Hands up who would work if they had access to cheaper childcare

New data released this week by the Australian Bureau of Statistics confirms that the biggest issues keeping women out of the labour force are the cost, access and availability of child care. The data also shows there was a significant increase in the number of discouraged job seekers in 2013 for whom concern over their age remains the biggest impediment.

Quite possibly the biggest problem of the Australian economy in the next decade is participation. While productivity is important, because of the ageing population, getting more non-retired people into the labour force (i.e. working or looking for work) than in the past will be crucial if we want our economy to keep growing.

Oddly however, when we talk about participation, mostly we examine the people already either working or looking for work. There are masses of data on the employed put out each month and at an even more detailed level each quarter.

But we only look at those outside the labour force once a year.

In 2013 not surprisingly, given the steady increase in the unemployment rate, the level of those out of the labour force who were discouraged job seekers stayed above that of previous years.

The big increase was among men – perhaps reflective of the decline in the growth of full-time employment.

These discouraged job seekers ranged across all ages, although especially for men the level increases with age. Over half of all male discouraged job seekers are over the age of 60. It is thus no surprise that the main reason given for being so discouraged is believing that employers consider them too old for the job:

But while this is an issue that will certainly need to be addressed, overwhelmingly people choose to be out of the workforce for other reasons.

The main one is retirement. Thirty-one percent of all people over 15 out of the labour force are so because they have chosen to retire. Such people are viewed as having no marginal attachment to the labour force. They don’t want to work, and aside from raising the retirement age, there is little that will bring such people back.

But for the rest, the reasons for being out of the labour force become very clearly dependent on whether you are a man or a woman:

For men, the main reason to be out of the labour force is to attend education – 34.2% of people gave that reason (mostly those under 25). The second biggest reason was a long-term health issue or disability – a reason which peaks for men in their 40s and 50s.

For women, however, the major reason not to be in the labour force was “home duties”, second biggest was attending education and the third was caring for children.

Significantly, caring for children was the least likely reason a man would be out of the labour force.

The discrepancies in home duties and child caring across the genders becomes even more clear when we break it down into ages:

Nearly 50% of women out of the labour force between the ages of 25 and 34 cite caring for children as the reason, compared with just 8.1% of men the same age.

Regarding home duties, for both men and women it becomes a more common reason the older one gets. But at all ages women are overwhelmingly more likely to be the ones out of the labour force for that reason.

But these figures hide the fact that many more women are out of the labour force compared with men. Sixty per cent of those out of the labour force and not retired are women. And the issue of child care becomes most stark when we examine how big a factor it is for all people being out of the labour force:

In 2013, men who are caring for children account for a mere 1.1% of all non-retired people out of the labour force; women account for 16.4%. The levels have not change greatly over the past eight years, suggesting there has been little cultural change either in households or in the workplace over that time.

Of those who are caring for their children, about 30% choose to do so because they wish to stay at home and raise their children. But the remaining 70% wish to work but have chosen not to. For these women (let’s be honest, it’s mostly women) the main reason is the cost of child care:

Nearly half of those caring for children cite the cost of child care as their reason for being out of the labour force. A further 23% cite other reasons associated with child care – such as lack of availability either due to location or because the child-care centre was booked out.

For a number of people the reason is the child is too young (which is an issue with some child-care centres). This is one issue difficult to overcome – and possibly one that shouldn’t be overcome, given the importance of the mother to the child in the first few months.

But it is worth noting that most of these issues relate to the period well after any paid parental leave runs out – either the current government version or Tony Abbott’s proposed one.

If the government wants to improve participation they need to raise their eyes a bit further along the horizon than just the six months after a baby is born.