LABOUR FORCE PARTICIPATION

Increasing the Australian working-age population, lifting labour force participation rates, and raising productivity have been identified by the Australian Treasury as critical in addressing the economic challenges posed by an ageing population (Australian Treasury 2010). While there is an economic incentive to lift labour force participation rates, there are also benefits to the individual. Labour force participation can lead to greater individual wellbeing in terms of financial security, self-esteem and social engagement.

The labour force is simply the number of people who are either employed or unemployed (i.e. looking for and available for work). In 2009, there were, on average, 10.8 million employed people and 638,400 unemployed people. Since the majority of the labour force is made up of employed people (94% in 2009), it holds that changes observed in the proportion of people working (such as the large increase in the proportion of women who are working) are reflected in changes in the labour force participation rate.

Over the last three decades the labour force participation rate of people aged 15 years and over increased from 61% in 1979 to 65% in 2009. For the so-called working age population (people aged 15-64 years) it increased from 69% to 76% between 1979 and 2009.

The increase in labour force participation has been driven by a large increase in the participation of women, from 44% in 1979 to 59% in 2009. In contrast, the participation rate for men decreased from 78% in 1979 to 72% in 2009.

In 2009, about one-third of the population (aged 15 years and over) were not in the labour force, and there are a number of reasons for this. For some people it is because of parental or caring responsibilities. For others it is because they are studying, for their own personal health reasons or because they are retired. However, others may wish to work, but lack affordable (or appropriate) child care. For others, the jobs that are available are unsuitable as they do not have the flexibility to work around their other commitments (such as study or caring). In addition, some people who want to work are discouraged from applying for jobs if there are no suitable jobs that utilise their skills or qualifications available locally, or because they feel that employers see them as too old or too young.