Australian Institute of Health and Welfare (2021) Employment and unemployment, AIHW, Australian Government, accessed 30 June 2022.
Australian Institute of Health and Welfare. (2021). Employment and unemployment. Retrieved from https://www.aihw.gov.au/reports/australias-welfare/employment-unemployment
Employment and unemployment. Australian Institute of Health and Welfare, 16 September 2021, https://www.aihw.gov.au/reports/australias-welfare/employment-unemployment
Australian Institute of Health and Welfare. Employment and unemployment [Internet]. Canberra: Australian Institute of Health and Welfare, 2021 [cited 2022 Jun. 30]. Available from: https://www.aihw.gov.au/reports/australias-welfare/employment-unemployment
Australian Institute of Health and Welfare (AIHW) 2021, Employment and unemployment, viewed 30 June 2022, https://www.aihw.gov.au/reports/australias-welfare/employment-unemployment
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Employment underpins the economic output of a nation and enables people to support themselves, their families and their communities. It is also connected to physical and mental health and is a key factor in overall wellbeing.
During the coronavirus disease 2019 (COVID-19) pandemic in 2020, the Australian Government introduced a range of economic support packages to protect the economy and to offset the adverse impacts on the labour market of the measures it introduced to slow the spread of the COVID-19 virus – widespread social distancing and other business related restrictions. One of the largest of these support packages, the JobKeeper Payment wage subsidy scheme, allowed many employees who otherwise may have lost their jobs remaining connected with their employer.
This page examines the key measures for reporting on participation in the labour market (employment, unemployment and underemployment), and labour force experiences.
Data from the ABS Labour Force Survey (LFS) are used to report on measures of participation in the labour market – employment, unemployment and underemployment. The information presented on this page uses the original and seasonally adjusted data series where available. Summarised definitions of these measures are provided here (see Australian Bureau of Statistics (ABS) Standards for labour force statistics for further details, ABS 2018).
Employment rate (also known as the employment-to-population ratio) describes the number of employed people aged 15 and over as a proportion of the civilian population. For the purposes of this analysis, the employment rate refers to the working age population, those aged 15–64. This age restriction has been applied as it is important to account for the size of the population when monitoring longer term trends in employment rates, given the growth in the aged population (those aged 65 and over) in recent decades.
Unemployment rate describes the proportion of the population aged 15 and over in the labour force who are unemployed. Unemployed is defined as those not employed in the survey reference week who had either:
Underemployment rate describes the proportion of the population aged 15 and over in the labour force who are underemployed. Underemployed is defined as those who are either:
Labour force participation rate describes the proportion of the population aged 15 and over who are in the labour force (employed or unemployed). For the purposes of this analysis, the labour force participation rate refers to the working age population, those aged 15–64.
JobKeeper and JobSeeker Payments and ABS LFS definitions
People who received the JobKeeper Payment were counted as being employed in the ABS LFS, as the LFS considers people to be employed if they were away from their job for any reason (including if they were stood down) and were paid for some part of the previous 4 weeks (including through the JobKeeper scheme) (ABS 2020b).
People who received the JobSeeker Payment would be classified in the ABS LFS based on their labour market activity. Because of COVID-19, the mutual obligation requirements that people till then ordinarily had to meet to receive the JobSeeker Payment (which could include looking for work or studying) were suspended in March 2020; they have been gradually re-introduced since August 2020. These changes may have influenced whether people were actively searching for jobs – which would affect whether they were classified as ‘unemployed’ or ‘not in the labour force’ in the ABS LFS. They would, however, remain as ‘not employed’ in the ABS LFS unless they actually had a job.
This page focuses on the proportion of the working age population (those aged 15–64) who are employed (that is, the employment rate) to control for changes in the size of the population. Also discussed are the level of employment, the unemployment rate and the level of unemployment for those aged 15 and over.
