Academic journal article Australian Journal of Labour Economics

School-to-Work Transitions during Volatile Economic Times

Academic journal article Australian Journal of Labour Economics

School-to-Work Transitions during Volatile Economic Times

Article excerpt

1. Introduction

Over the past four decades, the Australian economy restructured from a goods producing economy to a service economy as manufacturing moved offshore to nations with cheaper labour. As the Australian labour market restructured and jobs growth became concentrated in highly skilled occupations, Year 12 retention rates doubled and youth unemployment increased. Traditionally, the completion of the Year 12 certificate was regarded as a pathway into further education, however, it is now regarded as the minimum requirement for entry level jobs. For young people seeking careers, further investment in human capital credentials is essential, fuelling growth in post-secondary education enrolments. During the Global Financial Crisis, the unemployment rate for young people was double the rate for the general population and has remained high ever since, creating uncertainty for young people wishing to transition directly into the labour market. In this paper, we examine transitions between school and employment and/or further study to assess the impact of the Global Financial Crisis on young Australians focussing on levels of engagement. Although the availability of full-time paid employment declines during periods of economic recession, young people may seek to overcome the disadvantages associated with transitioning from education to employment during economic downturns by undertaking post-school study and working part-time until the economy recovers and the labour market rebounds. The remainder of this paper is structured as follows: in section 2 we provide an overview of the economic context before, during and after the GFC; in section 3 we introduce the data and outline our analytical strategy; in section 4 we present the results; and in section 5 we provide a discussion of the findings before summing up the paper in section 6.

2. Context

Secondary Education in Australia

Since the 1970s, the Year 12 apparent retention rate increased from 27.5 to 81 per cent (ABS, 2013).The apparent retention rate doubled between 1983 and 1993 due to the collapse of the youth labour market in the wake of the economic recession of 1982-83 when apprenticeships declined by one-third (Teese and Polesel, 2003). The graph in figure 1 charts the trend over time in the Year 12 apparent retention rate. As senior school populations became increasingly diverse, schools introduced vocational education and training (VET) programs to accommodate the needs of non-academically inclined students (Anlezark et al., 2006). Students may complete VET Certificates I/II/III in conjunction with their Year 12 certificate. Over 40 per cent of senior secondary students participate in VET programs, however, the majority of participants do not complete a certificate level qualification (Karmel, 2012; Keating et al., 2013; Polesel, 2008) suggesting that students are not necessarily attempting to formalise this investment in their human capital.

Despite the overall increase in Year 12 rates, children growing up in economically disadvantaged neighbourhoods have higher non-completion rates than their more advantaged peers (Curtis et al., 2012; Johnston et al., 2014; Polesel, 2008). According to Curtis and McMillan (2008) key indicators of non-completion include: being male; being Indigenous; having low-educated parents; having parents employed in manual occupations; living in a regional/rural area; being a low achiever in Year 9; and attending a government school. The non-completion of Year 12 is associated with poor employment outcomes with one-quarter of early school leavers being unable to find any kind of paid employment in the first eight years after leaving school (Fitzpatrick et al., 2011). Consequently, 50 per cent of those who leave school before completing Year 12 undertake training in the VET sector (Curtis and McMillan, 2008).

According to the Australian Bureau of Statistics (ABS, 2013), the percentage of young people aged 15 to 19 years engaged in formal study increased from 77 to 81 per cent between 2001 and 2012. …

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