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NOT IN THE LABOUR FORCE - REASONS FOR NOT PARTICIPATING
Persons not in the labour force, not including persons on long-term unpaid leave

Persons not in the labour force are those who are not employed or unemployed (see Glossary). In September 2010, approximately 16% of people who were not in the labour force were considered to have a marginal attachment to the labour force—that is, if the definition of employed or unemployed were to change, they would be included (ABS 2010). Many of those marginally attached who would like to work could move into the labour force if their availability to start work or labour market conditions changed.

The Workforce Participation and Workplace Flexibility Survey 2010 collected information about people classified as not in the labour force, not including persons on long-term unpaid leave. This information includes whether respondents wanted to start or return to work, and if so, what arrangements would need to be in place to ensure that work fits in with family and social commitments. The survey also collected information on why those who had previously had a job left that employment, and why they were not currently looking for work.

In 2010, Australia’s labour force participation rate was the ninth highest in the OECD (OECD 2011). However for some groups, including older men and women (55 to 64 years) and women of child-bearing age (25 to 44 years), Australia’s rates have been low compared with other developed countries (Abhayaratna and Lattimore, 2006). The OECD has also recognised that people receiving disability benefits face major disincentives to work and that there is scope to increase workforce participation for these people (OECD 2008).

This chapter focuses on sub-groups in the population (older people, women of child-bearing age and those with an illness or caring responsibilities) and looks at their reasons for not participating, and what arrangements would be required to encourage their entry to the labour market.


POPULATION OVERVIEW

In December 2010, there were 610,400 people¹ in Victoria who were not in the labour force and not on long-term leave². In brief:

13% had never worked for pay in any job or business for 2 weeks or longer.

Proportions of people not in the labour force and not on long-term leave² varied with age. The largest proportion of both males (50%) and females (36%) in this group were in the 55 years and over age group. In the 18-24 year age group, there were a larger proportion of males (10%) than females (5.8%). In each of the remaining age groups, there were a larger proportion of females than males. This is consistent with OECD findings that older workers (55 years and over) and females of child-bearing age (25 to 44 years) tend to have lower workforce participation rates (Abhayaratna and Lattimore, 2006).

Figure 1. POPULATION BY SEX AND AGE GROUP
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010

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AREA OF USUAL RESIDENCE

The characteristics of people not in the labour force and not on long-term leave² varied according to whether they lived in Melbourne or the balance of Victoria.

Those who lived in the balance of Victoria were more likely to live in households with an annual equivalised household income of less than $25,000 compared with people who lived in Melbourne (47% compared with 38% respectively). People living in the balance of Victoria were also more likely to live in couple family households with no children (36%) than people in Melbourne (21%).

People not in the labour force and not on long-term leave² who lived in Melbourne were more likely to live in a household with an annual equivalised household income of $110,000 or more than were people living in the balance of Victoria (26% compared with 18% respectively). The most prevalent household/family type for people living in Melbourne was the couple family household with children (51%).

The most common reason that people living in the balance of Victoria left their previous job was due to retirement or because they did not want to work any longer (23% compared with 13% for people living in Melbourne). For people who lived in Melbourne, pregnancy or to have children was the most commonly reported main reason for leaving their previous job (27% compared to 21% for people living in the balance of Victoria).

Males living in Melbourne were more likely to want to return to or start work (44%) than males living in the balance of Victoria (31%). The proportion of females who would like to return to or start work was similar across both regions (41% in Melbourne compared with 43% in balance of Victoria).

People not in the labour force and not on long-term leave² who would like to return to or start work were asked what arrangements would need to be in place to ensure that work fits with family and/or social commitments. Part time work or job sharing was the most commonly reported desired arrangement for both regions of Victoria (52% Melbourne and 42% balance of Victoria).

Figure 2. FLEXIBLE WORKING ARRANGEMENTS NEEDED FOR WORK-LIFE BALANCE(a)(b)
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010


(a) Persons who reported that they would like to return to or start work
(b) Components do not sum to 100% as more than one arrangement could have been reported by the respondent


FUTURE INTENTIONS AND PREVIOUS WORKFORCE HISTORY

Two in five (41%) people not in the labour force and not on long-term leave² would like to return to or start work, with similar proportions for males (40%) and females (42%).

Of those who would like to return to or start work, over half (57%) were aged between 25 and 44 years. People wanting to return to or start work were more likely to be living in a couple family household with children (53%) than in any other household type. People wanting to return to or start work were also most likely to have been out of the workforce for a period of one to five years (33%).

Two in five (42%) people who wanted to return to or start work lived in households with an annual equivalised income of less than $25,000. Nearly three quarters (72%) of the people who would like to return to or start work lived in Melbourne.

