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Key Issues for Raising Labour Market Participation in Australia This Work Is Published Under the Responsibility of the Secretary-General of the OECD

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Key Issues for Raising Labour Market Participation in Australia This Work Is Published Under the Responsibility of the Secretary-General of the OECD Connecting People with Jobs: Key Issues for Raising Labour Market Participation in Australia This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2017), Connecting People with Jobs: Key Issues for Raising Labour Market Participation in Australia, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264269637-en ISBN 978-92-64-26962-0 (print) ISBN 978-92-64-26963-7 (PDF) The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Photo credits: Cover © Sergio77/Shutterstock.com Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm. © OECD 2017 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected]. FOREWORD – 3 Foreword Giving people better opportunities to participate in the labour market improves well-being and strengthens economic growth. Better labour market and activation policies help countries to cope with rapid population ageing by mobilising potential labour resources more fully. Many OECD countries achieved record employment levels prior to the global financial crisis, but in all countries employment rates differ markedly across population groups. High unemployment and the weak labour market attachment of some groups in society reflect a range of barriers to working or moving up the jobs ladder. In many countries the crisis has accentuated long-standing structural problems that are causing these disadvantages. It is a major challenge for policy makers in the coming years to address these problems and make OECD labour markets and, thus, OECD economies more inclusive. Therefore, the OECD Employment, Labour and Social Affairs Committee is carrying out a new set of reviews of labour market and activation policies to encourage greater labour market participation of all groups in society with a special focus on the most disadvantaged, who face the greatest barriers and disincentives to finding work. This includes a series of country studies, Connecting People with Jobs, which provides an assessment of how well activation policies help all groups to move into productive and rewarding jobs and, where appropriate, policy recommendations that could improve the situation. This report on Australia is the third country study published in this series. It has a special focus on better mobilising Australia’s labour resources through identifying Australia’s unmet activation potential, highlighting that multiple barriers to employment might prevent certain population groups to participate more fully in the labour market. Good practice examples from other OECD countries provide insights on the type of policies and measures which could be developed for these population groups. The report was prepared by Kristine Langenbucher, Daniele Pacifico, Christopher Prinz (project leader) and Marieke Vandeweyer, economists in the Directorate of Employment, Labour and Social Affairs of the OECD. Statistical assistance was provided by Dana Blumin and editorial assistance by Gabriela Bejan. The report benefited greatly from discussions with other teams in the Directorate of Employment, Labour and Social Affairs that have worked on previous projects with Australia. CONNECTING PEOPLE WITH JOBS: KEY ISSUES FOR RAISING LABOUR MARKET PARTICIPATION IN AUSTRALIA © OECD 2017 TABLE OF CONTENTS – 5 Table of contents Acronyms and abbreviations .................................................................................................................... 9 Executive summary .................................................................................................................................. 11 Chapter 1. The unmet activation potential of Australia’s labour market ................................... 13 Introduction ............................................................................................................................................ 14 The Australian labour market context .................................................................................................... 14 The employment rate is recovering, but still lags behind its 2008 peak ............................................. 14 Australia has a flexible labour market, but almost a fifth of employees are employed on a casual basis ........................................................................................................... 16 Albeit falling unemployment, the trend in rising long-term unemployed still has to be reversed ...... 17 National averages conceal large variations in labour market outcomes on state and territory level .. 18 Retrenchment rates are high in Australia, but most retrenched workers quickly find a new job ........... 20 How does the labour market situation of specific groups in Australia compare internationally? .......... 22 Untapped potential: Female labour market participation.................................................................... 22 Labour market and education outcomes for Australian youth are better than in most OECD countries.... 27 Room for improvement: Labour market participation of mature age workers ................................... 29 People with a disability have not profited from the positive employment trends............................... 31 People with mental ill-health have poor labour market outcomes ...................................................... 33 Labour force participation of Indigenous Australians is low .................................................................. 35 Key findings ........................................................................................................................................... 37 Notes ....................................................................................................................................................... 38 References .............................................................................................................................................. 39 Chapter 2. Multiple barriers to employment: The facets of joblessness in Australia ................. 43 Introduction ............................................................................................................................................ 44 The Australian population with labour market difficulties .................................................................... 44 Employment barriers in Australia .......................................................................................................... 47 Faces of joblessness in Australia ............................................................................................................ 51 Seven different combinations of employment barriers ....................................................................... 51 An initial interpretation of the results ................................................................................................. 60 Key findings ........................................................................................................................................... 62 Notes ....................................................................................................................................................... 63 References .............................................................................................................................................. 64 Chapter 3. Better mobilising Australia’s underutilised labour resources ................................... 65 Introduction ............................................................................................................................................ 66 An investment approach to labour force participation ........................................................................... 66 Getting the balance right: Improvements to existing activation policies ............................................... 69 Improving long-term employment outcomes for jobseekers .............................................................. 69 Facilitating job-to-job transitions of retrenched workers.................................................................... 72 Aligning mutual obligations for mature age with those for younger jobseekers ................................ 74 CONNECTING PEOPLE WITH JOBS: KEY ISSUES FOR RAISING LABOUR MARKET
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