Employment Polarisation in Australia

Whilst employment levels in Australia are healthy when compared to those twenty years ago, the available work has become increasingly polarised into either all-work or no-work households. This paper measures the extent of polarisation that has taken place in Australia since 1982 with a measure that accounts for changes in individual based employment and family structure. We find that employment growth over the period should have largely offset the effects of shifts in household composition towards more single-adult households. However, polarisation of employment across households means that there are around 3.3 percent more households with no earned income. We also find that couples with children have faced the bulk of this rising joblessness as a result of this polarisation. Exploration of wider shifts in employment away from less-educated men and toward prime-age better educated women explain about 40% of the adverse shift against couples with children. The increase in all-work households is confined to multi-adult households, again focused on families with children. Hence, there is a large shift in patterns of employment in households with children, away from a dominant single male earner model toward more dual-earner and no-earner households with children. This dramatic polarisation of work and incomes for families with children is likely to have consequences for welfare costs and child opportunities in the next generation. JEL Classification: J6