Key findings

  • In 2017–18, 15% (464,000) of young people aged 15–24 lived in low-income households.
  • Households with at least 1 person aged 15–24 made up 14% (282,000) of all low-income households in Australia.
  • Since 2007–08, average weekly equivalised disposable household income of low‑income households with young people has increased marginally year on year in real terms, from $399 in 2007–08 to $416 in 2017–18.
  • Young people’s individual incomes have declined—between 2008 and 2018, disposable income per person declined by 1.6% per year among those aged 15–24 but grew by 1.4% per year for people aged 35–64.
  • The decline in labour income growth is the primary driver behind the decline in young people’s income—labour income makes up 86% of gross income for young people, and growth has declined since 2008 due to reduced hours and reduced hourly wage rates.

A person’s economic wellbeing can be determined by multiple factors, including income, consumption and wealth. Combined, these factors illustrate a person’s access to resources, and the circumstances or living standards achieved with these resources (ABS 2015).

For most people, adequate income is the single most important determinant of their economic wellbeing as it supports access to food, clothing, education, housing or leisure activities (ABS 2015). However, income-based measures may not fully capture a household’s access to other resources, and taking account of household wealth as well as income can provide a more accurate picture of a household’s command over financial resources (McLachlan et al. 2013).

This section presents part of the picture by focusing on household income as a key determinant of a person’s economic situation. However, household income alone may not fully capture the differences in economic wellbeing among young people, as:

  • living circumstances can vary substantially between those living with their parents and those living outside the family home
  • young people’s employment status, housing and family support may vary
  • household income may not reflect the young person’s command over or access to the financial resources of the household.

Findings are also presented on individual income among young people, in particular changes over time relative to other age groups. This may capture time spent in education, which could also affect future earnings.

Some information on parental transfers is presented, but data gaps remain. More data on income and consumption may be required to better understand the individual circumstances of each young person, including data on:

  • living arrangements (whether they pay board or rent)
  • resource sharing within households (whether they pay for utilities).

For more information about other factors of economic wellbeing that relate to consumption or the risk of experiencing financial difficulties, see Material deprivation and financial stress.

Box 1: Data sources on household income

Data on household income are taken from the ABS Survey of Income and Housing (SIH). The survey collects data on a range of household and personal characteristics, such as income levels, income sources, employment status and family composition. These data help to provide a better understanding of the living standards and economic wellbeing of Australians (ABS 2019a).

Data from the SIH can be used to identify and compare households with at least 1 person aged 15–24. Data are collected from residents in private dwellings in Australia (excluding Very remote areas) every 2 years, and the latest data are available for 2017–18.

Where available, data from the SIH are reported separately for young people who live with their parents (as either dependent students or non-dependent children), and those who do not (that is, those living as couples, lone persons, or with child/ren under 15, other relatives, other non-family members). This distinction reflects that young people live in many different households and circumstances, which can influence their overall economic wellbeing. For example, young people living with their parents may benefit from access to shared family resources.

For more information about the living circumstances of young people across Australia, see Demographics of Australian young people and their families.

How many young people live in low-income households?

According to the ABS SIH, 15% (464,000) of young people aged 15–24 lived in low-income households in 2017–18 (Box 2). These low-income households, where at least 1 person was aged 15–24, accounted for 14% (282,000) of all low-income households in Australia. In comparison, households with young people made up 20% of high-income households (those in the highest quintile).

Low-income households with young people had an average weekly equivalised disposable household income (EDHI) of $416 while high-income households with young people had an average weekly EDHI of $2,094 (Box 2).

Box 2: How is household income measured?

A household’s access to resources or income can be measured by its average weekly equivalised disposable household income. This measure of income is adjusted (or ‘equivalised’) according to household size and composition. Equivalising income accounts for a larger household needing more resources to achieve the same standard of living as a smaller household. It also allows for comparisons across different household types.

Low-income households are defined as those in the lowest 2 deciles of equivalised household income (EDHI), excluding the first and second percentiles (excluded due to the high wealth and expenditure patterns of some of the households in this category, and the prevalence of income types other than employee income and government pensions and allowances) (ABS 2019c).

High-income households are those in the highest 2 deciles of EDHI.

For information about sources of income, see Engagement in education or employment and Income support for young people.

Have there been changes over time?

Between 2007–08 and 2017–18:

  • the proportion of low-income households with young people aged 15–24 has remained relatively stable (12% in 2007–08 and 14% in 2017–18)
  • average weekly EDHI of low-income households with young people has increased marginally year on year in real terms, from $399 in 2007–08 to $416 in 2017–18
  • average weekly EDHI of high-income households with young people has remained stable.

Is it the same for everyone?

Young people aged 15–19 were more likely to be living in low-income households than those aged 20–24 (17% compared with 13%). Young people living in low‑income households were more likely to be living with:

  • parents (9.4% of all low-income households) than not living with parents (4.1%)
  • couple parents (6.7% of all low-income households) than lone parents (2.4%).

In 2017–18, for all households with young people aged 15–24, the average weekly EDHI was higher among those who lived with their parents ($1,088) than among those not living with parents ($983).

How can young people’s individual income be measured?

Measures of economic wellbeing using equivalised household income assume that resources are shared between household members. For specific population groups such as young people, measures of individual income can be used to shed light on a person’s circumstances even if they do not take into account the pooling of resources that occurs in a household.

This section examines income growth over time to show how young people are faring long term, particularly in relation to other age groups. The focus is on income growth among young people between 2008 and 2018. Data over this period can show how the slowdown of the economy after global financial crisis and the slowing of the mining boom affected young people who entered the labour market at this time (Productivity Commission 2020) (Box 3). 

