4102.0 - Australian Social Trends, 1995  
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Contents >> Work >> Unemployment: Youth unemployment

Unemployment: Youth unemployment

Youth unemployment rates, in line with overall unemployment rates, have declined since 1992. Young women currently have the same unemployment rate as young men.

Youth unemployment is a major issue for the government, policy makers and planners. Although unemployment is a social problem, youth unemployment is of particular concern because of the effect it can have on a person's future. Youth is an important time for choosing a career, gaining and developing skills, establishing an identity and obtaining independence.

Unemployed youth form a large proportion of the total unemployed population. In 1994, of the 855,500 unemployed people, 38% were aged 15-24. 54% of these unemployed youth were men.

Over the last 15 years, the youth unemployment rate has been much higher than the total unemployment rate. In 1994, the youth unemployment rate was 17% compared to an overall unemployment rate of 10%. People aged 15-19 had the highest rate of unemployment of any age group, 23%.

In 1994, unemployment rates were the same for men and women aged 15-19. However, the unemployment rate of those aged 20-24 was higher for men than for women, 15% compared to 12%. Overall, people aged 20-24 had an unemployment rate of 14%.

UNEMPLOYMENT RATES



Source: Labour Force Survey (annual averages)


Measuring youth unemployment

In this review the term youth refers to all people aged 15-24. This is a broader usage of the term than that in the summary tables where youth refers only to the subset aged 15-19. This group, and those aged 20-24, are treated separately in this review.

Youth unemployment refers to the number of people aged 15-24 who are unemployed. The youth unemployment rate is the number of unemployed youth divided by the number of youth who are in the labour force (employed and unemployed). The youth full-time unemployment rate is the number of youth who are looking for full-time work as a proportion of the youth full-time labour force (the number of unemployed people looking for full-time work plus the number of people employed full-time). This is an important measure because most full-time unemployed youth are seeking to begin a career, to gain training and to obtain independence. In contrast, many part-time unemployed youth are studying to obtain qualifications leading to a career.

The unemployment rate and the full-time unemployment rate are often misinterpreted as the proportion of all youth who are unemployed. However, they do not take into account the many people between the ages of 15 and 24 who are attending an educational institution full-time and may have no current interest in joining the labour force. An alternative measure is the youth unemployment/fully active ratio. It is the number of unemployed youth who are not attending an educational institution full-time as a proportion of the youth labour force plus others attending an educational institution full-time.

The labour force participation rate measures the proportion of the civilian population which is in the labour force.


Full-time unemployment
Youth full-time unemployment rates were higher than total youth unemployment rates in 1994. The full-time unemployment rate for youth was 19%. Those aged 15-19 had a full-time unemployment rate of 30% and those aged 20-24 had a full-time unemployment rate of 15%.

Women aged 15-19 had a particularly high full-time unemployment rate (35%), 7 percentage points higher than the rate for men aged 15-19 (28%). In contrast, women aged 20-24 had a full-time unemployment rate of 14% compared to a full-time unemployment rate of 16% for men of the same age.

Labour force participation
It is important to consider youth unemployment rates in the context of labour force participation rates, particularly for teenagers. This is because many are studying full-time and may have no current interest in working or looking for work.

In 1994, the labour force participation rate of people aged 15-19 was 57% compared to 63% for the total population. Participation rates for people aged 15-19 had been similar to those of the total population until 1986, when they started to decrease. This was the result of an increase in the number of people aged 15-19 staying at school or continuing to further education rather than entering the labour force. In 1994, 38% of people aged 15-19 were not in the labour force and were attending an educational institution. In contrast, labour force participation rates for people aged 20-24 have been much higher than those for the total population over the past 15 years. In 1994, their participation rate was 82%.

THE LABOUR FORCE FRAMEWORK, SEPTEMBER, 1994

Source: Labour Force Survey

LABOUR FORCE PARTICIPATION RATES



Source: Labour Force Survey (annual averages)


Youth unemployment and educational participation
In May 1994, the unemployment/fully active ratio for people aged 15-19 was 8% compared to 11% for those aged 20-24 and 7% for those aged 25-64. Comparing these rates with the other measures of unemployment presented shows a reversal of position between those aged 15-19 and those aged 20-24. This suggests that the older group may have more difficulty in finding permanent employment than the younger group.

