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Connecting People with Jobs: Key Issues for Raising Labour Market Participation in Australia

image of Connecting People with Jobs: Key Issues for Raising Labour Market Participation in Australia

Giving people better opportunities to participate actively in the labour market improves well-being. It also helps countries to cope with rapid population ageing by mobilising more fully each country’s potential labour resources. Weak labour market attachment of some groups in society reflects a range of barriers to working or moving up the jobs ladder. This report on Australia is the third country study published in a series of reports looking into strategies to encourage greater labour market participation of all groups in society with a special focus on the most disadvantaged. Labour market and activation policies are well developed in Australia. However, the gap in employment rates is still considerable for some groups of the population, including women with young children, disadvantaged youth, people with disability, people with mental health problems and the indigenous population. This report discusses the size of the gap and the - often multiple - barriers underlying low labour market participation of these groups, and it provides a non-exhaustive number of good practice policies and measures from other OECD countries which could guide Australia's policy development in the coming years.

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The unmet activation potential of Australia's labour market

Australia’s labour market has performed well over the past 15 years and its labour force participation rate continuously increased over this period and ranks well above the OECD average. While Australia was impacted less by the global financial crisis than most other OECD countries, the commodity price bust led to a deterioration of the labour market and it only started to recover as of 2015. Not all of Australia’s states and territories and sub-regional levels have recovered to the same degree and retrenchments due to economic reason have again increased over the past years. Furthermore, the chapter identifies some unmet activation potential more generally in Australia’s labour market. Mobilising this potential in the future will bring Australia’s labour force participation closer to that seen in the OECD’s vanguard countries. Areas of untapped potential are especially prime-age women, mature age workers, people with disabilities and mental health conditions, as well as Indigenous Australians.

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