Workforce participation turbo-charged by COVID-19 but those aged 18-24 still most likely to be unemployed

A new way of looking at employment – that recognises not everyone is ‘in the workforce’ (employed or looking for work) reveals employment is increasingly more likely with each successive age group peaking at 81% of those aged 35-49 before declining after that as Australians enter retirement.

In contrast, unemployment is most common for younger Australians aged 18-24, 17% of whom were unemployed in January followed by people aged 14-17, 13% of whom were unemployed.

Clearly each age group is dealing with different challenges and motivations as we progress through life with younger Australians aged 14-17 far more likely to be students than any other age group while a large majority of people aged 65+ (86%) are retired.

Traditional employment and unemployment statistics consider only the workforce, but that excludes nearly a third of Australians who aren’t a part of the workforce at all and may be studying, retired, on home duties, or none of the above and just not working.

Overall, just over two-thirds of Australians (68%) were a part of the workforce of 14.4 million in January including 60% who were employed and a further 8% unemployed. As a proportion of the workforce (8% unemployed divided by 68% in the workforce) that equates to an unemployment rate of 11.7% in January.

The Australian workforce participation rate has been near record highs of around 68% in recent months as Australia emerges from the worst of the COVID-19 pandemic. This compares to an average participation rate from 1999-2003 of around 60% and an average of 66% from 2018-2019.

Click here for detailed information on Roy Morgan’s latest January unemployment estimates.

Just under a third of Australians (32%) were not a part of the workforce in January including 21% who were retired, 4% who were students, 4% on home duties and a further 3% who don’t work.

Work status by age group – January 2021

Source: Roy Morgan Single Source January 2021, n=6,086. Base: Australians 14+.

Workforce participation is highest amongst Australians across the three age groups aged 18-49

Overall, 89% of people aged 18-24 are in the workforce (72% employed and 17% unemployed), 88% of people aged 25-34 are in the workforce (78% employed and 10% unemployed) and 88% of people aged 35-49 are in the workforce (81% employed and 7% unemployed).

Workforce participation drops to 71% of people aged 50-64 (63% employed and 8% unemployed) and only 12% of people aged 65+ (11% employed and 1% unemployed).

Just over half (58%) of young Australians aged 14-17 are in the workforce including 45% who are employed and 13% who are unemployed. Those who are reported as either employed or unemployed in this age group are almost all students as well but are students who have a part-time job or are looking for work. The 42% of people in this age group who are reported as students are not a part of the workforce.

Of 6.8 million Australians not in the workforce, most are retired and aged 65+

Workforce participation drops off after the age of 50 and 29% of Australians aged 50-64 aren’t in the workforce being either retired (19%), not working and not looking for a job (6%) and a further 4% on home duties.

The great majority of 86% of Australians aged 65+ are retired. This is a large cohort of Australians numbering some 3.6 million – and represents over half of all people not in the workforce.

This leaves 12% of Australians aged 65+ who are in the workforce and a further 1% who are on home duties and 1% who don’t work and aren’t looking for a job.

Michele Levine, CEO Roy Morgan, says a workforce participation rate of 68% hides the big differences between different age groups with participation at nearly 90% for some age groups: