (26%) than moved to employment (24%). Some of these people may have temporarily withdrawn from the labour force because they were unavailable or not actively looking for work for a brief period or may have been discouraged from seeking work. Other people may move from being unemployed to not in the labour force for longer-term reasons (for example, undertaking study or retirement).


A greater proportion of unemployed young men aged 15-24 entered part-time employment (14%) than did 25-44 and 45-64 year old men (10% and 8% respectively). More men aged 25-44 gained full-time employment (17%) than did those aged 15-24 or 45-64 (11% and 10% respectively). Unemployed women aged 15-64 had a greater tendency to gain part-time work (16%) than full-time work (7%).


Over two-thirds (70%) of men and almost two-thirds (65%) of women aged 15-64 who had been unemployed long-term (52 weeks and over) remained unemployed from one month to the next. Smaller proportions of shorter-term (less than 52 weeks) unemployed people remained unemployed in the following month (53% of men and 47% of women). Many of the moves for long-term unemployed people are between unemployment and being not in the labour force, possibly reflecting discouragement about obtaining a job.



MOVING FROM FULL-TIME EMPLOYMENT

Over the past few decades, traditional full-time employment has declined relative to part-time employment. Between 1995 and 2005, the proportion of people aged 15-64 years working full-time declined from 75% to 71%, whereas the proportion of people working part-time increased from 25% to 29%. In 2005, the majority of both men (96%) and women (90%) who were employed full-time in one month remained in full-time employment in the next month.

4. Whether moved from full-time employment, 2005

Males
Females
15-24
25-44
45-64
Total
15-24
25-44
45-64
Total

Entered(a)
Part-time employment %
5.1
2.1
2.5
2.6
8.8
7.0
8.8
7.9
Unemployment %
1.7
0.6
0.4
0.7
1.0
0.4
0.3
0.5
Not in the labour force %
1.4
0.7
0.9
0.9
1.4
1.6
1.2
1.4
Stayed in full-time employment(a) %
91.7
96.6
96.2
95.8
88.8
91.0
89.7
90.2
Total %
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Total annual average employed full-time '000
597.1
2 345.2
1 678.5
4 620.8
395.8
1 194.3
822.7
2 412.8

(a) Proportion of people who were in full-time employment in month 1 and had the specified labour force status in month 2, averaged across the year.
Labour Force, Australia, Detailed - Electronic Delivery, GM1 (cat. no. 6291.0.55.001).


It was less common for young men aged 15-24 to remain in full-time employment (92%) than those aged 25-44 (97%) or 45-64 (96%). This reflects the greater labour force mobility of younger men. More people moved from full-time employment into part-time employment (3% of men and 8% of women), than moved to unemployment or withdrew from the labour force.



MOVING FROM PART-TIME EMPLOYMENT

For people seeking to balance work and non-work activities, part-time employment may be desirable. In addition both male and female workers are more likely to work part-time as they approach retirement age. For most people aged 45-64 who work part-time this arrangement appears to be by choice. In September 2005, over four-fifths (82%) of part-time workers aged 45-64 did not want to work more hours.(end note 4)

5. Whether moved from part-time employment, 2005

Males
Females
15-24
25-44
45-64
Total
15-24
25-44
45-64
Total

Entered(a)
Full-time employment %
10.3
24.9
21.0
17.2
8.4
10.0
10.5
9.8
Unemployment %
3.2
3.4
1.7
2.9
2.2
1.2
0.8
1.3
Not in the labour force %
8.7
4.5
6.3
6.9
6.7
5.0
4.9
5.4
Stayed in part-time employment(a) %
77.8
67.1
71.0
73.0
82.7
83.8
83.9
83.6
Total %
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Total annual average employed part-time '000
335.0
207.5
206.2
748.6
478.9
849.0
677.9
2 005.7

(a) Proportion of people who were in part-time employment in month 1 and had the specified labour force status in month 2, averaged across the year.
Labour Force, Australia, Detailed - Electronic Delivery, GM1 (cat. no. 6291.0.55.001).