In July 2021, the seasonally adjusted:
An individual’s labour force status is influenced by their choices and life circumstances as well as by broader conditions of the labour market. To provide an overall picture of the labour market, it is important to examine the characteristics of people with each labour force status: not in the labour force, unemployed or employed.
Of the 7.4 million people aged 15 and over who did not have a job in February 2021, 25% (or 1.8 million) were marginally attached as they wanted to work and were either available to start work or had actively looked for work. Of the 5.5 million people not marginally attached, the majority (88% or 4.8 million) did not want to work and a further 686,000 (12%) were permanently unable to work (ABS 2021f).
The main activities reported by those who did not want to work were:
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. 2010). Of the 692,000 unemployed people aged 15 and over in May 2021:
The hours an individual works is an important aspect of their employment. For many people, working part-time enables them to balance work with other activities, such as a caring responsibility, study, or transition to retirement. In May 2021, the (seasonally adjusted) share of employed people working part-time was 32% – 30,300 more people in part-time employment than in March 2020, although the proportion has remained the same as in March 2020 (32%) (ABS 2021d: Table 1).
For more information on part-time employment see ‘Chapter 4, The impacts of COVID-19 on employment and income support in Australia’ in Australia’s welfare 2021: data insights.
Since the late 1970s, when the current Labour Force series began, the employment rate has shown an upward trend, associated with rises in female labour force participation; the male participation rate has been slowly declining. However, over this time, there were several economic downturns (the early 1980s and 1990s recessions, the 2008–09 global financial crisis (GFC) and the 2020 COVID-19 pandemic) that resulted in falls in the employment rate.
Between 1978 and July 2021, the seasonally adjusted employment rate for people aged 15–64 (Figure 1):
These overall patterns in employment rates may mask differences within and across population groups (Figure 2). In particular, while the female employment rate before the COVID-19 pandemic in January and February 2020 (71%) was at a record high (since the current labour force data series began in 1978), the employment rate for males (79%) was lower than it was for most of 2007 and 2008 (80%) before the GFC, and considerably lower than it was in the late 1960s (83% in 1966–1967; ABS 2007).
Since the late 1970s, the unemployment rate has fluctuated between 4–11% due to a number of economic downturns and recoveries (Figure 1).
Between 1978 and July 2021, the seasonally adjusted unemployment rate for people aged 15 and over:
The underemployment rate for the population aged 15 and over has also been influenced by the economic downturns in the early 1990s and by the GFC, fluctuating around 6–7% (seasonally adjusted) between 1991 and early 2009, increasing to 8% in 2009 and then remaining around 8–9% between 2014 and March 2020 (8.8% in March 2020). Between March and April 2020, the underemployment rate rose steeply, from 8.8% to a peak of 13.6% in April 2020, it then gradually declined to 7.4% in May 2021 before rising to 8.3% in July 2021 (Figure 1).
Long-term trends in seasonally adjusted rates have largely been driven by the underemployment of part-time workers, reflecting the increased share of part-time employment in the labour market and growing underemployment among part-time workers.
In late March 2020, Australia introduced widespread social distancing and other business-related and travel restrictions to slow the spread of the COVID-19 pandemic. These measures included the shutdown of non-essential industries, which had large labour market effects.
Following these restrictions, the number of employed people aged 15 and over (seasonally adjusted) fell by 592,100 between March and April 2020 – by far the largest monthly fall in employment since the current Labour Force series began in February 1978. It dropped by a further 264,800 in May 2020 (Figure 1).
After May 2020, employment increased every month to July 2021, except for a fall of 45,600 in September 2020 and another fall of 30,700 in April 2021 (Figure 1). By May 2021, there was an additional 130,400 employed people than in March 2020, with employment continuing to increase to June 2021 (29,100 more employed people than in May 2021). In July 2021, employment increased by 0.02% or by 2,200 employed people. Nationally, hours worked fell by 0.2% between June and July 2021.
