Employment and unemployment

Employment underpins the economic output of a nation and enables people to support themselves, their families and their communities. It is also tied to physical and mental health and is a key factor in overall wellbeing. 

In trend terms for people aged 15 and over, in June 2025:

• employment rate was 64.2% (or 77.2% for people aged 15–64)
• unemployment rate was 4.2%
• underemployment rate was 5.9%
• labour force participation rate was 67.0% (or 80.6% for people aged 15–64) (Figure 1).

Unless otherwise stated, measures of participation in the labour market, employment, unemployment, and underemployment are sourced from the Australian Bureau of Statistics (ABS) Labour Force Survey (LFS; ABS 2025a, 2025b). It includes data from 1978, when this LFS commenced, up to June 2025 unless otherwise stated.

The trends in the employment rate and the labour force participation rate are presented for people aged 15 to 64, as when monitoring longer-term trends it is important to account for the size of the population, given the growth in the population aged 65 and over in recent decades. The trends for unemployment and underemployment rates are presented for people aged 15 and over. Working from home and the analysis of employment and health are sourced from 2001–2023 Household, Income and Labour Markey Dynamics in Australia (HILDA) Survey.

Trends in labour force measures

The employment rate has steadily increased over the last 50 years and is still at record highs in June 2025

In trend terms, the employment rate in Australia has steadily increased since the current LFS series began in 1978, from 64.4% in February 1978 to record highs of 77.4% in December 2024 (Figure 1). Since then it has remained similar at 77.2% in June 2025. Despite the increases in the employment rate, people were not always able to work the hours they wanted, with the underemployment rate also gradually increasing from 2.5% to 8.6% between February 1978 to March 2020 – it has since declined to 5.9% which is similar to the low rates 17 years ago. Meanwhile, the unemployment rate declined from 6.3% in February 1978 to 4.2% in June 2025, still above the 3.5% in September 2022 – the lowest rate in almost 50 years. 

As shown in Figure 1, the long-term labour market trends between 1978 and 2025 have been largely driven by the higher levels of employment among females and their higher participation rates: 

• Participation rates increased from 50.2% to 77.5% for females while dropping from 87.1% to 83.8% for males.
• Female employment rates increased from 46.0% to 74.4%, while declining from 82.4% to 80.0% for males.
• Female unemployment rates halved from 8.0% to 4.0%, compared with a smaller drop from 5.4% to 4.4% for males.
• The underemployment rates have increased for both males and females although have been consistently higher for females than males over this period, rising from 4.1% to 6.9% for females and from 1.6% to 5.1% for males. 

Part-time employment has also been increasing from 14.9% to 30.0% of employed Australians working part time between February 1978 and June 2025. This growth of part-time employment is largely driven by increases for males from 4.6% to 19.0%, compared to smaller increases for females from 33.7% to 41.8% (Figure 1).

In addition, the labour market has been particularly strong in recent years due to strong labour demand and labour shortages associated with post-COVID-19 pandemic recovery. In 2022–2024, 1 in 3 occupations experienced shortages nationally – 31% in 2022, 36% in 2023, 33% in 2024 (Jobs and Skills Australia 2023, 2024). 

The longer-term increase in employment since 1978 has occurred despite employment falling during the recessions in the early 1980s and 1990s and the economic downturns that followed the 2008–09 Global Financial Crisis (GFC) and the COVID-19 pandemic in 2020. The recovery following the COVID-19 pandemic has been much quicker than the recoveries from previous recessions and economic downturns as it did not require a market recovery unlike previous recessions. This is shown by the V-shaped recovery in Figure 1 – a steep decline in the employment rate from 74.2% in March 2020 to 70.9% in April 2020 (largest monthly fall on record) followed by a steep rise to previous peak of 74.4% in March 2021 (based on seasonally adjusted data). A similar steep increase and quick recovery was also observed for the seasonally adjusted underemployment rate (Figure 1). 

For further details on how the pandemic affected employment and underemployment (including part-time and casual employment) in the early months of 2020 until March 2023, see Australia’s welfare 2023: data insights article Employment and income support following the COVID-19 pandemic.

People aged 55–64 had the fastest growth in employment rates, while growth was slowest for those aged 15–24

The employment rate has increased for all age groups since the current LFS began in 1978 (Figure 2).

