RDP 2010-04: Employment Composition: A Study of Australian Employment Growth, 2002–2006 6. Conclusion

Data from the HILDA Survey confirm that employment tends to broaden during an expansionary phase. Using estimates of an econometric model describing the probability of being employed versus not employed, we find that from 2002 to 2006 there was some broadening of employment across individuals who were low-skilled or had other characteristics typically associated with low participation in the labour market. While this change is not statistically significant, there is clear evidence of a broadening of employment when we conduct the analysis after separating those who are not employed into three different groups, namely: those who are marginally attached, those who are not in the labour force and those who are unemployed. There is evidence of a statistically significant change in the relationships between personal characteristics and the probability of being marginally attached; the same is true for those not in the labour force. In particular, the probability of being in one of these two states (versus being employed) was significantly lower in 2006 than in 2002 for individuals having characteristics that are typically associated with a low level of labour supply (such as being over 55 years of age or a partnered woman with young children). This result indicates an increase in the relative employment rates of these types of people over this period of strong employment growth. In contrast, a change was not noted in the characteristics of people in unemployment, which were broadly similar in both years. One implication of these results is that it is worth looking beyond the unemployment rate when considering the capacity of employment to expand during a period of strong labour demand.