New research from e61 Institute finds that young Australians are more willing to quit work than older generations

19 October 2023 – New research by leading economics group e61 Institute has revealed that high youth unemployment is a result of young Australians quitting jobs at much higher rates than older age groups.

A new report titled Why is Youth Unemployment Always High shows that whilst a larger proportion of people aged 15-24 are out of work than their older colleagues, this is largely the result of young Australians voluntarily leaving their jobs.

e61 researcher, and lead author Zach Hayward stated that the report showed that high youth unemployment isn’t due to young people having trouble finding work – but because these work relationships are less enduring.

“Over the past two decades, we’ve seen that young people aged 15-24 were about twice as likely to leave their job in any three-month period than someone who was aged 25-39.”

“This frequently translates to high unemployment rates for young people, but this may not be a bad thing – it depends on the reasons why people are leaving their jobs like undertaking study, taking time out to change career paths or travel now that borders have opened up.”

“Young people separating from their jobs is a global phenomenon, with young people even more likely to leave or lose their job across the Tasman in New Zealand.” Mr Hayward said.

However, in the Australian context, these separations are largely due to young Australians voluntarily leaving their jobs – rather than being fired or made redundant.

The number of young people leaving jobs voluntarily is much larger than those being fired or made redundant. Moreover, whilst young people are 50% more likely to be fired compared to older workers, this is not a result of their age per se, but due to being new to an organisation or having a lower level of education. It is not a function of employers treating young workers differently once other factors are accounted for.

“We found that when you compare a young Australian with the same education and same time at a company as a worker aged 40-54, they were actually 18% less likely to be made redundant.”

Mr Hayward also stated that the research uncovered surprising results and challenged several widely held assumptions about young workers.

“There are a lot of myths about young people in the workforce and workplace, such as this idea that they are not committed to finding work. But when you look at the data, these clichés don’t really hold up.

Notably, the research showed that young people are able to find work at nearly exactly the same rate as other Australians, with 20-25% of young unemployed people finding work in an average month.

This isn’t to say that there aren’t young vulnerable individuals who do end up in hardship. Prior e61 research (Disengaged: The costs and possible causes of youth disengagement in Australia) had shown that there are a group of young Australians who become disengaged from the labour market.

“Understanding the difference between those who are vulnerable, and those who enter unemployment because it is the right choice for them, is essential for setting policy. Future e61 research will attempt to help policymakers identify these differences.” Mr Hayward said.

Newly appointed CEO of e61 Institute Michael Brennan, said that future research at e61 will examine critical challenges facing Australia’s economy including employment, housing and education.

“We have a talented and passionate team of researchers that are working to address some of the most pressing issues facing Australia. This research challenges some preconceived ideas about youth and employment, therefore painting a better picture of the reality of our workforce. This is critical when it comes to addressing other challenges like productivity and skills gaps.”

“This is of the utmost importance for us as an institute. We provide data-driven and evidence-based insights into the challenges facing Australia allowing us to highlight some of the solutions and opportunities at hand for policymakers.” Mr Brennan said.

Key findings
Youth unemployment is much higher because they are more likely to voluntarily leave their jobs.
Young Australians are less likely to involuntarily lose their jobs but as likely to find work as older Australians.
Young people are more likely to leave work due to weak job attachment compared to older Australians.
A young Australian with the same education and same time at a company compared to their older peers are 18% less likely to be made redundant.

-Kate Lord /DG