Of the 225,000 people who had previously worked for pay and who would like to return to work, females were most likely to have left their previous job due to pregnancy or to have children (42%), whereas males were most likely to have left their previous employment due to own illness, injury, health condition or disability (38%). When the number of females who left their employment due to pregnancy or to have children is removed from the female population, the proportion of females who left their previous job due to own illness, injury, health condition or disability is 24%, which is lower than the proportion of males who left their previous job for this reason (38%).

For those who would like to return to work but were not currently looking for work, the main reason they were not looking for work was due to own ill health, physical disability, injury, pregnancy or to have children (49%). The proportion of males and females who would like to return to work, but who were not currently looking for work due to own ill health, physical disability, injury, pregnancy or to have children were similar (44% for males and 50% for females).

Figure 3. PERSONS WHO WOULD LIKE TO RETURN TO OR START WORK: MAIN REASON NOT LOOKING FOR WORK(a),
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010

(a)	Persons who have previously worked for pay for two weeks or longer
(b)	Includes Employers think too young or too old / Lacks necessary schooling, training, skills or experience / Difficulties with language or ethnic background / No jobs
(c)	Includes returning to studies
(d)	Includes To get married / To have holiday, moved house, spouse transferred / Give others a chance / Welfare payments, pension may be affected / Other family considerations

Half (50%) of the 225,000 people who had previously worked for pay and who would like to return to work reported that the flexible arrangement most required to ensure work fits in with family and/or social commitments was part time work or job sharing. This was followed by flexible start and finish times (26%).

Of the 360,000 people who would not like to return to or start work, 57% were aged 55 years and over. Over one third (36%) of people who do not want to return to or start work had not worked for pay for 10 years or more.

Of the 304,700 people not in the labour force and not on long-term leave², who had previously worked for pay and who did not want to return to work, two in five (40%) were not looking for work due to ill health, physical disability, injury, pregnancy or to have children, with another 38% not looking for work due to retirement or not wanting to or needing to work any longer.

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WOMEN

According to ABS data, since 1978 women's labour force participation rates have been lower than men's participation rates (ABS 2011). One of the reasons for women having lower participation rates is that women are often the primary carer in a household. In 2008, 84% of lone parent households in Victoria had females as the lone parent (ABS 2006).

Findings from the 2010 Workforce Participation and Workplace Flexibility survey show that females were much more likely to not be in the labour force and not on long-term leave² than men (72% compared with 28% respectively). Of those females not in the labour force and not on long-term leave², nearly half (49%) lived in a couple family with children. Almost two in five (39%) females who were not in the labour force and not on long-term leave² lived in a household with an annual equivalised income of less than $25,000.

Females were also more likely than men to have been out of the workforce for 10 years or more (29% compared with 22% respectively).

Figure 4. HOW LONG SINCE LAST WORKED FOR PAY
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010


(a) Never worked in a job or business for 2 weeks or more


Females in households with children aged 0 to 4 years were more likely (37%) to have not worked for pay for one year to less than five years than those in households with no children aged 0 to 4 years (22%).

The main reason females who had previously worked for pay left their last job differed by household and family type. For females living in a couple family with children, the highest reported reason for leaving their previous job was due to pregnancy / to have children (98,300). For those in a couple family with no children, the most common reasons for leaving their last job were because they had retired or did not want to work any longer (31,600), followed by own illness, injury, health condition or disability (20,500).

Figure 5. FEMALES: MAIN REASON LEFT PREVIOUS JOB(a)
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010

(a)	Persons who have previously worked for pay
(b)	Includes Job was temporary or seasonal / Holiday job / Unsatisfactory work arrangements, pay, hours / Own business sold or closed down
(c)	Data for Couple family with no children not available for publication
(d)	Includes To get married / To have holiday, moved house, spouse transferred / Returned to studies / Other

Of females not in the labour force and not on long-term leave², two in five (42%) reported they would like to return to or start work. The proportion aged 25 to 34 and 35 to 44 years who wanted to return to or start work (58% and 63% respectively) was higher than the proportion aged 45 to 54 (44%) and 55 years and over (16%).

Females who were in a couple family with children were more likely to not want to return to work (78% compared with 22% who would like to return to work). In contrast, couple families without children had similar proportions of females who would either like to or not like to return to work (48% and 52% respectively).

For females not in the labour force and not on long-term leave² who would like to return to or start work, the most frequently reported main reason for not looking for work was own ill health, physical disability, pregnancy or to have children (50%). Females who did not want to return to or start work also reported this as their main reason (40%), followed closely by retirement or not wanting or needing to work any longer (35%).

For both male and female respondents who would like to return to or start work, the most commonly reported working arrangements required to ensure that work fits in with family and/or social commitments were part time work or job sharing (49%). Nearly one in five people (18%) reported a need for child care facilities available in or near the workplace or the availability of appropriate child care.