Box 3: Data sources on young people’s income

Data from the Household, Income and Labour Dynamics in Australia (HILDA) survey are available to report on income among young people. The HILDA contains detailed information on people’s income sources and related characteristics, such as education and health. HILDA data, though not comparable with ABS SIH data, are used here as the ABS SIH data are not collected as often, and their construction of income variables is not as consistent over time.

How is individual income measured?

Income is reported as income per person, calculated as the sum of income for an age group divided by the number of people in the age group. Changes in this average measure are an indicator of changes in income for the group as a whole and provide an appropriate summary of changes in all income sources.

Disposable income is derived by deducting estimates of personal income tax from gross income.

Income growth is compound annual growth, estimated as the average growth per year over a defined period (Productivity Commission 2020).

Broadly, individual income can be categorised into 3 types: labour income, government transfer income, and other income. For more information about government transfers or payments, see Income support for young people. For more information on engagement in employment see Engagement in education or employment.

How have young people’s incomes changed over time?

Between 2008 and 2018 disposable income per person declined by 1.6% per year among young people aged 15–24. In comparison, the average income grew by 1.4% per year for people aged 35–64, and 3.2% for people aged 65 and over (Productivity Commission 2020).

This decline in income was predominantly driven by a decline in hours worked among those not currently studying. Income decline among young people is a cause for concern as it may result in lower savings and lower wealth. A lack of income growth among young people can also affect their future wellbeing by increasing their exposure to economic shocks.

Is it the same for everyone?

Between 2008 and 2018, income growth was negative for people aged 15–24 across all demographic groups. However, there were some variations. Average annual decline in real disposable income was higher among:

  • those living with parents (1.9%) than among those not living with family (0.1%)
  • those living in the rest of Australia (1.9%) than among those living in capital cities (1.5%)
  • those with severe disability (4.1%) than among those with mild (2.1%) or no disability (1.3%) (Productivity Commission 2020).

For more information about living circumstances among young people, see Demographics of Australian young people and their families.

What are the sources of income among young people?

In 2018, labour income (86% of gross income) was the biggest source of income among young people, followed by transfer income (8.5%) and other income (5.4%) (Productivity Commission 2020).

Labour income includes wages and other employment-related income. As young people rely more on labour income than other age groups, its decline (due to reduced hours worked and reduced wage rates) was the main contributor to the decline in income among young people between 2008 and 2018.  

Between 2008 and 2018:

  • labour income for people aged 15–24 declined at an average annual rate of 1.5%, while growing for those aged 35–64 (1.9%) and those aged 65 and older (8.1%)
  • average weekly hours worked among young people aged 15–24 declined from 17.9 hours worked per person to 14.8 hours, while increasing among those aged 55–64 (18.9 to 20.3 hours) and 65 and older (2.5 to 3.4 hours). Hours worked also declined among those aged 25–34 (28.3 to 26.8 hours) and 35–54 (28.4 to 27.5 hours)
  • average real hourly wage rates declined by 0.1% for young people aged 15–24 but grew for those aged 35–54 (1.5%), 55–64 (1.4%) and 65 and over (2.2%) (Productivity Commission 2020).

For information about employment and underemployment, see Engagement in education or employment.

As well as labour income, young people also receive income from government transfers (or payments). In 2018, government transfers accounted for 8.5% of income for young people aged 15–24. Between 2008 and 2018, the proportion of young people aged:

  • 15–19 who received more than 50% of their income from government transfers fell from 12% to 5.6%
  • 20–24 reliant on government transfers increased from 12% to 14% (Productivity Commission 2020).

These government transfers include income support payments, family payments, other payments, supplements, bonuses and in-kind benefits. Changes in reliance on this form of income may be due to changes in eligibility for certain payments. For more information about specific government transfers received by young people, see Income support for young people.

‘Other’ sources of income account for only a small proportion of young people’s income—5.4% in 2018. Other income includes income that is not labour income or government income, such as business income, investment income and parental cash transfers. Between 2008 and 2018:

  • other income fell by 4.9% per year for young people aged 15–24
  • the proportion of young people not living with their parents who received cash transfers from their parents increased from 11% to 19%
  • the average value of cash transfers increased from $6,653 to $10,026 (Productivity Commission 2020).

Young people are also living at home longer and delaying their transition to independent living. While transfers from resident parents were generally small, the main benefit for young people who live with their parents is the savings they make on living expenses, such as on accommodation, groceries and household expenses (Productivity Commission 2020).

How has COVID-19 affected young people’s incomes?

The impact of negative income growth since 2008 is likely to be compounded by the COVID-19 pandemic. Income allows young people to accumulate savings, which can be used to generate investment income or protect against economic shocks.

Negative income growth between 2008 and 2018 (largely due to reduced economy-wide labour demand) has meant that young people could not build their savings at the same rate as did previous generations. People aged under 35 may thus enter the COVID-19 recession with less protective savings and may face a much more difficult job market (Productivity Commission 2020).

Young people who enter the labour market during a recession may also have lower earning capacity and lower earnings long term (Andrews et al. 2020). Evidence suggests that earnings of graduates who enter the labour market during a recession are lower than those of other cohorts (Altonji et al. 2016).

Weak labour market conditions may also lead to lower skills–job matching, and young people who enter the market may face difficulties in climbing the occupation ladder (Andrews et al. 2020; de Fontenay et al. 2020). However, changes in participation in education among young people, can also have an impact on future earning potential.

For more information about participation in education, see Non-school qualifications.

For more general information on the economic impact of COVID-19, see COVID-19 and the impact on young people.

Where do I find more information?

For information on:

For information on how factors relating to income, finance and employment can affect children aged 0–14, see:

For general technical notes relating to this report, see also Methods.

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