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Youth unemployment statistics: a quick guide



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ISSN 2203-5249

RESEARCH PAPER SERIES, 2015-16 UPDATED 9 DECEMBER 2015

Youth unemployment statistics: a quick guide Penny Vandenbroek Statistics and Mapping Section

Introduction This guide provides a brief overview of youth unemployment, an introduction to the key concepts and terminology used, and lists relevant data sources. This is one in a series of statistical quick guides related to labour statistics, designed to provide a basic understanding of the Australian labour market data. Other guides include labour force, unemployment and employment, which are available from the Parliamentary Library website.

In the labour force framework, unemployed people form part of the currently active population, who, along with the employed, constitute the labour force. Young unemployed people are a sub-set of the unemployed (see diagram below).

Labour force framework

Source: ABS, Labour Statistics: Concepts, sources and methods, 2013, cat. no. 6102.0.55.001

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Who are unemployed people? The International Labour Organization (ILO) describes unemployed people as those who are: without work; currently available for work; and deliberately seeking work. The concept of ‘without work’ is used to distinguish unemployed people from the employed.

How is youth unemployment measured? The Australian Bureau of Statistics (ABS) conducts a monthly Labour Force Survey. This household survey is designed to produce key estimates of unemployment (and employment) from a sample of approximately 56,000 people. The survey’s definition of unemployment closely aligns with international standards and guidelines.

Unemployed persons are defined as all persons aged 15 years and over who were not employed during the reference week and: • had actively looked for work and were available to work (in the reference week), or • were waiting to start a new job. Young unemployed people are those classified as unemployed according to the above definition and aged 15 to 24 years.

More information on the measurement of unemployment is available from the ABS.

Young unemployed Young unemployed people are a sub-set of the unemployed. Age groupings are applied to people classified as unemployed to form the population of interest. Youth unemployment generally refers to people aged 15 to 24 years, but may apply to any age cohort within this span. Depending on the schooling structure and retention of young people in education, the age group of interest may vary. For example, where young people usually look for full-time work after completing high school, the unemployment rate of those aged 15 to 19 years is likely to be useful. However, where young people generally stay on at school, completing further studies and then seek full-time work, the unemployment rate of those aged 20 to 24 years may be more useful. For comparisons of youth unemployment between countries, the ILO generally uses unemployed people aged 15 to 24 years.

Young people may undertake a complex range of work and study arrangements, making them a difficult segment of the labour market to analyse. Young people studying part-time may combine their studies with some work (generally part-time), and others may be studying full-time and not working at all (nor actively looking for work). However, the seeking of full-time work by a young person typically indicates that they want to start a career, to gain on-the-job training and to achieve some form of independence.

What are the key measures? The number of young unemployed people (head count)

Each month the ABS estimates the total number of unemployed people, releasing trend, seasonally adjusted and original data. Graph 1 (on the next page) shows changes in the number of unemployed people aged 15 to 24 years from the start of the data series until the most recent period. Data for people aged 15 to 19 years is also available (see Labour Force, detailed - electronic delivery, cat. no. 6291.0.55.001).

The level of youth unemployment is subject to fluctuations throughout the year, particularly around peak times of education commencement or conclusion. Trend and seasonally adjusted estimates aim to account for these types of variations. If original estimates are to be used, care should be taken when analysing any month-to-month, or period-to-period changes.

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1. Young unemployed people (15 to 24 years) - trend

Source: ABS, Labour force, September 2015, cat. no. 6202.0

Youth unemployment rate The rate is the number of young unemployed people expressed as a proportion of the labour force (in the same age group). This measure is applied in the same way as the general unemployment rate. The rate is subject to some criticism, being thought of as too simplistic to reflect the complex work/study situations that often apply to young people. Altshuler, Hill, Philpott, Matlack and others suggest that the use of the rate can lead to misinterpretation of the state of young people’s unemployment as it does not account for the high proportion of people currently in education or training. Those studying, who are not working nor actively seeking work, are excluded from the labour force. It is therefore suggested that the youth unemployment ratio be used as an alternate or additional measure (see the next segment).

2. Youth unemployment rate (15 to 24 years) - trend

Source: ABS, Labour force, September 2015, cat. no. 6202.0

Youth unemployment ratio The ratio is the number of young unemployed people expressed as a proportion of the civilian population (in the same age group). The ratio differs from the rate as it accounts for the whole population of young people not solely those in the labour force (i.e. employed or unemployed). The ratio helps to provide an indication of young peoples’ unemployment experiences, which are often complicated by transitions into and out of education and work. Graph 3 provides the youth unemployment ratio for people aged 15 to 19 years and 20 to 24 years from the start of the data series until the most recent period.

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3. Youth unemployment ratio - original

Source: ABS, Labour force, detailed - electronic delivery, September 2015, cat. no. 6291.0.55.001

Extended measures of youth unemployment Specific criteria can be applied to the youth population to account for their different job seeking, work and study scenarios. Extended measures of youth unemployment can be created using the following types of variables:

• ‘full-time’ (e.g. looking for full-time work or working full-time) and

• ‘educational attendance’ (e.g. studying full-time or part-time, or not studying at all).

Youth full-time unemployment rate This measure is the number of young unemployed people looking for full-time work as a proportion of the youth full-time labour force (in the same age group). The labour force therefore excludes young people who are looking for part-time work and those who are employed part-time.

