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Insight issue #58 22 August 2016

Young people remain optimistic despite challenges in finding work

The number of young people in full-time employment remains low since the shocks of the 2008 global financial crisis (GFC). While the economy appears to be making some signs of recovery, the challenges for young people persist.

Data from the Longitudinal Surveys of Australian Youth (LSAY) show that the proportion of young people in full-time employment has decreased, and it’s taking young people longer to transition into full-time work. Prior to the GFC, of those 19 year olds who were employed back in 2007, 48 per cent were able to secure permanent/ongoing work. Six years later, this figure has reduced to 40 per cent.

Opportunities to undertake apprentice and traineeships are also falling; LSAY data shows that, for those LSAY respondents who were 19 years old in 2007, close to one in four had commenced an apprentice or traineeship. This figure fell to less than one in five for LSAY respondents who were 19 years old in 2013.

Young people remain optimistic about their future

Despite these challenges, young people seem to be optimistic. About nine in 10 LSAY respondents who were 19 years old in 2007 said they were happy with their career prospects. After the GFC hit, this figure remained unchanged for 19 year old LSAY respondents in 2010.

LSAY data also show that about nine in 10 of employed respondents are happy with their job, including the kind of work they do, other people they work with, and the tasks they are assigned. But far fewer (only two in three) are happy with their opportunities for promotion, indicating the challenges young people persistently face in the job market.  The “scarring” effect of prior unemployment presents yet another hurdle. However, this does diminish as time since being unemployed passes.

So what can help young people during economically challenging times?

A good experience at school and participation in extra-curricular activities is important, not only for its educational benefits but also because it means the student feels part of a community. Working part-time while at school can also provide young people with valuable work experience and skills, such as team work and time management.

Having a post-school qualification can also help to lessen the scarring effect of unemployment. For young people starting their working lives, transitions into work can often be into low-skill jobs. While young people who work part-time are likely to remain in low-skill jobs, the wage penalty diminishes over time and part-time or casual jobs can be a useful pathway for young people to progress into full-time or permanent positions.

For further information on the data presented in this article, summary data tables can be accessed using the LSAY cohort reports at http://www.lsay.edu.au/cohort/introduction.html