Unemployment And The Labour Force

Refer back to Table 6.4. The labour force participation rate (LFPR) has risen greatly in the past thirty years. In August 1970, the male LFPR was 83.1%; by August 1980, this had fallen to 77.8%. By June 1995, it had continue to decline, to 73.8%.

The female LFPR has risen from 39.6% in August 1970, to 44.7% in August 1980 and to 53.2% in June 1995.

The major factor behind the fall in male LFPR has been increasing numbers of men retiring early and a greater number of young men staying at school, and staying there longer, and then going on in greater numbers to tertiary education. Amongst older men, finding work after being retrenched can be very difficult; the lower LFPR for people over 45 years is indicative of the waste of resources occuring today in the labour market.

Studies of LFPR for women have shown that the fastest growth in the labour force participation rate has occured for females aged between 25 years and 45 years. This trend has been consistently found since the mid 1980's.

The labour force participation rate can be used as an indicator of the level of ''hidden unemployment'' in our economy. If the labour force participation rate falls, then we can say more people have ''given up'' looking for work. The full extent of unemployment is not accurately given by the unemployment rate, because of the number of workers who have ''given up'' looking for work and who are not included in the ABS measure.