Among the working-age population, employment rates were lowest for people aged 15–24 and 55–64 (63.6% and 67.3%, respectively, compared with 83.6–85.9% for the other age groups in June 2025). However, these 2 age groups had the slowest and fastest growth in employment rates over the last 50 years reflecting these age groups transitioning into and out of work (Figure 2). Between June 1978 and June 2025, the growth in employment rates was:

• fastest for the 55–64 age group – 21.8 percentage point increase from 45.5% to 67.3%. This reflects the increasing retirement age and more Australians of this age remaining in the workforce for longer (see Income support for the working age population).
• slowest for the 15–24 age group, increasing by 2.5 percentage points from 61.1% to 63.6% (compared with increases of 11.9–15.8 percentage points for other age groups). The slower growth for the 15–24 age group may reflect delayed entry into the labour market due to more people under 24 remaining in education/training over the last few decades (ABS 2024a: Table 4).

Monthly hours worked gradually increased to record highs in June 2025, following the largest monthly fall in April 2020

Another way to understand changes in employment is to examine monthly hours worked. This measure may highlight the impact of a recession or economic downturn on the labour market before it is reflected in changes to the employment rate; reducing hours worked during an economic downturn is often an early response by businesses to minimise people losing their jobs.

Historical trends in monthly hours worked are generally consistent with trends in the employment rate. In line with recent record highs in employment rates, the number of hours worked in June 2025 was the highest since the current LFS started in 1978, including 12% higher than in March 2020 (at the start of the COVID-19 pandemic), as shown in Figure 1.  

Figure 1: Trends in labour force measures, by sex, 1978 to 2025 

Figure 2: Employment, underemployment and unemployment rates, by age, 1978 to 2025 

Duration of unemployment

A period of unemployment can be a short-term transition between jobs, a long struggle to find work, or something in between. Long-term unemployment can detrimentally affect a person’s financial resources and their job prospects (Cassidy et al. 2020).

Of the 641,000 unemployed people aged 15 and over in June 2025:

• 78% (or 500,000) had been looking for work for less than 1 year
• 12% (or 76,100) had been looking for work for 1–2 years
• 10% (or 64,900) had been looking for work for 2 or more years (ABS 2025b: Table 14a).

Underutilised labour supply

In February 2025, of the 7.7 million people not employed, over 2 in 3 (69% or 5.3 million) did not want to work and almost 1 in 10 (9.3% or 719,300) were permanently unable to work (not potential workers; ABS 2025c: Table 1). The main activities reported of people who did not want to work were retirement (61% or 3.2 million), attending an educational institution (11% or 597,100), duties around the home (10% or 507,100), or ill health or disability (6% or 322,200; ABS 2025c).

Of the 7.7 million people not employed, 1.7 million (21%) wanted to work (referred to as potential workers). Of these potential workers, 608,800 (37%) looked for work, 271,900 (17%) had a job to go to or return to, 769,400 (47%) did not actively look for work (ABS 2025c: Table 1).

Not engaged in education, employment or training

Young people (aged 15–24) who are not in employment, education or training (known as NEET) face considerable challenges that can impact their long-term wellbeing and contribute to future unemployment, lower incomes and employment insecurity (Pech et al. 2009).

In May 2024, 8.5% (288,000) of people aged 15–24 were NEET, slightly higher than in 2023 (7.7%) and 2022 (7.6%) but lower than in 2015–2019 (average of 9.0%; ABS 2024a).

Working from home

The COVID-19 pandemic resulted in a number of changes to working arrangements, many of which are still in place and are likely to remain in the future in some capacity – working from home is one example.

1 in 3 employed people work some of their hours from home since 2020

In 2023, 36% of employed people worked some hours from home (Figure 3). Before the COVID-19 pandemic, the prevalence of working from home was relatively stable, as on average, 25% of employed Australians worked some hours from home between 2001 and 2019. Following the lockdowns and restrictions in the early months of the pandemic to contain the spread of the coronavirus, the proportion of employed Australians working from home increased to 36% in 2020 and 39% in 2021, and remained at 36% in both 2022 and 2023.

