Young People in an Economic Downturn. Longitudinal Surveys of Australian Youth. Briefing Paper 23

Following the collapse of the US investment bank Lehmann Brothers in September 2008, the world economy began a downward spiral, with many countries falling into recession. Australia experienced significant stock market losses and unemployment rates began to climb. This briefing paper considers how young people fared in previous downturns and discusses how structural labour market changes over the past 20 years have affected young people this time around. It also looks at the qualitative evidence from respondents in the Longitudinal Surveys of Australian Youth (LSAY), exploring common themes in how they perceived the economic downturn had affected their work and study intentions in 2009. The author finds that, although Australia experienced a relatively mild downturn, young people bore almost the entire weight of the full-time job decline (including apprenticeships), and a disproportionate share of the increase in unemployment. Those unable to find a job or who have been made redundant are at risk of remaining unemployed for a significant time, with potential longer-term scarring effects. Recent structural changes to the labour market, such as rising educational participation, appear to provide some protection for young people. However, full-time work for 15 to 19-year-olds has become even more concentrated in industries more sensitive to economic changes such as building and construction, and retail. Calculation of Impact of Change in Employment is appended. (Contains 8 tables, 16 figures and 2 footnotes.)