Back to Work: Australia

Improving the Re-employment Prospects of Displaced Workers

image of Back to Work: Australia

Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is the fourth in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that many displaced workers get new jobs relatively quickly in Australia, mostly thanks to a flexible and dynamic labour market. A small minority of displaced workers receive special support via the labour adjustment programmes, but some displaced workers who would need specific assistance, in particular in the older worker and/or low-educated groups, do not get sufficient support or only too late. There is room to improve policies by moving away from the current sectoral approach to special assistance programmes for workers collectively dismissed, towards an approach covering all sectors of the economy, with the intensity of intervention tailored to the circumstances and needs of the displaced workers. Expanding the training component for displaced workers and making use of skills assessment and training to better target the training and enhance its effectiveness would also help displaced workers transition to sustainable jobs of a certain quality.



Assessment and recommendations

Job displacement as a consequence of economic restructuring is common in the Australian labour market. Each year, on average during 2002-13, 2.3% of employees with at least one year of tenure lost their job for economic reasons such as corporate downsizing or plant closure. This is a high share relative to other OECD countries with comparable data. The displacement rate surged in 2009 with the global financial crisis (GFC), but fell back to its previous level very quickly. However, with the marked softening of labour market conditions since 2012, the displacement rate increased strongly again in 2013. Some workers are particularly vulnerable to displacement, notably older workers, workers with a low education level and casual workers, as well as workers with short tenure and those employed in small firms.


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error