1 in 5 employed people worked all hours from home in 2021 but this fell to 1 in 14 by 2023

As shown in Figure 3, the proportion of employed Australians working all hours from home increased fourfold from an average of 4.4% in 2002–2019 to 16% in 2020 and 19% in 2021. Post-COVID-19 pandemic, this proportion declined to 8.5% in 2022 and 7.0% in 2023.

Hours worked from home increased between 2019 and 2023

Among people who work from home, the number of hours worked from home has increased between 2019 and 2023:

• average hours per week worked from home increased from 11 to 18 hours
• the average proportion of total hours worked from home increased from 33% to 50%.
  

Figure 3: Proportion of employed Australians working from home, hours worked from home and satisfaction with work-life-balance, from 2001 to 2023, HILDA Survey 

People living in cities, in more advantaged socioeconomic areas, with higher levels of education or working in specific occupations were more likely to work from home in 2023

In 2023, similar proportions of males (35%) and females (36%) worked some hours from home. Middle aged and older people were more likely to be working from home, including people aged 35 to 49 (46%), aged 65 and over (40%) and aged 50 to 64 (38%). Further, some occupations are more conducive to working from home than others. In 2023, managers, professionals and clerical and administrative workers were the most likely to be working some hours from home (60%, 55% and 43%, respectively), while machinery operators and drivers, and labourers were the least likely to be working from home (4.4% and 6.4%, respectively) (Figure 3).  

After accounting for socio-demographic characteristics and occupations, estimates from logistic regressions confirm that people working in certain occupations and people aged 35 and above are more likely to work from home (Figure 4), consistent with the above-mentioned results. In addition, people were more likely to work some hours from home in 2023 if they:

• had a university qualification relative to those without a university qualification (odds ratio 1.3)
• lived in cities compared to people in regional and rural areas (odds ratio 1.4)
• lived in areas with higher socioeconomic advantage (odds ratio 2.0 for areas with the most advantage (quintile 5) relative to areas with the most disadvantage (quintile 1)).

While patterns in 2019 were generally similar to 2023, there has been a shift in the associations between working from home and geographic remoteness. In 2019, people in cities were less likely to work from home relative to people in regional and rural areas (odds ratio 0.9). However, in 2023, people in cities became more likely to work from home than people in regional and rural areas (odds ratio 1.4) (Figure 4).

Figure 4: Regression model estimates of the factors associated with working some hours from home (adjusted odds ratios), HILDA Survey, 2019 and 2023

Employment and mental health

According to the National Health Survey, 43% of unemployed Australians aged 15 and over had a mental or behavioural condition during the collection period (January 2022 to April 2023), compared to 26% of employed Australians and 33% of Australians not in the labour force (ABS 2023: Table 4.1). These associations between unemployment and poor mental health are consistent with international evidence (Cygan-Rehm et al. 2017).

According to the HILDA Survey, half (51%) of unemployed Australians aged 18 to 64 were estimated to be at high or very high risk of mental distress in 2023, compared to 23% of employed Australians and 39% of Australians who were not in the labour force. In terms of self-assessed general health, 22% of unemployed Australians aged 18 to 64 reported having fair or poor health, compared to 10% of employed Australians and 33% of Australians who were not in the labour force.

After accounting for basic socio-demographic characteristics and prior health status, estimates from logistic regressions confirm the positive associations of fair/poor self-assessed health with either unemployment (odds ratio 1.6) or not being in the labour force (odds ratio 2.3). Similarly, there were positive associations between mental distress and unemployment (odds ratio 2.4) or not being in the labour force (odds ratio 1.7) (Figure 5). However, it is important to note that these associations cannot be interpreted as causal effects, as additional confounding factors, such as personality and life circumstances, may not be accounted for.

Figure 5: Logistic regression model estimates of the relationship between unemployment and general health or mental distress for Australians aged 25 to 64 (adjusted odds ratios), HILDA Survey, 2023

Where do I go for more information?

For more information on employment and unemployment, see:

• ABS Labour Force Survey
• ABS Labour statistics: concepts, sources and methods
• Household, Income and Labour Markey Dynamics in Australia (HILDA) Survey
• Australia’s Welfare: data insights 2021 (chapter 4) and 2023 (chapter 3).