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Newsletters - Age Matters - Issue Number 9, August 2004
 
 

CONTENTS WELCOME

Welcome to the August 2004 edition of Age Matters. While Maryann Wood is undertaking other duties and having a well earned break, over the next couple of months, I will be managing the National Ageing Statistics Unit. We also welcome Tara Pritchard as Director of the Population Statistics Branch in the Queensland.

Work continues on our Mature Age Profiles. The profiles, which will be released from October, 2004, analyse various components of mature age persons (those aged 45-64 years) including demographics, cultural diversity, labour force characteristics, health, housing, living arrangements and community life.

The profile analysing the mature age characteristics of the labour force will be presented at the Australian Population Association Conference in Canberra in September, 2004. At the conference, we will also be presenting a paper on the use of information technology by older people.

In this issue of Age Matters you will find the following main article of interest:
  • Human Capital - an important concept in modern economics and in economic policy discourse. The ABS has produced experimental measures of the stock of human capital for Australia by measuring the stock of human capital as the discounted present value of expected lifetime labour market income. The estimates show that there has been a significant increase in the stock of human capital in Australia over a 20 year period, characterised by sharply rising shares of total human capital attributable to more educated workers. This article will show results from this study, highlighting the impact of changes in the population's age structure on human capital stocks over the past twenty years.

We also provide links to 'Seachange - new coastal residents' an article from Australian Social Trends (ABS cat. no. 4102.0) which looks at who is moving to the coast and from where they have moved.

I look forward to being a part of the National Ageing Statistics Unit over the next couple of months. If you have any suggestions for the newsletter or queries regarding statistics on ageing, please do not hesitate to contact me.

Regards

Robyn MacDonald

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HUMAN CAPITAL

The following findings are summarised from an ABS working paper Measuring the Stock of Human Capital ABS cat. no. 1351.0.55.001), released in May 2004.

Introduction

In the Australian System of National Accounts measures of capital stock are currently confined to physical capital. Although human capital is an important concept in modern economics and in economic policy discourse, direct measures of human capital stocks are available for very few countries. In order to fill this gap, the ABS has recently produced experimental measures of the stock of human capital for Australia.

Human capital can be simply viewed as productive capacity embodied in working-age individuals. The dynamics of this capacity critically depends on investment in education and training. Human capital growth is a key driver for productivity growth and in sustaining higher standards of living for Australians. Given that the Australian population is ageing, there are significant implications for Government expenditures on health and social welfare payments: human capital is particularly pertinent to policy makers and economic/social analysts.

This article will show some results from this study, highlighting the impact of changes in the population's age structure on human capital stocks over the past twenty years.

Methodology

The method chosen to measure the stock of human capital is the lifetime labour income method as used by two American national account economists Dale Jorgenson and Barbara Fraumeni. This measures someone's human capital as the total income they could generate in the labour market over their lifetime. In order to use this method, inferences about future income streams are made using cross-sectional information on current earnings. These projections are made separately according to people's sex, age and educational attainment. The information on differences in income streams from alternative educational attainment could be useful for analysing returns to investment in education.

Results

The data used for this analysis is from the Australian Census of Population and Housing in 1981, 1986, 1991, 1996 and 2001. Age-earnings profiles are constructed for four categories of educational attainment for both men and women over this twenty year period. Based on these age-earnings profiles, per capita measures of lifetime labour market incomes are derived for each age/sex/education cohort using appropriate growth and discount rates, and they are then applied to the number of people in the corresponding group. We then aggregate across all groups to estimate the human capital stock for Australia, which is presented in the following table.
TABLE 1: MEASURES OF HUMAN CAPITAL STOCK IN AUSTRALIA (BILLIONS OF CURRENT DOLLARS)

1981
1986
1991
1996
2001

MaleHigher Degree
15.15
29.40
67.82
109.73
160.27
Bachelor Degree
77.71
164.80
300.73
461.47
659.28
Skilled Labour
250.77
452.89
662.91
827.02
1,104.18
Unqualified
378.91
651.66
941.76
1,133.31
1,351.96
Sub Total
722.54
1,298.75
1,973.21
2,531.53
3,275.69
FemaleHigher Degree
3.34
7.58
21.77
45.38
88.70
Bachelor Degree
31.42
78.99
192.13
337.94
570.21
Skilled Labour
100.25
194.72
266.89
342.22
463.99
Unqualified
331.10
538.15
777.47
996.05
1,177.07
Sub Total
466.11
819.44
1,258.26
1,721.60
2,299.97
Total
1,188.65
2,118.18
3,231.47
4,253.13
5,575.66


