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On the fringe of the labour market


The Australian Bureau of Statistics (ABS) has released updated estimates of the extended labour force underutilisation rate in Participation, job search and mobility, February 2017. This measure extends on the unemployment, underemployment and underutilisation rates, which are already produced on a regular basis. The rate provides further information on people whose labour is not being utilised, by adding two extra groups to the underutilisation rate. These two extra groups are outlined below.

Marginal attachment to the labour force

To be considered a part of the labour force a person must be classified as either employed or unemployed. To be counted as unemployed, a person must meet the criteria of actively looking for work and being available to work within a defined period. People who wanted to work, but did not meet one or other of these criteria are considered marginally attached. It is the intent that a person wants to work, which gives them a link to the labour force. The ABS relies on a person’s own interpretation of the questions asked in order to define these extra groups of people. People who do not meet the availability criteria (available to start in the survey reference week), but who could start work within four weeks, are counted in the extended underutilisation rate. 

Discouraged job seekers

Discouraged job seekers are people who were not in the labour force, who wanted to work, were available to start work within a defined period, but who were not actively looking due to labour market related reasons. The types of reasons are based on a person’s perception of how they are framed as a job seeker, the local or required job conditions and/or their interactions with employers. For example, a person could indicate: their age was a problem (considered too young or too old); their ill health or disability discouraged employers; they lacked the required schooling, training, skills or experience; they had difficulties related to language or ethnicity; there were no jobs in their area; no jobs with suitable hours; no jobs in their type of work; or no jobs at all. 

Measuring extended underutilisation

The additional groups of people whose labour could be drawn on are added to the unemployed and the underemployed to create an extended pool of underutilised labour. This pool of people is then expressed as a proportion of the labour force, augmented by the two additional groups. For example, at February 2017 the rate was 15.4%, comprising:

724,200  Unemployed
+
1,094,100  Underemployed
+
60,100  Marginally attached (actively looking, can start within four weeks)
+
101,500  Discouraged job seekers
as a per cent of
12,844,200  the Labour force (employed + unemployed) augmented by two extra groups.

Notes: The unemployed, underemployed, base labour force and marginally attached groups all represent an average of the 12 months ending February 2017. Estimates are from the original series. The discouraged job seeker estimate is point in time, relating to the survey month. Sources: ABS, Labour force, Jul 2017, cat. no. 6202.0 (Tables 1 and 24);  ABS, Labour force, detailed–electronic delivery, Jul 2017, cat. no. 6291.0.55.001 (Data cube NM1); and ABS, Participation, job search and mobility, Feb 2017, cat. no. 6226.0 (Table 11).

Chart 1 provides the extended underutilisation rate by sex for the time series presented by the ABS in their Special table release. Chart 2 provides the series by age. Note that the survey reference period changes between 2013 and 2014, from September to February. For more information see the Explanatory notes in the survey release and with the Special table workbook.

1. Extended underutilisation rate by sex, Australia, 1994 to 2017

Extended underutilisation rate by sex, Australia, 1994 to 2017

2. Extended underutilisation rate by selected age groups, Australia, 1994 to 2017

Extended underutilisation rate by selected age groups, Australia, 1994 to 2017

Source: ABS, Participation, job search and mobility, Feb 2017, cat. no. 6226.0 (Special table).

The Special table release also includes the rate by state or territory of usual residence (note: this is the only geographic framework available). For questions or further assistance please contact the Parliamentary Library Statistics and Mapping Section.

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