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1345.4 - SA Stats, Oct 2009  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/10/2009   
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FEATURE ARTICLE: WHO'S NOT IN THE LABOUR FORCE


INTRODUCTION

In August 2009 (in trend terms) there were 491,900 South Australian persons not in the labour force; the highest number ever recorded. 'Persons not in the labour force' is the term used to describe those people aged 15 years and over who are neither employed nor unemployed. They represent a potential supply of labour not reflected in employment and unemployment statistics. The importance of monitoring the potential labour supply is highlighted by the introduction of a new 'Employment participation' target in the update of South Australia's Strategic Plan.

This article looks at the recent trend and changing composition of people not in the labour force in South Australia and examines the various factors that may influence a person's ability and willingness to enter the workforce. The article provides information to understand the characteristics of those not in the labour force, to determine what support or interventions could be put in place to help get them into the labour force.


PERSONS NOT IN THE LABOUR FORCE

In August 2009, the total number of people not in the labour force in South Australia reached 491,900 (in trend terms).

PERSONS NOT IN THE LABOUR FORCE, South Australia
Graph: PERSONS NOT IN THE LABOUR FORCE, South Australia


Although the number of people not in the labour force has increased over the last 10 years, the proportion of people not in the labour force aged 15 years and over has decreased. From August 1999 to August 2009, the proportion of people not in the Labour Force in South Australia decreased from 39.6% to 37.0%. This proportion reached its lowest level in September and November 2008 at 36.3% before increasing to 37.0% in August 2009. The proportion of South Australians not in the labour force remained constantly above the national rate for this 10 year period. This is most likely due to the different age structure of South Australia's population compared to the rest of Australia. South Australia has an older age profile than Australia, with 13.7% of those in scope of the labour force survey aged 70 and over, in August 2009, compared to 11.7% for Australia (ABS 2009a).

PERSONS NOT IN THE LABOUR FORCE, Trend
Graph: PERSONS NOT IN THE LABOUR FORCE, Trend


The proportion of males not in the labour force in South Australia remained generally steady during the period, with a proportion of 30.4% in August 1999 and 31.1% in August 2009. The actual number of males not in the labour force increased from 179,400 to 205,100 over this period (ABS, 2009a).

The proportion of females not in the labour force in South Australia decreased from 48.5% in August 1999 to its lowest proportion of 42.1% in April 2009, before increasing slightly to 42.6% in August 2009. The actual number of females not in the labour force remained relatively stable during this period, decreasing slightly from 301,200 in August 1999 to 297,800 in August 2009 (ABS, 2009a).

PERSONS NOT IN THE LABOUR FORCE, South Australia - Trend
Graph: PERSONS NOT IN THE LABOUR FORCE, South Australia—Trend


There has been a sizeable decrease, over the last ten years, in the proportion of older people who are not in the labour force. The proportion of males aged between 55 and 64 not in the labour force in South Australia decreased from 44.9% for the year ending August 1999 to 28.7% for the year ending August 2009. The proportion of males aged between 65 and 69 not in the labour force decreased from 82.9% to 72.9% while the proportions in other age groups remained similar over the period.

MALES NOT IN THE LABOUR FORCE, South Australia - Original
Graph: MALES NOT IN THE LABOUR FORCE, South Australia—Original


Between the year ending August 1999 and the year ending August 2009, the proportion of South Australian females not in the labour force decreased in all age groups except in the 15 to 24 year age group, which increased slightly from 32.4% to 33.4%. The 55 to 64 year age group experienced a large decrease from 70.5% to 43.4%, while the 45 to 54 year age group decreased from 32.5% to 21.5%.

FEMALES NOT IN THE LABOUR FORCE, South Australia - Original
Graph: FEMALES NOT IN THE LABOUR FORCE, South Australia—Original



MAIN ACTIVITY

In South Australia, the two most common activities for people aged 15 and over whilst not in the labour force in 2008 were; 'Retired or voluntarily inactive', and 'Home duties'. There were 121,200 people 'Retired or voluntarily inactive' and 119,100 whose main activity was 'Home duties'. The most common activity for males was 'Retired or voluntarily inactive' while the most common activity for females was 'Home duties'. Approximately 15%, or 62,200 people, said their main activity when not in the labour force was 'Attending an educational institution'. The next most common activity for those not in the labour force was 'Own long-term health condition or disability' contributing to just over 11% (47,000 people) of those not in the labour force, with the majority of these being males (28,400).

PERSONS NOT IN THE LABOUR FORCE(a), Main Activity when not in the labour force(b) - SA - 2008

Male
Female
Persons
no
%
no
%
no
%

Retired or voluntarily inactive
64 608
37.8
56 573
22.5
121 180
28.7
Home duties
16 243
9.5
102 881
40.9
119 125
28.2
Caring for children
*3 625
2.1
15 643
6.2
19 267
4.6
Attending an educational institution
30 599
17.9
31 552
12.5
62 151
14.7
Own long-term health condition or disability
28 381
16.6
18 788
7.5
47 169
11.2
Own short-term illness or injury
*3 245
1.9
*2 663
1.1
5 907
1.4
Looking after ill or disabled person
4 931
2.9
6 245
2.5
11 175
2.6
Travel, holiday or leisure activity
11 759
6.9
10 421
4.1
22 179
5.2
Working in unpaid voluntary job
*4 187
2.5
5 568
2.2
9 754
2.3
Other
*3 514
2.1
*1 467
0.6
4 981
1.2
Total not in the labour force
171 091
100.0
251 799
100.0
422 890
100.0

* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) Persons aged 15 years and over
(b) Care should be taken when comparing estimates as these categories are not mutually exclusive. See paragraph 26 of the Explanatory Notes in the publication.
Source: Persons Not in the Labour Force Survey, data available on request



MAIN REASON NOT IN THE LABOUR FORCE

When assessing the capacity of the labour force to support a growing economy, it is important to consider the reasons why people choose not to participate in the labour force.