The two fastest growing categories for human capital stock are women with higher and bachelor degrees. The fastest category for both men and women was the higher degree, however the stock has grown faster for women than men over the twenty year period. The growth in human capital stock in the 1980's was mainly due to an increase in the total population rather than an increased rate of growth in a particular area. The growth in the human capital stock in the 1990's however, was driven by an increased rate of growth in a specific area, higher and bachelor degree holders. The growth rate for skilled labour and unqualified people has been slowing over the past twenty years, where both men and women have slowed at the same rate. This suggests that while the Australian population has been ageing, we are also becoming more educated.

The average age of educational attainment by Australians increased between 1981 and 2001. Table 2 illustrates changes in average age of men and women holding different levels of educational attainment.

TABLE 2: AVERAGE AGES BY EDUCATIONAL ATTAINMENT, YEARS

Qualification
1981
1986
1991
1996
2001

MaleHigher Degree
40.6
42.0
43.4
44.0
44.6
Bachelor Degree
37.2
38.0
39.1
39.9
41.0
Skilled Labour
41.0
41.4
41.4
42.0
43.1
Unqualified
43.2
43.0
43.0
43.1
43.8
FemaleHigher Degree
38.8
40.1
41.0
41.5
42.1
Bachelor Degree
35.2
35.9
37.6
38.5
39.7
Skilled Labour
38.9
39.5
39.8
40.6
41.3
Unqualified
43.3
43.2
43.0
43.4
44.4

Table 3 shows the contribution to growth in human capital stock from people with different levels of educational attainment. Growth in human capital stock has been driven by increases in the human capital embodied in the skilled labour and bachelor degree groups.

As people age, their human capital changes. All other things being equal, someone's remaining lifetime labour income will tend to decrease (because their time left in the labour force has shortened). However, as people spend longer in the work force they gain skills and experience, which increases their productive capacity and, therefore, their income. The rate at which they gain skills and experience can change over time. Table 3 suggests that any reduction in human capital from a "reduction in working life" effect, has been more than outweighed by the "increasing skills and experience" effect combined with an increase in the number of people classed as 'skilled labour' or with higher educational attainment.

TABLE 3: DECOMPOSITION ANALYSIS OF GROWTH IN REAL HUMAN CAPITAL STOCK (%)

Qualification
1981-86
1986-91
1991-96
1996-01

MaleTotal changes
20.73
6.35
13.02
16.57
Higher Degree
0.64
1.39
1.46
1.37
Bachelor Degree
4.56
3.52
5.36
5.23
Skilled Labour
7.39
0.86
3.33
6.63
Unqualified
8.13
0.58
2.87
3.34
FemaleTotal changes
18.08
7.49
20.54
20.36
Higher Degree
0.38
0.94
1.45
2.01
Bachelor Degree
4.64
6.77
8.39
10.21
Skilled Labour
6.55
-0.96
2.75
4.40
Unqualified
6.51
0.74
7.95
3.74

Conclusion

Australian human capital has increased significantly over the past 20 years, despite an ageing population. The more educated stock of human capital has increased most rapidly, especially among women, while the average ages of people with tertiary qualifications has also increased, in particular for higher degree and bachelor degree holders. Any reduction in human capital from an ageing work force effect, has been offset by increases in the quality of human capital in the workforce.

In the future, the ABS hopes to use these estimates of human capital stock alongside physical capital to establish a more complete understanding of national 'capital'.

For more information please contact Sarah Dexter sarah.dexter@abs.gov.au or Hui Wei, hui.wei@abs.gov.au.

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SEACHANGE - NEW COASTAL RESIDENTS

The beach holds an iconic status in our culture. Coastal regions have long been a favourite place for Australians to take their holidays and relax. More recently, researchers have identified an increasing tendency for people to live near the coast.

