The unemployment rate of young New Zealanders has decreased following initial COVID-19 impacts but is three times the national average, Stats NZ said today.
In the September 2021 quarter, the unemployment rate (not seasonally adjusted) for people aged 15-24 was 9.6 percent, compared with a national rate of 3.2 percent and a rate of 2.3 percent for people aged 25-64.
“Young people play a vital role in the labour force, but our data shows that they experience much higher unemployment rates than people aged 25-64 and the overall population,” labour market manager Andrew Neal said.
Youth unemployment rate returns to pre-COVID-19 levels
Youth have been strongly affected by the COVID-19 pandemic. Sharp annual rises in youth unemployment in the September and December 2020 quarters brought their unemployment rates up to 13.2 and 13.8 percent respectively. However, over the year to the September 2021 quarter, the youth unemployment rate had a sharp and significant drop of 3.6 percentage points to 9.6 percent, bringing it close to pre-COVID-19 levels.
This differs from the longer-term effects of the global financial crisis, when the youth unemployment rate climbed rapidly from the December 2008 quarter to the March 2010 quarter, then slowly declined over several years.
Youth unemployment rate is typically higher than national average
“While New Zealand’s youth unemployment rates compare relatively well internationally, the ratio between our youth and our national unemployment rates is higher than a lot of OECD countries,” Mr Neal said.
Since the early 2000s, the unemployment rate of the 15-24 age group has been approximately three to four times that of the 25-64 age group, and usually over two-and-a-half times that of the overall working-age population.
Over the year to September 2021, the youth unemployment rate followed the decreasing trends of the national and the 25-64 age group’s rates, however, it did not decrease as quickly. The youth unemployment rate in the September 2021 quarter was three times that of the national average, matching the ratio in the December 2018 quarter.
Youth are mainly unemployed for short periods
Youth are more dynamic in the labour market and are usually unemployed for shorter periods. Long-term unemployment is significantly higher among those in older age groups.
In the September 2021 quarter, 38.2 percent of unemployed people aged 25-64 were looking for work for more than six months, compared with 21.4 percent of unemployed people aged 15-24.
|Over 6 months||8400|
|Over 6 months||20100|
More than half of unemployed teenagers are engaging in education
Youth are a traditional source of seasonal labour. Their labour force participation rate tends to increase in the December and March quarters, during summer holidays, and dip in the June and September quarters as more young people engage in study.
“A contributing factor to why youth unemployment rates are higher than the national average could be that a lot of unemployed teenagers are in education,” Mr Neal said.
“Being in education means only having fixed periods of availability for work, which increases the challenge of finding a suitable job.”
In the September 2021 quarter, out of 23,100 unemployed teenagers (aged 15-19), 12,200 (53 percent) were in education or training. However, amongst older youth (aged 20-24) who were unemployed, only 20 percent engaged in education and training.
Unemployed youth not engaged in education are included in the youth who are not in employment, education, or training (NEET) indicator, which measures a group of young people who may experience a higher risk of poor outcomes in the future. NEET also includes youth who are not in the labour force (those not available or not actively seeking work) and not in education or training, which can be further disaggregated by those who have caregiving responsibilities.
In the year to September 2021, the number of youths who were NEET decreased by 6,400. This annual decrease came mainly from youth who were not in the labour force due to caregiving responsibilities.
|Sep-12||not in education”||not in education – caregiving”||not in education – no caregiving”|
Unemployed youth typically seeking part-time work
Out of 39,400 youth unemployed in the September 2021 quarter, 31,600 were looking for a job (the remaining 7,800 had a job to start in the 4 weeks). Of these, 13,500 (42.7 percent) were looking for only a part-time job. In addition, 6,100 (19.1 percent) were looking for either full- or part-time work, while the rest were only looking for full-time work.
Disparity in youth unemployment rates by ethnicity
Young Māori and Pacific people have consistently had higher unemployment rates than young European people. In the September 2021 quarter, the youth unemployment rates (not seasonally adjusted) were 7.8 percent for European, 15.5 percent for Māori, 11.2 percent for Pacific, and 9.6 percent for Asian groups.