The following graph shows Australian people aged 15-69, not in the labour force, who were not actively looking for work, but were available to start. The graph only shows two of the main reasons; discouraged job seekers and those caring for children. Due to the high error levels associated with the South Australian data, Australian data will be used. It can be assumed a similar trend would be evident in South Australia.

There has been a general decline in the numbers of discouraged job seekers and those caring for children. The number of discouraged job seekers in Australia decreased from 110,900 in September 1998 to 56,300 in September 2008 while those caring for children decreased from 209,200 to 143,400 over this same period.

PERSONS NOT IN THE LABOUR FORCE, Main reason for not actively seeking work, Australia - Original
Graph: PERSONS NOT IN THE LABOUR FORCE, Main reason for not actively seeking work, Australia—Original



EDUCATIONAL ATTAINMENT

Almost 90,000 (37%) South Australians not in the labour force, aged 15 to 64, have a highest level of education of year 10 or below. There are over 60,000 people, not in the labour force, who are educated to a certificate level or higher including almost 28,000 people with a Bachelor Degree or above.

PERSONS NOT IN THE LABOUR FORCE(a), Level of highest educational attainment - SA - May 2008

Males
Females
Persons
no.
no.
no.

Bachelor Degree or above(b)
7 989
19 877
27 866
Advanced Diploma/Diploma
*2 892
10 339
13 230
Certificate level(c)
11 027
11 510
22 537
Year 12
12 805
28 711
41 516
Year 11
16 814
26 254
43 067
Year 10 or below
33 832
55 065
88 898
Total(d)
85 843
153 405
239 248

* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) Includes persons aged 15 to 64 years
(b) Includes Bachelor Degree, Graduate Diploma, Graduate Certificate and Postgraduate Degree
(c) includes Certificate level I to IV and Certificate not further defined
(d) Includes level not determined and persons with no educational attainment
Source: Survey of Education and Work, data available on request



TIME SINCE LAST JOB

There were almost 40,000 people in South Australia not in the labour force in 2008, aged 15 to 69, who had worked within the last 12 months, and just under 44,000 people who had their last job between 1 and 3 years ago. For approximately 146,000 people not in the labour force, it had been at least three years since their last job. It may be more difficult for people who have not worked in the past three years to re-enter the workforce than for those who had been employed more recently.

PERSONS NOT IN THE LABOUR FORCE(a), Time since last job - SA - 2008

Males
Females
Persons
no.
no.
no.

Under twelve months
17 000
22 926
39 926
1 year and under 3 years
19 053
24 737
43 790
3 years and under 5 years
11 002
18 172
29 173
5 years and under 10 years
19 651
24 576
44 227
10 years or more
21 124
51 545
72 669

(a) Persons aged 15 to 69 years
Source: Persons Not in the Labour Force Survey, data available on request



INTENTION TO ENTER THE LABOUR FORCE

People's future intentions to enter the labour force can provide a guide as to future labour force supply. The majority (175,100 or 61%) of South Australians not in the labour force in 2008 did not intend to enter the labour force in the next 12 months. There were 64,100 people who did intend to join the labour force in the next 12 months and another 27,300 people who stated they might enter the labour force in the next 12 months.

PERSONS NOT IN THE LABOUR FORCE(a), Intention to enter the labour force - SA - 2008

Males
Females
Persons
no.
no.
no.

Intended to enter the labour force in the next 12 months
27 258
36 816
64 075
Might enter the labour force in the next 12 months
9 767
17 466
27 233
Did not intend to enter the labour force in the next 12 months
65 004
110 105
175 109
Did not know
*2 358
*3 724
6 082
Permanently unable to work
7 793
7 023
14 816

* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) Persons aged 15 to 69 years
Source: Persons Not in the Labour Force Survey, data available on request



CONCLUSION

In South Australia, the proportion of people not in the labour force has generally decreased over the past decade but continually remained above the Australian level, due partly to the larger proportion of older people in South Australia. The decreased proportion of people not in the labour force is largely a result of an increased number of females entering the workforce and legislative changes encouraging older workers to stay in the labour force. It is also partly the result of a decreased number of 'Discouraged job seekers' and 'Persons caring for children', both of which are common reasons for not participating in the labour force.

South Australia's original Strategic Plan included targets relating to rates of employment and unemployment but a specific target relating to employment participation was not included until the 2007 update. With an ageing population, and in order to support continued economic development, the South Australia government has recognised the need for a sustained effort to increase labour force participation and to encourage workers to remain in the labour force until an older age. This article provides information to assist policy makers understand the characteristics of those not in the labour force so they can tailor support and interventions to help get people into the labour force.


LIST OF REFERENCES

ABS 2009a, Labour Force Australia, Detailed - Electronic delivery (cat. no. 6291.0.55.001) ABS, Canberra

ABS 2009b, Labour Force Australia, August (cat. no. 6202.0) ABS, Canberra

ABS 2008a, Persons not in the Labour Force, Australia, September (cat. no. 6220.0) ABS, Canberra

ABS 2008b, Education and Work, Australia (cat. no. 6227.0) ABS, Canberra

Government of South Australia, South Australia's Strategic Plan 2007


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