Description
As Australia's population ages and much of the current workforce heads to retirement, making a smooth transition to the workforce becomes imperative for young people. Using the 1995 cohort of the Longitudinal Surveys of Australian Youth, this project examines how long it takes for young people to move from education to work, and identifies factors that distinguish people who are able to move quickly into employment from those who take many months to find work. The report finds that, compared to their better educated peers, young people who do not finish Year 12 take significantly longer to get a job. Note: publication amended 11 July 2011—table 2, 2006 Census data.
Summary
About the research
This report examines the experiences of young Australians during the transition from full-time student to worker using data from the 1995 cohort of the Longitudinal Surveys of Australian Youth (LSAY95). The authors focus on two aspects of the transition to employment: the time taken to find any job and the time taken to find a full-time permanent job. The type of job obtained is not the focus.
While the authors are specifically interested in the time taken to obtain a job, they also find that a substantial proportion (around 25%) of those who have not completed school or obtained a certificate III or higher qualification do not get a job at all. This group fails to make the transition from student to worker.
Key messages
- Young people who are better educated find work faster: those who complete Year 12 or post-school qualifications will find employment more quickly than young people who leave school early. But Year 12 completion itself does not give the same advantage as completion of a post-school qualification when it comes to finding full-time permanent employment.
- The type of post-school qualification does not change the speed of finding any job; university and VET graduates have similar experiences.
- Importantly, gender matters. Better educated women attain employment faster than their less educated counterparts. This difference is not as apparent for men.
Tom Karmel
Managing Director, NCVER
Executive summary
This report examines the time it takes young Australians to obtain their first job after they complete their education. This is an important issue because the first experiences of young people entering the labour market may affect their future labour market successes or failures. The unique information contained in the employment calendar of the 1995 cohort of the Longitudinal Surveys of Australian Youth (LSAY) is used to estimate the factors associated with the length of time between completing education and commencing work.
The report distinguishes between different levels of education, the most pertinent distinction being between: (i) less than Year 12, (ii) Year 12, (iii) vocational education and training (VET), and (iv) higher education (university). It also distinguishes between getting any job (including casual, fixed-term, and part-time) and getting a full-time continuing job with paid leave entitlements. Since gender differences were found to be empirically strong from the outset, the analysis is performed for men and women separately.
Considerable work went into the preparation of the data, in particular through the construction of a complete monthly employment calendar for all those who reported their post-school education qualifications. A number of sensitivity analyses were necessary due to the high attrition present in the data, and to determine the appropriate handling of factors for which we have limited information. All such work is reported in a support document.
The report employed multivariate regression analysis to estimate the duration between completing education and obtaining work using the method of piecewise constant hazards. This method is known to be particularly powerful and robust for handling data that may be problematic in ways that are not clearly known, or which cannot be explicitly modelled even when known. These regression methods are called ‘flexible’ or ‘semi-parametric’.
The report finds that level of education is the prime factor influencing the speed at which young people obtain work after they leave the education sector. When it comes to getting any job, completion of Year 12 is almost as useful as a VET or university qualification for getting a job quickly. The disadvantaged group are those who did not complete school. When it comes to getting a full-time permanent job, the advantage of Year 12 completion is smaller, but still present. About 40 months after completing their education, those with Year 12 only had similar job participation results to those with VET and university qualifications.
The report finds strong gender differences. Education appears to play a smaller role for the men in the sample than it does for the women. The differences are large. A man with a degree obtains work five times faster than a man who did not complete Year 12, while a woman with a degree obtains work eight times faster than a woman having less than Year 12. Similar differences are present when we consider the speed of getting a full-time continuing job.
This report shows very clearly that the importance of education for labour market entrants is that it not only leads to better wages, but also to obtaining a job faster. About a quarter of the sampled youth with less than Year 12 education had not obtained any work by the end of the LSAY observation period. This provides a serious warning regarding the long-term prospects of this subset of the younger Australian workforce. The prognoses for skills and career development for these young people are grim.