This slower growth in July 2021 was influenced by the labour market changes in NSW due to the COVID-related lockdowns in Greater Sydney in early-mid July (reference period for the July data fell during the second and third week of the lockdown). In NSW, between June and July 2021, there were falls in employment (36,000 fewer employed people) and unemployment (27,000 fewer unemployed) with the labour force reducing by around 64,000 people. In addition, total hours worked fell by 7.0% in NSW and were 5.1% lower than March 2021 (ABS 2021a).
Despite this slower growth in July 2021, the labour market had recovered by early 2021 as observed in the employment, unemployment and underemployment seasonally adjusted rates as now described and shown in Figure 1.
The seasonally adjusted employment rate for those aged 15–64 fell from 74.4% in March 2020 to 69.7% in May 2020, and then steadily increased, reaching 75% each month from March (74.8%) to May 2021 (75.5%), and increasing further to 75.7% in June and July 2021. The rate in July 2021 not only exceeded the previous high level in March 2020, but also reached its highest level since the current labour force commenced in February 1978.
The seasonally adjusted unemployment rate for the population aged 15 and over rose steeply from 5.3% in March 2020 to 7.4% in June and July 2020 (highest level in 22 years) before gradually declining to 5.7% in March 2021 and further to 4.9% in June 2021 and 4.6% in July 2021. The unemployment rate in July 2021 was lower than what it was in March 2020 (before the COVID-19 restrictions) and was at its lowest rate since November 2008. The fall in the unemployment rate from June to July 2021 may reflect some people dropping out of the labour force as they give up the search for work.
The seasonally adjusted underemployment rate increased from 8.8% in March 2020 to a peak of 13.6% in April 2020. It gradually declined to 8.0% in March 2021, falling further to 7.4% in May 2021, and then rose in June 2021 (7.9%) and July 2021 (8.3%). The rate in July 2021 is still below the level before the COVID-19 restrictions. The peak of 13.6% recorded in April 2020 was the highest on record and almost twice as high as the rate observed over the average of the previous 20-year period (7.3%).
The seasonally adjusted labour force participation rate (proportion of the population aged 15–64 who are employed or unemployed) fell from 78.7% in March 2020 to a low of 75.1% in May 2020. By May 2021, it had recovered to above March 2020 levels (79.6%); it continued to increase to June 2021 (79.7%) and then fell slightly in July 2021 (79.5%). This fall represents 37,700 fewer people in the labour force than in June 2021 (ABS 2021e).
The seasonally adjusted underutilisation rate (proportion of the labour force population who are unemployed or underemployed) increased from 14.1% to 20.0% between March and April 2020, and then gradually declined to 13.6% in March 2021 and 12.9% in July 2021, below the level observed in March 2020 (ABS 2021e).
Additional measures were developed during the COVID-19 period to assess unemployment and loss of work. One such composite measure was the ‘effective unemployment rate’, developed by the Department of the Treasury. This measure includes unemployed people, those who have recently withdrawn from the labour force and those still connected to their employer but working zero hours.
The effective unemployment rate peaked at around 15% in April 2020; it then fell to around 14% in May 2020 and then to 11% in June 2020, as pandemic restrictions started to ease and employment increased, with fewer people working zero hours (Kennedy 2020).
Another way to look at employment trends is to focus on monthly hours worked. This is important as people on the JobKeeper Payment were counted as employed even if working zero hours.
Between March and April 2020, seasonally adjusted monthly hours worked fell by almost 10%, but have since risen almost every month from April 2020 to May 2021. Hours worked in May 2021 were 2.8% higher than hours worked in March 2020. This increase in hours worked did not continue into June and July 2021, reflecting the recent COVID-19 outbreaks in Victoria in June and Greater Sydney in July. Nationally, hours worked declined by 1.8% between May and June 2021 and 0.2% between June and July 2021, influenced by the large fall in hours worked in NSW (7.0% decline) and recovery of hours worked in Victoria (9.7%) in July 2021. Despite these falls, hours worked in June and July 2021 were still above (0.9% and 0.7% higher) March 2020 levels (ABS 2021b).