In terms of standard unemployment rates, 30% of people aged 15-19 who were not attending an educational institution were unemployed compared to 15% of those aged 20-24. In contrast, people aged 15-19 who were attending school had an unemployment rate of 19%, which was similar to that of people aged 15-19 who were undertaking full-time tertiary education (22%). Although these rates are high, many of these people would be seeking part-time employment to supplement their incomes while they are studying. People aged 20-24 who were undertaking tertiary education full-time had an unemployment rate of 14%.

High rates of unemployment among youth not attending an educational institution are likely to be related to low levels of educational attainment. In 1994, 45% of unemployed people aged 15-19 who were not attending school had not completed the highest level of secondary school, compared to 35% of employed people aged 15-19 not attending school. For those aged 20-24, 40% of unemployed people had not completed the highest level of secondary school compared to 23% of employed people in this age group1.

Unemployed women aged 20-24 were less likely than unemployed men of the same age to have not completed the highest level of secondary school. 42% of unemployed men and 36% of unemployed women aged 20-24 had not completed the highest level of secondary school.

UNEMPLOYMENT AND ATTENDANCE AT AN EDUCATIONAL INSTITUTION, 1994
Aged 15-19 years
Aged 20-24 years
Number
Unemployment rate
Participation rate
Number
Unemployment rate
Participation rate
Attendance
'000
%
%
'000
%
%
Attending
70.9
17.9
42.9
26.7
10.8
65.1
    Attending school
40.6
19.1
33.8
1.2*
70.5*
15.1*
    Full-time tertiary
21.8
21.9
47.5
15.6
13.6
49.6
    Part-time tertiary
8.5
10.0
97.0
9.9
7.6
95.7
Not attending
92.1
30.1
88.8
136.4
14.7
88.3
Total
163.0
23.2
55.3
163.1
13.9
82.1
Source: Survey of Transition from Education to Work


Reasons for unemployment
Among unemployed youth, it was more common to have lost a job than to have left a job. In 1994, 24% of unemployed youth were job losers and 15% were job leavers. The others were looking for their first job, or had re-entered the labour force after two or more years out of it.

The main reason for unemployment among people aged 15-19, given by 37% of them, was that they were looking for their first full-time job. A further 15% said they had lost their previous job. Most of these (68%) had been laid off or retrenched.

19% of unemployed youth aged 20-24 said they had left their last job. A further 33% said they had lost their last job. 67% of these job losers had been laid off or retrenched.


International comparison
In 1993, of the thirteen OECD countries for which data on youth unemployment were available, Australia's youth unemployment rate (19%) was fifth highest. Spain had the highest youth unemployment rate at 43%. Japan had the lowest at 5%. The United States and the United Kingdom had lower youth unemployment rates than Australia.

Caution should be exercised when making international comparisons of statistics of youth unemployment due to differences in age coverage, for example. Statistics for Italy are based on youth aged 14-24; for Australia, Canada, Finland, France, Japan, New Zealand and Portugal on youth aged 15-24; and for Norway, Spain, Sweden, the United Kingdom and the United States on youth aged 16-24.

YOUTH UNEMPLOYMENT RATES IN SELECTED OECD COUNTRIES, 1993
Youth under 20 years(a)
Youth 20-24 years
All youth(a)
Country
%
%
%
Spain
50.3
40.5
43.2
Italy
36.4
28.6
30.6
Finland
32.6
29.6
30.5
France
26.5
24.4
24.6
Australia
23.0
16.1
18.6
Sweden
19.2
18.1
18.4
Canada
19.9
16.4
17.8
UK
19.2
16.4
17.3
New Zealand
21.3
14.7
17.2
Norway
19.3
11.9
13.9
USA
19.0
10.5
13.3
Portugal
13.6
11.2
12.0
Japan
7.1
4.7
5.1
(a) Age groups vary between countries, see text above.

Source: OECD (1994) Employment Outlook 1994

States and territories
In 1994, Tasmania and South Australia had the highest rates of youth unemployment at 20%. The Australian Capital Territory and the Northern Territory had the lowest at 15%.

Among people aged 15-19, the highest rate of unemployment, 28%, was experienced in South Australia. Victoria and Tasmania also had high rates of unemployment for this age group, 25% and 24% respectively. These states also had high rates of unemployment overall.

For people aged 20-24, Tasmania had the highest rate of unemployment (17%). Unemployment rates were lowest for this age group in the two territories.

