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Labour force participation rate and employment-to-population ratio

Labour force participation rate and employment-to-population ratio for people aged 15 to 64 years

The labour force participation rate is the proportion of the workforce-age population (15 to 64 year-olds) that is employed or actively looking for work. It is a good indicator of the total supply of labour, although it does not include those who are marginally attached to the labour force (people who want to be working but are not actively looking for work), such as discouraged job seekers.

The employment-to-population ratio is the proportion of the workforce-age population that is employed. This ratio is influenced by both labour demand and labour supply factors. It is also a good summary indicator for measuring Australia’s labour market performance relative to other countries, particularly those in the OECD.

Over the year to June 2019, Australia’s trend workforce-age (15 to 64 years) employment-to-population ratio increased by 0.6 percentage points to 74.2 per cent. The trend workforce-age labour force participation rate increased by 0.5 percentage points over the same period to 78.4 per cent.

Figure 11. Labour force participation rate and employment-to-population ratio, people aged 15 to 64 years, trend data, February 1978 to June 2019

The picture displays the labour force participation rate and employment-to-population ratio, people aged 15 to 64 years, trend data, February 1978 to June 2019

Labour force participation rates for males and females aged 15 to 64 years

The gap between male and female labour force participation rates narrowed to 9.5 percentage points in June 2019. Australia is well ahead of where it needs to be to meet the G20 goal of reducing the gap in participation rates between men and women of workforce age by 25 per cent by 2025.

The workforce-age male labour force participation rate rose by 0.4 percentage points to 83.2 per cent over the year to June 2019. The female workforce-age labour force participation rate increased by 0.6 percentage points to 73.7 per cent over the same period. The increase in female labour force participation is likely to be due in part to the growth of industries that employ a higher proportion of women, such as health care and social assistance.

Figure 12. Labour force participation rate of males and females aged 15 to 64 years, trend data, February 1978 to June 2019

The picture displays the labour force participation rate of males and females aged 15 to 64 years, trend data, February 1978 to June 2019

Monthly Leading Indicator of Employment

The Leading Indicator of Employment, produced monthly by the department, gives advanced warning of whether employment is likely to grow at a faster or slower rate than the long-term trend. It anticipates movements in employment using a composite index of two international series and three domestic series — representing diverse economic factors that influence the rate of employment growth in Australia, including business investment, consumer spending and the demand for Australian exports — that have been shown to lead employment cycles over the last two decades. The Leading Indicator of Employment is published on the department’s website at employment.gov.au/news/monthly-leading-indicatoremployment.