The number of people who worked zero hours for economic reasons rose steeply between March and April 2020 (a 10-fold increase from 76,400 to 766,800), and then declined in most months through to May 2021, remaining relatively stable between March and May 2021 (between 56,700 to 58,800). The number of people who worked zero hours for economic reasons has since increased in June and July 2021, with almost 3 times as many people working zero hours (156,500 in June and 181,500 In July) as in May 2021 (58,200) and similar to the high levels observed in July and October 2020. This reflects the labour market impacts of continued COVID-19 outbreaks in Sydney and Victoria in June and July 2021 (ABS 2021b: Chart 6).
Young people and females (at least initially) were particularly affected by the labour market impacts associated with the COVID-19 restrictions, as these people were more likely to work in those occupations and industries most affected by the shutdowns and spatial distancing measures imposed to slow the spread of COVID-19 (see Figure 2 and ABS 2021d).
The 15–24 age group recorded the largest drop in employment rates (proportion of the age group who are employed), falling from 60% to 50% between March and May 2020, the lowest rate since the Labour Force series began in 1978. This was the largest fall of all age groups over this period, followed by that for the 25–34 age group (from 81% to 76%); all other age groups had a fall of 2–3 percentage points. By May 2021, employment rates for all age groups were above March 2020 levels (62% for those aged 15–24), except the 45–54 age group where employment rates were similar.
The 15–24 age group recorded the highest (seasonally adjusted) unemployment rate in over 2 decades, increasing from 11.6% in March 2020 to a peak of 16.4% in July 2020, the highest rate since February 1997. It then generally declined and by May 2021 was 10.7%, which equates to 24,800 fewer unemployed young people than in March 2020. The unemployment rate for the 25–34 age group also rose steeply between March and June 2020 (from 4.7% to 7.6%) before falling to 4.6% by May 2021. All other age groups had a slower relative growth in unemployment rates between March and June 2020.
The 15–24 age group had the highest (seasonally adjusted) underemployment rate since the current Labour Force series began in February 1978, increasing from 19.2% in March 2020 to a peak of 23.6% in April 2020, before falling to 15.8% in May 2021, below the level observed in March 2020 level and similar to the level in May 2014. Other age groups also saw a large increase in the underemployment rate between March and April 2020 (7.3% to 14.1% for those aged 25–34 and 6.3% to 10.6% for those aged 35–44), but, by May 2021, had also dropped to below March 2020 levels.
Male employment and unemployment rates did not recover as quickly as female rates (See Figure 2 and ABS 2021e). Female employment fell at a much faster rate than male employment early in the pandemic but recovered faster:
In terms of unemployment (seasonally adjusted):
For more information on the impact of COVID-19 on employment, see ‘Chapter 4, The impacts of COVID-19 on employment and income support in Australia’ in Australia’s welfare 2021: data insights.
The term ‘casual work’ is used to describe a large variety of work arrangements, and typically includes employees who do not tend to have leave entitlements (such as paid sick leave or annual leave). Such entitlements are usually for non-casual or permanent employees (ABS 2020c). Note that in March 2021, a specific definition for casual work was introduced (see Fair Work Ombudsman 2021 for more details). However, data presented in this section are based on currently available data from the ABS LFS on employees without leave entitlements that are used as a measure of casual employment.
The share of all employees employed on a casual basis in Australia grew from the late 1980s to the early 2000s (28% in August 2003) but remained relatively steady in the 6 years to February 2020 (around 24–25%). It fell to 20.6% in May 2020, the lowest rate since August 1991 (ABS 2020c). By May 2021, this share had risen to 23.7%, almost the same level as in February 2020 (24.1%; ABS 2021c: Table 13).