In the Australian Capital Territory, youth comprised about half of all unemployed people in 1994. In contrast, just over one-third of all unemployed people in New South Wales were aged 15-24.

Unemployment rates for youth were lower in capital cities than in the rest of the state in all states except Western Australia and South Australia. The highest rate of youth unemployment, 21%, was experienced in Adelaide, non-metropolitan Victoria and non-metropolitan New South Wales. Sydney and non-metropolitan Western Australia had the lowest rate of youth unemployment (14%).

UNEMPLOYMENT RATES, 1994
15-19 years
20-24 years
All youth
All persons
State
%
%
%
%
New South Wales
21.7
12.6
16.1
9.6
Victoria
25.2
15.5
19.0
10.8
Queensland
21.4
13.0
16.4
9.3
South Australia
28.1
14.9
19.8
10.6
Western Australia
18.5
12.0
16.1
8.2
Tasmania
24.4
16.8
19.9
11.1
Northern Territory
21.3
11.2
14.6
7.5
Australian Capital Territory
23.3
10.7
15.2
7.2
Source: Labour Force Survey (annual averages)


Birthplace
Young people born overseas were more likely to be unemployed than those who were Australian born. The unemployment rate in 1994 for overseas born people aged 15-19 was 28% compared to 22% for those born in Australia. People aged 20-24 who were overseas born had an unemployment rate of 18% compared to 13% for those who were Australian born. Youth born in non-English speaking countries had an unemployment rate of 32%, nearly double that of Australian born youth (18%) and youth born in the main English speaking countries (17%).

Lower education levels coupled with language difficulties among unemployed young people born overseas partly explain these differences. In February 1994, 72% of unemployed youth born in other than the main English speaking countries had no post-school qualifications. This compared to 64% of unemployed youth born in the main English speaking countries and 70% of unemployed Australian born youth1.

UNEMPLOYMENT RATES BY BIRTHPLACE, 1994
Australian born
Overseas born
Age group (years)
%
%
Aged 15-19
22.2
27.6
    Men
22.0
29.4
    Women
22.5
26.0
Aged 20-24
12.9
18.4
    Men
14.3
18.4
    Women
11.3
18.4
All unemployed
9.1
11.6
    Men
9.5
11.6
    Women
8.7
11.7
Source: Labour Force Survey (annual averages)


Long-term unemployment
Long-term unemployment, that is, being unemployed for 52 weeks or more, can be of particular concern for young people especially those who may never have worked. The likelihood of obtaining employment decreases as the length of time in unemployment increases2. Consequently, in Working Nation, the White Paper on Employment and Growth, the government introduced a range of policies to assist long-term unemployed people to find work. The main elements include providing individual case management and training for the long-term unemployed, and subsidising employers when placing the long-term unemployed.

In May 1994, three-quarters of unemployed people aged 15-19 had been in full-time or part-time education a year earlier3. Reflecting this, the proportion who were long-term unemployed in 1994 was 17% compared to 36% of all unemployed people. There was little difference in the proportions of long-term unemployed young men and women.

33% of unemployed people aged 20-24 were long-term unemployed. The proportion of women (31%) was slightly lower than that of men (34%).

LONG TERM UNEMPLOYMENT(a)



(a) Proportion of unemployed people who have been unemployed for a period of 52 weeks or more.

Source: Labour Force Survey (annual averages)


Part-time employment
Many people aged 15-24 combine work and education and so choose to work part-time. However, many others employed part-time would prefer to work more hours, but are unable to obtain the work. In 1994, of the 220,200 people aged 20-24 who were working part-time, 45% preferred to work more hours. 30% of the 328,900 part-time employed people aged 15-19 also preferred to work more hours.

Discouraged jobseekers
An increase in unemployment can also lead to an increase in the number of discouraged jobseekers. These are people who are disillusioned about their job prospects and have given up looking for work but would be available to start a job if one were offered. In September 1994, discouraged jobseekers accounted for 1% of people aged 15-19 (6,200 persons) and 2% of people aged 20-24 (4,900 persons) who were not in the labour force. Young women were more likely to be discouraged jobseekers than young men.


Endnotes
1 Labour Force Status and Educational Attainment, Australia (cat. no. 6235.0).

2 Australia's Long-term Unemployed: A Statistical Profile (cat. no. 6255.0).

3 Transition from Education to Work, Australia (cat. no. 6227.0).




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