For an analysis of who in the population is moving to the coastal regions, refer to the ABS publication Australian Social Trends 2004 (ABS cat. no. 4102.0) feature article Seachange - new coastal residents
The analysis is based on the 2001 Census of Population and Housing and examines the characteristics of people who moved to a high growth coastal region during the year before the 2001 census.


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DID YOU KNOW?

In June 2003,

  • the number of older people (aged 65 years and over) in Western Australia rose by 3.1% (in the 12 months to June 2003). In this age group, the number of females exceeded the number of males, with 82.0 males for every 100 females.
  • the largest proportions of persons aged 65 years and over were in the statistical divisions of the South West (13.8%) and Lower Great Southern (14.0%). In contrast, the Pilbara and the Kimberley had only 2.4% and 4.4% of their respective populations in this age group.
  • people aged 85 years and over accounted for 1.3% of the total Western Australia population and 11% of those aged 65 years and over, in June 2003.
  • Only 4 statistical local areas had more than 3% of their population aged 85 years and over - Claremont (3.9%), Victoria Park (3.7%), Stirling - South Eastern (3.6%) and Nedlands (3.4%). Outside the metropolitan area, the statistical local area of Albany - Central had the highest proportion of their population aged 85 years and over (2.7%).

For further details, refer to Population by Age and Sex, Western Australia -- Electronic Delivery (ABS cat. no. 3235.5.55.001), which was released on 5 July 2004.

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12TH BIENNIAL AUSTRALIAN POPULATION CONFERENCE

The 12th Biennial Australian Population Association Conference will be held at The Australian National University, Canberra from 15 to 17 September 2004. This important event is the primary meeting place for leading Australian population researchers and policy makers. The theme of the conference will focus on the links between population issues and policy directions.

For further information please contact Dr Ann Evans, Centre for Social Research, RSSS, Australian National University on telephone (02) 6125 0133 or email
Ann.Evans@anu.edu.au

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NEW AND IMMINENT DATA RELEASES

Labour Mobility (ABS cat. no. 6209.0) was released on 25 August 2004. This publication provides information on persons aged 15-69 years who had worked at some time during the year ending February. Details of job mobility, job tenure, number of employers or businesses during the year and reason for ceasing last job or changing locality are presented. Occupation, industry and duration of current and last job are also available. Estimates can be cross-classified by labour force demographics such as state, sex, age, marital status and country of birth.

Perspectives on Regional Australia: Women's Employment in Urban, Rural and Regional Australia, 2001 Census (ABS cat. no. 1380.0.55.001) was released on 17 August 2004. This publication is the first of a series of reports analysing a range of topics with a particular focus on Regional Australia. In this issue data from the 2001 Census of Population and Housing has been used to present some perspectives on the characteristics of women in employment in urban, rural and regional Australia.

This paper provides an insight into the different employment conditions experienced by women in regional Australia by examining characteristics such as age, employment status, income, qualifications and industry of employment. The data is presented using the geographic classification "Section of State" which enables comparisons in employment patterns across major urban cities, medium townships, small townships and rural areas of Australia.


Survey of Education and Work, Australia - Confidentialised Unit Record File on CD-ROM (ABS cat. no. 6227.0.30.001) was released on 9 July 2004. This product provides selected information on participation in education, highest educational attainment, transition from education to work and current labour force and demographic characteristics for the civilian population aged 15-64 years. Characteristics reported on include: type of educational institution attended or attending; level and main field of education of current study and highest level and main field of educational attainment. Information on unsuccessful enrolment and deferment of study is included for persons not studying in the survey year.

For further enquiries on these ABS products please contact the National Information and Referral Service on 1300 135 070.

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WHERE CAN YOU FIND US???

The
Ageing theme page contains ageing-relevant information from the ABS and links to other Commonwealth Government agencies. The Ageing theme page highlights the type and range of data available for ageing analyses and will be updated to highlight new data releases as they become available.


NASU CONTACT DETAILS

Director
Tara Pritchard
Telephone: (07) 3222 6312
Email:
tara.pritchard@abs.gov.au
Assistant Director
Robyn MacDonald
Telephone: (07) 3222 6206
Email:
robyn.macdonald@abs.gov.au
Mailing address
National Ageing Statistics Unit (NASU)
Australian Bureau of Statistics
GPO Box 9817, BRISBANE QLD 4001

Fax: (07) 3222 6038
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