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The Labour Market for Teenage Youth
Geoff Gilfillan
Statistics Group
19 June 2001
Background
Economic analysts and social commentators often draw the distinction
between the relatively high unemployment rates experienced by teenage
youth aged 15 to 19 years and the unemployment rate for all persons over
the age of 15 years.
This Research Note explains the nature of the labour market for teenage
youth and how it contrasts with the labour market for all persons.
The indicator most often quoted by commentators to illustrate changes
in the youth labour market is the teenage full-time unemployment rate
in seasonally adjusted terms. This rate has risen from 15.9 per cent in
April 1981 to 23.3 per cent in April 2001. It peaked at 34.5 per cent
in the middle of 1992.
In contrast, the full-time unemployment rate for all persons increased
from only 5.5 per cent in April 1981 to 7 per cent in April 2001, having
peaked at 12 per cent in mid-1992(1).
Impact of Full-Time Education
The major distinction between the labour market for youth and for the
general workforce is that between 60 and 70 per cent of youth aged 15
to 19 years are in full-time education. This precludes a substantial number
of teenage youth from participating in the full-time labour force but
not from holding part-time jobs.
There has been substantial growth in part-time employment for students
in recent years. This growth has been driven by the greater demand by
students for part-time work, along with the increasing supply of part-time
jobs that has been facilitated by the strong growth of employment in service
industries.
Almost 10 000 full-time students stated in the Labour Force Survey in
April 2001 that they were unemployed and looking for full-time work. A
large proportion of these persons could be expected to give up full-time
education if they could find a full-time job.
When explaining the severity of the youth unemployment problem in June
1992, the former Prime Minister Mr Paul Keating, drew attention to the
restriction on entry to the full-time labour market of full-time students.
He suggested that full-time students were effectively excluded from the
full-time labour market and that consequently we should be more concerned
with the 20 to 30 per cent of the teenage youth population who were in
the full-time labour force. At the time he suggested that about a third
of the full-time labour force were unemployed and looking for work. He
also stated that the number of full-time unemployed represented about
10 per cent of the teenage population.(2)
In the depths of the recession in mid-1992, just over 63 per cent
of teenage youth were in full-time education.
Australian Bureau of Statistics labour force data(3) indicates
that of the remaining youth not attending an educational institution,
110 800 were unemployed and looking for full-time work. There were also
11 500 full-time students who were unemployed and looking for full-time
work at this time.
In total, 122 300 teenage youth were unemployed and looking for full-time
work which represented 33.9 per cent of the full-time labour force
for teenage youth.
The full-time unemployment to population ratio for all teenage youth
was 8.6 per cent.
How does this compare with the situation today? The table below shows
that in April 2001, almost 68 per cent of teenage youth were in
full-time education. Of those not in full-time education, 60 000 were
unemployed and looking for full-time work. There were 9 600 full-time
students who were unemployed and looking for full-time work. In total,
69 600 teenage youth were looking for full-time work which represented
23.2 per cent of the full-time labour force. The full-time unemployment
to population ratio for all teenage youth stood at 5.1 per cent.
The table also shows dramatic shifts in the youth labour market between
April 1986 and April 2001. The proportion of teenage youth in full-time
education has grown from just over a half to over two thirds. The number
of full-time jobs for non-students has fallen by 212 400 while the number
looking for full-time work has fallen by 50 600. The actual number of
teenage youth not in full-time education fell by 220 100.
Increasing incidence of employment among full-time students
In April 1986, 185 000 or 27.5 per cent of the full-time student population
aged 15 to 19 years held a job. In April 2001, just over 360 000 full-time
students or almost 40 per cent of the student population held a job, with
over 98 per cent of them being in a part-time capacity.(4)
Change in Youth Unemployment Level
The chart below tracks the unemployment rate and level for youth looking
for full-time work between April 1981 and April 2001.(5)
The level of unemployed youth looking for full-time work peaked at 163
100 in September 1983. A sustained period of economic growth resulted
in a steady decline in teenage youth full-time unemployment to a low of
73 400 in November 1989.
Part of the fallout from the recession of the early 1990s was the steady
growth in teenage youth full-time unemployment to 133 300 in July 1992.
Another period of sustained economic growth witnessed the decline in full-time
unemployment for teenage youth to 58 300 in October 2000. It has since
risen to 71 100 in April 2001.
The chart also plots the full-time unemployment rate for youth. After
peaking at 34.5 per cent in mid-1992 it declined steadily to a post-recession
low of 19.7 per cent in September 2000. It has since risen to 23.3 per
cent in April 2001.
Composition of Employment for teenage youth
The composition of employment for youth aged 15 to 19 years has changed
dramatically in the last twenty years. Only one third of employed teenage
youth were in full-time jobs in April 2001 compared with 79 per cent in
April 1981. Full-time employment for all youth aged 15 to 19 years fell
by almost 60 per cent in the twenty year interval while part-time employment
almost tripled. Total employment for teenage youth fell by 31 200(6).
The major driving forces behind the shift in composition of teenage employment
has been the increasing proportion of teenage youth opting to stay in
full-time education, the increasing proportion of students choosing to
work part-time and the increasing availability of part-time jobs.
Full-time employment, as a proportion of total employment for teenage
youth who are non-students, has fallen from 88.7 per cent in April 1986
to 71.8 per cent in April 2001.
Of the 450 000 teenage youth working part-time in May 2001, 138 600 or
31 per cent would prefer to work more hours. In May 1986, 22.2 per cent
of teenage youth working part-time wanted to work more hours(7).
Composition of Employment for Teenage Youth and Change in Level-Apr
81 to Apr 01
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Apr-81
|
Prop of Total
Apr 81 (%)
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Apr-01
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Prop of Total
Apr 01 (%)
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Level Change
Apr 81 to
Apr 01
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% Change
Apr 81 to
Apr 01
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Employed Part-Time (000psns)
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147.1
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20.9
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441.2
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65.7
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294.1
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199.9
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Employed Full-Time (000psns)
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555.8
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79.1
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230.5
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34.3
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-325.3
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-58.5
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Employed Total (000psns)
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702.9
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671.7
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-31.2
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-4.4
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Conclusion
The state of the labour market for teenage youth has improved substantially
in the last eight years given the decline in the level of full-time unemployment
and the full-time unemployment rate. While full-time employment opportunities
have fallen for non-students, their numbers are dwindling, as more teenage
youth are opting to stay in full-time education and are combining their
studies with part-time employment.
- Labour Force (ABS Cat No. 6202.0 Table 5).
- Interview on ABC Program AM, 18 June 1992.
- Labour Force (ABS Cat No. 6202.0 Tables 1 and 7-original data).
- ibid.
- Labour Force (ABS Cat No. 6202.0 Table 5).
- ABS Labour Force Supplementary Tables (ABS Cat No. 6291.0.40.001)
original data.
- Labour Force (ABS Cat No. 6203.0) Table 33).
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