Friday, 11 May 2018

Selective unemployment (yet again)

In response to my post yesterday about unemployment by educational level, a reader who knows their way around Stats' Infoshare database better than I do pointed me to a now discontinued series (it stopped at March '16). Thanks for that, mate: as the series goes all the way back to March '86, we can see how unemployment behaved through a couple of recessions. Here's the answer.

And it is indeed exactly as you might have surmised. In the worst episode - the combination of the costs of Rogernomic restructuring, the very tight monetary policy of the early days of the Reserve Bank Act, and the overseas 'Anglo-Saxon recession' of 1990-91 - everyone got battered, but those with no qualifications got battered most, with their unemployment rate peaking around 17%.

Conversely the good times of the pre-GFC 2000s rolled long enough to bring unemployment rates even for the less qualified down very significantly. By 2007-08 the unemployment rate for people leaving school with a qualification had got down to only 4% - lower than our overall unemployment rate today (4.4% in March). Sustained expansions do wonders for getting even the harder-to-place people into jobs.

The policy lessons stand. Sometimes - if you've let inflation get out of hand, if you've run big fiscal deficits for too long - you may find yourself in austerity mode. Best not go there in the first place, of course, but if you have, you'd better do something to alleviate the impact on the more marginalised groups in society, because they end up wearing the worst of the downturn. More positively, if you can contrive to keep an expansion going long enough, a good deal of social angst goes away as a progressively tighter labour market puts pay packets into far more people's hands.


  1. Is your label right on the "post-school and school"? I thought it would be post-school and tertiary.

    On the assumption that it is tertiary, one of the things I would take from that graph is that up until the mid-2000s school qualifications acted like a "lesser breed of tertiary" qualification, but from that point forward school qualifications have been acting like a "superior no qualification". That is a big change in the positioning of school qualifications

  2. Thanks for those comments.

    On the labelling, I took the wording straight from Stats. I presumed they meant school plus something else beyond school.

    That thought about school qualifications not getting you as far as they used to had crossed my mind, too, so obviously we're both right! What's going on would be an interesting thing to know. There may be an element of dumbing down the secondary school curriculum, and I'm not sure the 'bite sized chunks' approach of unit standards will have helped. There may also be an element of employers (independently or in response) raising their standards: perhaps jobs these days genuinely require a bigger ask, though it could also be 'credentialism'. But yes, it is an interesting pattern, isn't it?