For younger people, part-time employment may be seen as a stepping stone to full-time employment with, in some cases, a part-time job easier to find than a full-time job. Financial pressures may also induce people to take up part-time employment rather than wait for a full-time position.(end note 5) Other people may work multiple part-time jobs to make up full-time hours. In September 2005, almost one-quarter (22%) of part-time workers wanted to work more hours, with a higher proportion of men (28%) wanting more hours than women (20%).(end note 4)


In 2005, most men (73%) and women (84%) who were employed part-time in one month remained part-time in the following month. Proportionally more women in all three age groups stayed in part-time employment (83% for women aged 15-24 and 84% for both older age groups) than men (78% for men aged 15-24, 67% for those aged 25-44 and 71% for those aged 45-64). One-quarter (25%) of those men aged 25-44 and over one-fifth (21%) of men aged 45-64 who were employed part-time moved from part-time employment to full-time employment in the following month. By comparison, around one-tenth (10% and 11%) of both 25-44 and 45-64 year old women moved from part-time to full-time employment.



MOVING FROM NOT IN THE LABOUR FORCE

In 2005, on average there were 3.3 million people aged 15-64 years who were not in the labour force. The majority of people not in the labour force in one month remained outside the labour force in the next month (86% of men and 90% of women). A greater proportion of both men (92%) and women (94%) aged 45-64 remained outside the labour force than those aged 25-44 (80% of men and 89% of women) or 15-24 (81% of men and 83% of women).


Proportionally more men than women moved from being outside the labour force to being unemployed (6% of men and 4% of women aged 15-64 years). The proportion of both men and women moving to unemployment declined with age, with 9% of men aged 15-24 and 8% of women in this age group, compared with 3% of men aged 25-44 and 2% of women in this older group.


Overall, proportionally more males (8%) moved into employment from not in the labour force than females (6%). Males aged 25-44 were also more likely to move into full-time employment (7%) than part-time employment (5%), whereas females in this age group were more likely to move into part-time work (6%) than full-time work (2%).

6. Whether moved from not in the labour force, 2005

Males
Females
15-24
25-44
45-64
Total
15-24
25-44
45-64
Total

Entered(a)
Full-time employment %
2.7
6.6
2.5
3.4
1.4
1.7
0.8
1.3
Part-time employment %
7.2
4.6
2.5
4.5
7.9
5.6
3.4
5.0
Unemployment %
8.7
8.4
2.7
5.8
7.6
4.0
1.7
3.7
Stayed not in the labour force(a) %
81.4
80.4
92.2
86.3
83.2
88.7
94.0
90.0
Total %
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Total annual average not in the labour force '000
398.5
250.5
536.5
1 185.5
418.7
796.1
945.1
2 159.9

(a) Proportion of people who were not in the labour force in month 1 and had the specified labour force status in month 2, averaged across the year.
Labour Force, Australia, Detailed - Electronic Delivery, GM1 (cat. no. 6291.0.55.001).


On average in 2005, a greater proportion of women were outside the labour force than men (32% of women and 17% of men aged 15-64 years). Some people not in the labour force are marginally attached to the labour force, that is they want to work, but do not meet all the criteria to be unemployed (for example, they may not be available for work in the reference week). In September 2005, over one-quarter (26%) of people aged 15-64 years not in the labour force were marginally attached to the labour force. (end note 6) A small proportion of these marginally attached people were discouraged jobseekers, three-fifths (60%) of whom were female.


Some of these discouraged jobseekers are older workers who may decide to retire rather than continue to seek employment due to difficulties in finding work. Government policies have been introduced to encourage retention of older workers in the workforce. These policies have increased the age at which women can access the age pension as well as providing incentives for workers to stay on beyond the minimum retiring age.



ENDNOTES


1. Australian Bureau of Statistics 2006, Labour Force, Australia, Detailed - Electronic Delivery, April 2006 (cat. no. 6291.0.55.001), Canberra.< Back


2. Gross flows measure the number of people who change labour force status from one month to the next. These transitions between labour force status provide a guide to the movements between categories which underlie the changes in monthly levels. Transition data used in this article are annual averages based on monthly matched samples, while totals are based on full LFS estimates.< Back


3. Australian Bureau of Statistics 2005, Australian Social Trends, Australia 2005 (cat. no. 4102.0), Canberra.< Back


4. Australian Bureau of Statistics 2006, Underemployed Workers, Australia, September 2005 (cat. no. 6265.0), Canberra.< Back


5. Chalmers, J, and Kalb, G 2000, The transition from unemployment to work. Are casual jobs a short cut to permanent employment?, Discussion paper no. 109, Social Policy Research Centre, Sydney.< Back


6. Australian Bureau of Statistics 2006, Persons Not in the Labour Force, Australia, September 2005 (cat. no. 6220.0), Canberra.< Back


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