Closing the Gap targets: key findings and implications

Target

The target associated with Outcome 8 of the 2020 National Agreement is to increase the proportion of Aboriginal and Torres Strait Islander people aged 25–64 who are employed from 51% in the baseline year of 2016 to 62% by 2031.

Background

Strong economic participation, through increased labour force participation and employment opportunities, contributes to many aspects of health and welfare at the individual, family and community levels.

Employment increases personal and household income which is crucial for improving households’ standards of living, financial security and resilience to unexpected shocks.

Employment also enhances social inclusion and mobility, promotes investment in physical and mental health, and improves self‑esteem and opportunities for self‑development. These lead to improved education, health, life expectancy and other outcomes linked with several Closing the Gap targets.

Current status

The proportion of employed Aboriginal and Torres Strait Islander (First Nations) people aged 25–64 increased to 56% in 2021, higher than the 2021 progress point of 55% on the trajectory to meeting the 2031 target rate of 62%.

The employment rate gap between First Nations and non-Indigenous people aged 25–64 narrowed from 24.7 pp in 2016 to 22.0 pp in 2021.

Among First Nations people aged 25–64 in 2021, 6.2% were unemployed, down from 9.0% in 2016 (baseline year) and 7.7% in 2006; the gap reduced from 4.8 pp in 2016 to 3.0 pp in 2021.

In 2021, 34% of First Nations people aged 25–64 were employed full time, 16% were employed part time and 5.6% were employed but away from work. Between 2016 and 2021, the proportion of those employed full time and part time slightly increased.

First Nations men were more likely than women to be employed in 2021. The gap in the employment rates between men and women, however, has been decreasing.

In 2021, the proportion of First Nations people aged 25–64 who were employed consistently decreased with increasing remoteness, from 62% in Major cities to 35% in Very remote areas.

In 2021, employment rates for First Nations people aged 25–64 ranged from 42% in the most disadvantaged areas (IRSD first quintile) to 81% in the least disadvantaged areas (IRSD fifth quintile). Notably, the proportion of employed First Nations adults was at or above the 2031 national target of 62% in areas across all IRSD quintiles except for the first quintile (most disadvantaged areas) in 2021.

In 2021, the Australian Capital Territory (73%), Tasmania (62%) and Victoria (62%) had rates at or above the 2031 national target of 62%, and employment rates in New South Wales and Queensland were also higher than the national average of 56%.

Between 2016 and 2021, the employment rate of First Nations people aged 25–64 increased for those who had an educational level of Certificate III/IV and higher but declined for those below that educational level.

Key findings

Literature suggests that significant drivers of employment include:

• demographic and social background characteristics (for example, sex, age, marital status, educational outcomes, number of dependants/children, caring responsibilities, housing)
• health conditions and disability
• cultural and historical factors (for example, experience of removal from natural family)
• geographic factors (for example, remoteness areas, area-level socioeconomic disadvantage, state/territory)
• macroeconomic factors (for example, sustained economic growth, policies/programs).

Findings from the logistic regression showed that, controlling for other factors, First Nations employment was statistically significantly associated with:

• sex
• education
• marital status
• physical and mental health, and disability status
• area-level socioeconomic disadvantage
• remoteness.

Random forest analysis confirmed the importance of highest educational attainment and disability status as the key factors associated with First Nations employment, followed by Socioeconomic Indexes for Areas (SEIFA) index, self-assessed health status and marital status.

Strategies for improvement

Key strategies contributing to increased employment among First Nations people include programs aimed at increasing educational attainment – particularly at the Certificate III level and higher, which appears to be a critical threshold level of education for substantially improving employment outcomes.

Programs aimed at engaging and retaining First Nations people with disability in employment would likely meaningfully improve employment rates of First Nations people, especially given the high rates of disability among the First Nations population.

Policy interventions aimed at improving the health of First Nations people will likely have the additional benefit of improving First Nations employment rates.

Policies and programs aimed at improving English proficiency may assist with increasing employment rates among First Nations people, particularly if paired with programs that target educational attainment.

The Indigenous Skills and Employment Program was designed, in consultation with First Nations communities, and in the light of Australian and international research, to connect First Nations people with jobs, career advancement opportunities, and new training and job-ready activities. Continued effort in this area could help to reach the economic participation target by 2031.