Monday, January 15, 2007

Flowering-arranging the unkillable weed – reporting Australian workforce participation rates

As I’ve previously written, Australia has an appallingly low labour-force participation rate for men aged 25 to 44; i.e. mainly, but not exclusively Xer men. Fully 9% slip through the cracks; albeit a small number of these would be at-home dads. (The officially unemployed, meanwhile, are part of the 91%). In 1980, only 4% of this male age cohort were NILFs.

Last week, the Productivity Commission published a report (PDF) on Australia’s workforce participation rates vis a vis OECD averages and rankings. The report itself does a pretty good job of burying the worst of the bad news:

Over the period 1980 to 2005, the overall workforce participation rate for males declined from 78.3 to 72.1 per cent. There was, however, variable changes in participation rates across the age groups. The largest decline occurred in the 55 to 59 age group — a decline of 7.5 percentage points, whereas for men aged between 60 and 64 years, participation increased by 3.1 percentage points.

In fact, a glance at figure 2.4 of the Report shows an overall quite even decline, between 1980 and 2000, for men in all age groups between 15 and 59. But never mind that: by widening the five-year age sliver of the “winning” 55 to 59 age group to an amorphous, but boomer-centric, “over 50”, the PC manages to be PC: thus it trots out the old rustbelts’n’early-retirement explanation for male labour-force participation decline, one that doesn’t even begin to explain the shocking plight of Xer men:

Factors underlying the trend toward lower participation rates in men over 50 include:

• slower employment growth in industries traditionally employing full-time male workers, such as utilities, mining and manufacturing industries; and

• a trend towards early retirement, although since 2002 there has been some moderation in the decline

What the PC started, the media finished, a la the Oz’s Samantha Maiden further burying the plight of Xer men. In preparing her article on the PC Report, Maiden apparently wholly missed the part (= half) dealing with men, despite the comparative OECD stat for men aged 25 to 54* ranking worse – 23 (25) out of 30 – than the stat she chose to zoom in on: participation among women aged 25-44 years, for which Australia’s comparative OECD stat is 20 (23) out of 30. (Figures in brackets are the “unadjusted” ones from Chapter 3 of the Report; while the first-given ones are those “adjusted” as found in Chapter 5. For whatever reason, Maiden cites only the unadjusted (= direr) one in her mono-gendered analysis.)

My beef with Maiden isn’t just a gender-balance, “what about the blokes?” thing. The gendered stat she chooses to focus on is also tiresomely explicable and predictable. Australian social security is (or was until very recently) comparatively very generous to single parents, in terms of age of youngest child at which the recipient parent must start to look for work (until recently 16, while OECD norm is 6). Australia’s participation black-hole among women aged 25-44 years is now being fixed, then – and it was only ever a natural byproduct of social security largesse.

In contrast, Australia’s participation black-hole among men aged 25-44 years has no apparent connection with social security largesse, and shows little sign of even being acknowledged as a problem, let alone fixed.

* The PC Report doesn’t give further breakdowns within this age range for men. My guess is that this is because the 45-54 (boomer) male cohort is actually doing relatively well (despite the supposed travails of the “over 50s”). By lumping these in with Xer men, the averages are therefore brought up; aka the Xer abyss is papered over.

Long term unemployed men shifting from the dole to the Disability SUpport Pension may be one factor in the decline in participation -- there has been a significant increase in the number of men receiving the DSP over this time period, and these men are not participating in the workforce.

FYI, the PC have a report coming out some time soon on male nonparticipation.
male non participation
The upcoming ("Jan 2007") PC report (which I didn't know about) should be interesting reading. So thanks for the tip, Gringo.

The LTU-transferring-onto-the-DSP point is a well-worn one, especially a la the "over 45s/50s/55s"). While indeed older men dominate DSP recipients, as I've previously noted , there is a striking mini-peak in DSP recipients among those born 1962-1965. Conversely, there are almost no DSP recipients who were born in 1960 or 1961. (“Budget to reduce disabled, sole parent benefits” (Graph) AFR 13 April 2005).

Is this an instance of social security largesse (unofficially) targeted at Xer men? I doubt it, but I'd love to hear a plausible explanation of the phenomenon.
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