Youth unemployment/fully active ratio A useful variable for assessing estimates of youth unemployment is ‘educational attendance’. This variable indicates a person’s involvement in study or training, and can be combined with their labour force status to analyse a variety of study/work scenarios. In this instance, educational attendance is used to identify young people who study full-time or part-time, so that an adjustment can be made to both the unemployed and labour force populations. The ratio is, therefore, the number of unemployed youth who are not studying full-time as a proportion of the youth labour force plus those who are studying full-time. Original data are available each month from the ABS for young age groups, see ‘Sources of ABS labour force data on young people’.

Other measures

Ratio of youth-to-adult unemployment rates This measure is the difference between the youth unemployment rate and the adult unemployment rate. The youth population is people aged 15 to 24 years, and adults are those aged 25 years and over. The ILO suggests that where the unemployment rates are closer together (e.g. a ratio of 2), unemployment is generally considered to be a problem for the whole population. Where the ratio is 3.5 or higher, young people are thought to be disproportionately impacted by unemployment. In Australia, over the past 10 years the ratio has varied from 2.7 to 3.1, and in 2014-15 was sitting at 2.9 (annual average). Cross country comparisons are available from the ILO in Key Indicators of the Labour Market (KILM), 8th edition, Chapter 10 - Youth unemployment.

Share of unemployed youth in total unemployment This measure expresses the number of young unemployed as a proportion of all unemployed people. It can be used to provide an indication of the degree to which unemployment is a youth-specific problem, rather than a general problem. It is generally used as part of a suite of indicators, rather than as a stand-alone measure. Graph 4 provides young unemployed people (15 to 24 years) as a proportion of total unemployed (15 years and over) from the start of the data series until the most recent period. Data for people aged 15 to 19 years is also available (see Labour Force, detailed - electronic delivery, cat. no. 6291.0.55.001).

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4. Unemployed youth (15 to 24 years) as a proportion of total unemployed - original

Source: ABS, Labour force, detailed - electronic delivery, September 2015, cat. no. 6291.0.55.001

Sources of ABS labour force data on young people

Unless otherwise noted, estimates are for the original series.

Labour force, cat. no. 6202.0, time series spreadsheets:

13. Labour force status for 15-24 year olds by sex - trend, seasonally adjusted and original

15. Labour force status for 15-24 year olds by educational attendance (full-time) and sex

16. Labour force status for 15-24 year olds by state, territory and educational attendance (full-time)

17. Labour force status for 15-19 year olds by sex - trend, seasonally adjusted and original.

Labour force, detailed - electronic delivery, cat. no. 6291.0.55.001, time series spreadsheets:

01. Labour force status by age, social marital status and sex

03. Labour force status for 15-24 year olds by age, educational attendance (full-time) and sex and by state, territory and educational attendance (full-time).

Data cubes providing more detailed estimates by age, include:

LM1. Labour force status by age, greater capital city and rest of state (ASGS), marital status and sex

LM3. Labour force status for 15-24 year olds by age, educational attendance (full-time), sex and year left school

LM5. Labour force status by age, major country group (subcontinent) of birth (SACC), sex, state and territory

UM3. Unemployed persons by age and duration of job search

RM1. Labour force status by age, labour market region (ASGS) and sex.

Regional data Regional estimates of unemployment by age are released by the ABS in Labour force, detailed - electronic delivery, cat. no. 6291.0.55.001, see Data Cube RM1. This release provides data for the smallest geographic areas available (excluding the Census). Data is from the original (unadjusted) series and due to the small sample sizes the sampling errors with some estimates may be quite high.

Statistical Area Level 4 (SA4)

Statistical Area Level 4 regions are designed for the dissemination of labour force estimates and to reflect labour markets within each state and territory. They cover 87 spatial areas across Australia. For more information see Australian Statistical Geography Standard (ASGS): Volume 1 - Main structure and Greater capital city statistical areas, July 2011, cat. no. 1270.0.55.001 (Main Structure > Statistical Area Level 4 (SA4)).

The Parliamentary Library’s Small Area Labour Market Data webpage provides estimates of unemployment and employment for the total labour force (15 years and over) and youth labour force (15 to 24 years) by ABS labour market regions.

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Other data sources The ABS is also responsible for collecting and disseminating results from the five-yearly Census of Population and Housing. The Basic Community Profile series provides selected labour force data for small statistical areas (e.g. Commonwealth and State Electoral Divisions), including male and female unemployment rates, and whether a person was looking for full-time or part-time work. Estimates are available by age groups, including 15 to 19 years and 20 to 24 years. Note: data relating to Commonwealth Electoral Divisions in Victoria and South Australia reflect the boundaries at the time of the 2010 Federal Election. For more information see ABS, Statistical Geography Fact Sheet, Commonwealth and State Electoral Divisions.

The Department of Social Services publishes information on Newstart and Youth Allowance recipients in the publication Labour market and related payments monthly profile. Table 1 provides time series figures for Youth Allowance recipients by type of payment (e.g. full-time students, apprentices) and Table 6 provides figures for short-term and long-term job seekers receiving Newstart Allowance by age and sex. Note that the figures vary to those released by the ABS due to differing methodologies in calculating ‘unemployed’ persons.

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