Figure 6. FLEXIBLE WORKING ARRANGEMENTS NEEDED FOR WORK-LIFE BALANCE(a)(b),
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010


(a) Persons who reported that they would like to return to or start work
(b) Components do not sum to 100% as more than one arrangement could have been reported by the respondent

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OLDER PEOPLE

The proportion of Victorians aged 55 years and over is expected to increase from 25% in June 2010 (ABS 2010 b) to 34% in June 2050 (ABS 2006 to 2101). In 2008, Australia’s mature age participation rate was 59%, which was higher than the OECD average (56%) but lower than other developed countries including United States, United Kingdom, Canada and New Zealand (Commonwealth Treasury 2010).

The largest proportion of males and females not in the labour-force and not on long-term leave² was in the 55 years and over age group (Note, the 55 years and over age group excludes people aged 65 years and over who were permanently not intending to work). Of males not in the labour force and not on long-term leave², half (50%) were aged 55 years and over. Just over one third (36%) of the females were in the 55 years and over age group.

Three in five (62%) people aged 55 years and over (excluding those aged over 65 years and permanently not intending to work) had not worked for pay for the last five years or longer. For people aged 55 years and over, the most commonly reported main reason for leaving their previous job was due to being retired or not wanting to work any longer (33%). Nearly half (45%) of the people in the 55 years and over age group reported that they were not currently looking for work due to retirement or not wanting or needing to work any longer.

Figure 7. PERSONS AGED 55 YEARS AND OVER: MAIN REASON NOT LOOKING FOR WORK(a),
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010

(a)	Persons who have previously worked for pay for two weeks or longer
(b)	Includes Employers think too young or too old / Lacks necessary schooling, training, skills or experience / Difficulties with language or ethnic background / No jobs
(c)	Includes returning to studies
(d)	Includes To get married / To have holiday, moved house, spouse transferred / Give others a chance / Welfare payments, pension may be affected / Other family considerations

Of people aged 55 years and over, only 15% would like to return to or start work. The majority of these people (57%) reported that if they were to return to or start work, the flexible arrangement required to ensure that work fits in with family and/or social commitments would be part time work or job sharing.

Figure 8. PERSONS AGED 55 YEARS AND OVER: FLEXIBLE WORKING ARRANGEMENTS NEEDED FOR WORK-LIFE BALANCE(a)(b),
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010


(a) Persons who reported that they would like to return to or start work
(b) Components do not sum to 100% as more than one arrangement could have been reported by the respondent


PERSONS WITH AN ILLNESS³ OR CARING RESPONSIBILITIES⁴

Disability policy has emerged as a key economic policy area in most OECD countries, with disabling health conditions on the rise among working-age people (OECD 2010). In 2010, the Australian employment rate for people with a disability or other health problems was 40%, which was low compared with other OECD countries (OECD 2010 b).

Nearly a third (30%) of people not in the labour force and not on long-term leave ² left their previous job due to illness³ (21%) or because of caring responsibilities⁴ (9%).

Males were more likely than females to have left their previous job due to illness³ (33% compared with 17% respectively), whereas a similar proportion of males (7%) and females (10%) left their previous job due to caring responsibilities⁴.

Of the people who left their previous job due to illness³, 49% were aged 55 years and over, and another 23% were aged 45 to 54 years. Similarly, of those who left their previous job due to caring responsibilities, 47% were aged 55 years and over, followed by 24% aged 45 to 54 years, and 21% aged 35 to 44 years.

People who had not worked for pay for 10 years or more were more likely to have left their previous job due to illness³ (27%) than people who had not worked for pay less than one year (11%).

Similar proportions of people who left their previous job either due to illness³ or to caring responsibilities⁴ would like to return to or start work (40% and 43% respectively).

Of those who left their previous job due to illness³ and would like to return to work, the most commonly reported arrangement required to ensure that work fits in with family and/or social commitments was part time work or job sharing (39%).

For people with caring responsibilities⁴ who would like to return to work, the most commonly reported flexible arrangements required were part time work or job sharing (48%), followed by flexible start and finish times (36%).

Figure 9. PERSONS(a) WHO LEFT PREVIOUS JOB DUE TO ILLNESS(b) OR CARING RESPONSIBILITIES(c): FLEXIBLE WORKING ARRANGEMENTS NEEDED FOR WORK-LIFE BALANCE(d)(e),
Persons not in the labour force, not including persons on long-term unpaid leave, Dec 2010


(a) Persons who have previously worked for pay
(b) Illness includes ‘own illness/injury/health condition/disability’
(c) Caring responsibilities includes ‘to look after family/house/someone else’
(d) Persons who reported that they would like to return to or start work
(e) Components do not sum to 100% as more than one arrangement could have been reported by the respondent

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Footnotes

¹ Excluded from the scope of this survey are: