Notes on the data: Labour force

Labour force participation, June 2022

Policy context: There is a strong correlation between skill level and labour force participation, with labour force participation rates increasing with education level [1]. Some of the benefits to society of higher participation include reduced poverty and inequality, greater social harmony and reduced crime, as well as lesser burdens on the charitable sector and social welfare budgets, and higher tax receipts to support the provision of government services like education and health [2].

There are three broad groups of strategies where policy change can contribute to improved labour force participation outcomes: those aimed at improving the capacity of people to work through policy measures that improve health, education and training; those enhancing incentives to work, including measures directed at tax and income support arrangements; and those creating more flexible institutional arrangements, including work arrangements and childcare [2].

Ageing will reduce labour force participation. The participation rate is projected to decline from a record high of 66.3 per cent in March 2021 to 63.6 per cent by 2060-61. This reflects the increasing proportion of older people in the population, which is expected to be only partially offset by projected increases in women’s and older people’s participation [3].

References

Treasury. House of Representatives Standing Committee on Employment and Workplace Relations, Inquiry into employment: increasing participation in paid work. (Submission no. 73.) Canberra: Standing Committee on Employment, Workplace Relations and Workforce Participation; 2003.
Productivity Commission (PC). Enhancing labour force participation: issues and challenges, Annual report 2006-07. Canberra: Productivity Commission; 2008.
The Commonwealth of Australia 2021 Intergenerational Report: Australia over the next 40 years.

Notes:

These estimates, from the Small Area Labour Markets - Australia data series [1], are based on the Structure Preserving Estimation (SPREE) methodology which enables the generation of small area estimates of unemployment and labour force participation. They differ from the figures both for people receiving an unemployment benefit (as different rules are applied to eligibility for a welfare payment) and being considered as unemployed in the official labour force statistics produced by the Australian Bureau of Statistics (ABS).

References

National Skills Commission. Small Area Labour Markets - June quarter 2021. Available from: https://labourmarketinsights.gov.au/our-research/small-area-labour-markets-methodology/; last accessed 4 February 2020.

Geography: Data available by Population Health Area, Local Government Area, Primary Health Network, Quintile of socioeconomic disadvantage of area and Quintiles within PHNs, and Remoteness Area

Numerator: People aged 15 years and over participating in the labour force

Denominator: People aged 15 years and over

Detail of analysis: Per cent

Source: Compiled by PHIDU based on data from the Labour Market Research and Analysis Branch, National Skills Commission, June Quarter 2022