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Forms of Work in Australia

Staff working paper

This paper by Anthony Shomos, Erin Turner and Lou Will was released on 23 April 2013.

The paper analyses changes in the prevalence of different forms of work in Australia over the decade to 2011, and explores possible explanations for observed changes.

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  • Key points
  • Media release
  • Contents
  • While employment in most forms of work (FOWs) grew in absolute terms over the decade to 2011, only permanent employees became more 'prevalent' (increased as a share of employment).
    • Owner managers of unincorporated enterprises (OMUEs) fell in prevalence by 2 to 3 percentage points, offsetting the increase for permanent employees.
    • Casuals and fixed term employees were no more prevalent at the end of the decade than at the start. Labour hire workers probably became less prevalent, and it is likely that the workforce share of independent contractors also fell.
  • Relatively rapid growth of casual and independent contractor employment from the 1980s, and labour hire workers from the 1990s, did not continue through the 2000s.
  • In 2011, permanent full-time and part-time employees accounted for about 60 per cent of the workforce. Casual employees and self employment accounted for a little under 20 per cent each. Fixed term employees accounted for the small residual and labour hire workers (who are employed under a mix of FOWs) represented about 1 per cent of employment.
  • Over the decade to 2011:
    • Increases in the prevalence of permanent employees were particularly strong in the mining states (Queensland, Western Australia and the Northern Territory).
    • Structural change at a broad industry level appears to have played little role in prevalence changes.
    • An increase in the employment share of higher skilled jobs was associated with the increased prevalence of permanent employees.
    • Falls in the numbers of farmers and farm managers explain about half of the decline in the prevalence of OMUEs in the non mining states.
    • The increased prevalence of permanent employees occurred disproportionately in part time jobs and among workers aged 50 to 69.
  • More pronounced prevalence changes in the mining states could have been related to:
    • strong competition for workers encouraging greater job mobility. Hiring of permanent employees can mitigate costly turnover.
    • greater confidence in business viability. A fall in the risk of layoffs, and associated redundancy costs, might have encouraged employers to offer more permanent employee roles.
  • At a national level, a preference for permanent employee roles rather than self employment among some workers - accommodated by relatively strong labour markets - might have played a role in the fall in the prevalence of OMUEs.

Background information

Lou Will (Research Manager) 03 9653 2224

Permanent Employees Increase Share of Employment

The pros and cons of different forms of work have been the subject of public debate over many years, with the security of different arrangements one focus of recent commentary. A Staff Working Paper, Forms of Work in Australia, by Anthony Shomos, Erin Turner and Lou Will analyses changes in the prevalence of different forms of work in Australia over the decade to 2011, and explores possible explanations for observed changes.

While employment in most forms of work grew in absolute terms between 2001 and 2011, only permanent employees increased as a share of employment. This contrasts with the twenty years to 2001 when the share of casual employees in the workforce doubled to 20 per cent, according to this paper.

The recent increase for permanent employees was accompanied by a 2 to 3 percentage point decline in the workforce share of the self-employed in unincorporated enterprises. Casual and fixed term employees were no more prevalent at the end of the decade than at the start. Labour hire workers probably became less prevalent and it is likely that the workforce share of independent contractors also fell marginally.

These relatively small changes in the workforce shares of different forms of work took place in a dynamic labour market: employment grew more rapidly in the decade to 2011 than in the preceding two decades, and the profile of net jobs created was quite different from the profile of employment in 2001.

Changes in the structure of employment over the decade appear not to have been a major driver of the observed changes. That said, a rise in the share of higher-skilled jobs was associated with the increased workforce share of permanent employees.

The changes were much more pronounced in the mining states (Queensland, Western Australia and the Northern Territory) than in the rest of the country. Mining state employers possibly increased their use of permanent employees as a strategy to reduce the costs associated with higher labour turnover in a strong labour market. Greater business confidence might also have encouraged hiring of permanent employees, as the risks of having to lay off workers and associated redundancy costs are lower in a strong economy.

Background information

Lou Will (Research Manager) 03 9653 2224

Other

Leonora Nicol (Media and Publications) 02 6240 3239 / 0417 665 443

  • Preliminaries
    • Cover, Copyright, Contents, Acknowledgments, Abbreviations and explanations and Glossary
  • Key points
  • Chapter 1 Introduction
    • 1.1 Why are different forms of work of interest?
    • 1.2 Forms of work analysed in this paper
    • 1.3 Research questions addressed in this paper
  • Chapter 2 Determinants of forms of work
    • 2.1 Labour markets
    • 2.2 Demand for different FOWs
    • 2.3 Supply of labour to different FOWs
    • 2.4 Summary
  • Chapter 3 The prevalence of forms of work
    • 3.1 Changes in forms of work over the 30 years to 2011
    • 3.2 Changes in forms of work over the decade to 2011
    • 3.3 Summary
  • Chapter 4 Why might the prevalence of different forms of work have changed?
    • 4.1 Changes in the labour market over the 2000s
    • 4.2 Some hypotheses about the determinants of changes in the prevalence of different FOWs
    • 4.3 Decomposing changes in each form of work
    • 4.4 The evidence on factors that effect changes in the prevalence of FOWs
    • 4.5 What could explain the observed shift effects?
    • 4.6 Some directions for future research
  • Appendix A Data sources
  • Appendix B Changes in the prevalence of forms of work
  • Appendix C Evidence for independent contractors and other business operators
  • Appendix D Shift-share decomposition
  • Appendix E Employment changes at a state level
  • Appendix F Employment changes at an industry level
  • Appendix G Employment changes at an occupation level
  • Appendix H Employment changes by gender and full- and part- time work
  • Appendix I Employment change by age cohort
  • References

Please note: The following appendix is only available online and is not in the printed copy.

  • Appendix J Data used in constructing 30-year time series

Printed copies

This publication is available from the Media and Publications Section.

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