Casually employed workers accounted for nearly two-thirds (63%) of the job losses between February and May 2020 (ABS 2020a). Over this period, the number of casual employees fell by 21% (540,600 fewer casual employees) compared with a 2.6% drop (or 216,700 fewer) in employees not casually employed (that is, those with leave entitlements). From May 2020, the number of casually employed workers steadily increased, from 2.1 million to 2.6 million by May 2021, slightly below the numbers seen in February 2020 (25,300 fewer).
Retail and accommodation, and food services industries – among the hardest hit by social distancing measures during the COVID-19 pandemic – account for a large proportion of casual workers across Australia (Parliamentary Library 2020).
Since the current series of employment data collection began in the late 1970s, those aged 15–24 and those aged 55–64 have had lower employment rates than those aged 25–54. This is due to those in younger and older age groups transitioning into and out of work. Notably however, those aged 15–24 had higher underutilisation rates (unemployed or underemployed) than other age groups.
In May 2021, those aged 15–24 had the:
Youth employment is tied closely with the engagement that young people have with other activities, such as education and training.
For a detailed picture of youth engagement, see Engagement in education or employment of Australia’s youth.
In May 2021, both the seasonally adjusted employment and labour force participation rates for the population aged 15–64 were lower for females than males –employment rates of 72.0% and 79.1%, respectively, and labour force participation rates of 75.6% and 83.6% respectively (Figure 2). Over the last 30 years, however, the employment and labour force participation of females have been rising and are currently at record levels (see Trends in labour force measures for further details).
The overall underutilisation rate (those unemployed or underemployed) for the population aged 15 and over was higher for females than males – 13.4% compared with 11.7% in May 2021. However, the unemployment rate was higher for males than females (5.4% compared with 4.7%) while the underemployment rate was higher for females than males (8.7% compared with 6.3%; Figure 2).
See ‘Chapter 4, The impacts of COVID-19 on employment and income support in Australia’ in Australia’s welfare 2021: data insights for more details.
For more information on employment trends, see:
ABS (Australian Bureau of Statistics) 2007. Labour Force Historical Time series, Australia, 1966 to 1984. Canberra: ABS. Viewed 7 July 2021.
ABS 2018. Standards for labour force statistics. Canberra: ABS. Viewed 17 June 2021.
ABS 2020a. Casuals hardest hit by job losses. Media release. 11 December 2020. Canberra: ABS. Viewed 22 June 2021.
ABS 2020b. Classifying people in the Labour Force Survey during the COVID-19 period. Canberra: ABS. Viewed 17 June 2021.
ABS 2020c. Working arrangements. August 2020. Canberra: ABS. Viewed 8 March 2021.
ABS 2021a. Falls in participation and hours in NSW in July. Canberra: ABS. Viewed 22 August 2021.
ABS 2021b. Insights into hours worked, July 2021. Canberra: ABS. Viewed 7 July 2021.
ABS 2021c. Labour force, Australia, detailed. May 2021. Canberra: ABS. Viewed 24 June 2021.
ABS 2021d. Labour force, Australia. May 2021. Canberra: ABS. Viewed 24 June.
ABS 2021e. Labour Force Australia. July 2021. Canberra: ABS. Viewed 23 August 2021
ABS 2021f. Potential workers, February 2021. Canberra: ABS. Viewed 1 July 2021.
Cassidy N, Chan I, Gao A & Penrose G 2020. Long-term unemployment in Australia. Canberra: Reserve Bank of Australia.
Fair Work Ombudsman 2021. Casual employees. Canberra: Fair Work Ombudsman. Viewed 7 July 2021.
Kennedy S 2020. Opening statement – July 2020 Senate Select Committee on COVID-19, July 2020. Statement by the Secretary to the Treasury, Dr Steven Kennedy PSM. Canberra: Department of the Treasury. Viewed 16 June 2021.
Parliamentary Library 2020. COVID-19: Impacts on casual workers in Australia – a statistical snapshot. Canberra: Parliamentary Library. Viewed 18 June 2021.
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