Labour mobility MONASH UNIVERSITY - ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING If they change the text will not fit into slot Project 2003-6 Labour mobility: demographic, labour force and education effects and implications for VET Chandra Shah & Gerald Burke Report to ANTA CEET, Faculty of Education, Building 6, Monash University, Vic 3800 Phone 03 9905 2865 Fax 03 9905 9184 [email protected] www.education.monash.edu.au/centres/ceet CEET(cid:146)s work on this paper was funded by the Commonwealth Government through the Australian National Training Authority as a Key Vocational Education and Training Research Centre. The views and opinions expressed in the paper are those of the authors and do not necessarily reflect the views of ANTA. ANTA does not give any warranty or accept any liability in relation to the content of the work. 1 Labour mobility Contents Acknowledgements...................................................................................vii Executive summary....................................................................................ix 1 Introduction.........................................................................................1 2 Literature review on labour mobility and training...................................5 3 A conceptual model for labour market transitions................................13 4 Initial data analysis............................................................................17 4.1 Stayers, movers and new entrants.......................................................18 4.2 Movers: Job losers and job leavers.....................................................20 4.3 Movers: working, looking for work and not in labour the force.............23 4.4 Job-to-job mobility............................................................................25 5 Modelling results................................................................................31 5.1 Job separations.................................................................................32 5.1.1 Average marginal effects on job separation......................................32 5.1.2 Predicted probabilities of job separation...........................................37 5.2 Occupational mobility.......................................................................41 5.2.1 Average marginal effects on occupational mobility............................41 5.2.2 Predicted probabilities of occupational mobility.................................51 6 Conclusion and implications for training.............................................67 References...............................................................................................73 Appendix 1 ASCO Listing..........................................................................77 Appendix 2 Alternative conceptual model..................................................83 Appendix 3 Further data descriptions........................................................85 Appendix 4 Data descriptions based on skill-level transitions......................95 Appendix 5 Statistical models of labour market transitions.......................101 Appendix 6 Model estimates...................................................................105 ii Labour mobility Tables and figures Tables Table E1 Predicted probability of job separation for males and females by qualification and full-time/part-time status in last job.......................xii Table E2 Predicted probabilities of occupational mobility for males and females who separated from a job by full-time/part-time status and reason for ceasing last job.............................................................xiv Table 1 Persons who worked at some time in the year ending February 2002 by mobility and sex..............................................................18 Table 2 Persons who worked at some time in the year ending February 2002 by mobility age group (%)....................................................19 Table 3 Persons who worked at some time in the year ending February 2002 by mobility highest qualification (%)......................................19 Table 4 Occupational profile of persons who worked at some time during the year ending February 2002 by mobility status...........................20 Table 5 Job losers and job leavers in the year ending February 2002 by age (%)...............................................................................................21 Table 6 Job losers and job leavers in the year ending February 2002 by highest qualification (%)................................................................21 Table 7 Job losers and job leavers in the year ending February 2002 by occupation of last job (%)..............................................................22 Table 8 Reason for losing or leaving last job in the year ending February 2002 by sex (%)............................................................................22 Table 9 Destination of movers by age group (%).........................................23 Table 10 Destination of movers by highest qualification (%)...........................24 Table 11 Destination of movers by occupation in last job (%).........................24 Table 12 Destination of movers by reason for separating from last job (%)......25 Table 13 Job-to-job mobility by occupational destination and sex..................26 Table 14 Occupational mobility by age group (%)........................................26 Table 15 Occupational mobility by highest qualification (%)..........................27 Table 16 Occupational mobility by occupation of last job (%)........................27 Table 17 Occupational mobility by tenure in last job (%)...............................28 Table 18 Inter-occupational job-to-job transitions.........................................30 Table 19 Average change in the probability of job separation(c)......................36 Table 20 Predicted probability of job separation by occupation group and full-time/part-time status in last job(cid:151)males and females.................40 Table 21 Predicted probability of job separation by industry and full- time/part-time status in last job(cid:151)males and females.......................41 Table 22 Average change in the probability of occupational transitions(cid:151) males(c)........................................................................................45 Table 23 Average change in the probability of occupational transitions(cid:151) females(c)......................................................................................48 iii Labour mobility Table 24 Predicted probabilities of occupational mobility who separated from a job by full-time/part-time status and reason for separating from last job(cid:151)males and females.........................................................52 Table 25 Predicted probabilities of occupational mobility after job separation by qualification, full-time/part-time status and reason for ceasing last job(cid:151)males............................................................................60 Table 26 Predicted probabilities of occupational mobility after job separation by qualification, full-time/part-time status reason for ceasing last job(cid:151)females................................................................................62 Table 27 Predicted probabilities of occupational mobility after job separation by industry of last job(cid:151)males and females.....................................64 Table 28 Predicted probabilities of occupational mobility after job separation by tenure in last job(cid:151)males and females.......................................65 Table A1 Major, sub-major and unit groups of ASCO...................................77 Table A2 Characteristics(a) of persons who had worked at sometime during the year ending February 2002 by mobility and sex (% in each category)......................................................................................85 Table A3 Characteristics of job losers and job leavers in the year ending February 2002 by sex (% in each category)....................................87 Table A4 Characteristics of movers by labour force destination at February 2002 and sex (% in each category)................................................89 Table A5 Characteristics of persons making job-to-job transitions by destination and sex (% in each category)........................................91 Table A6 Job-to-job mobility by skill level and sex.........................................95 Table A7 Job-to-job mobility by skill level and age group(cid:151)males (%)............95 Table A8 Job-to-job mobility by skill level and age group(cid:151)females (%).........96 Table A9 Job-to-job mobility by skill level and qualification(cid:151)males (%).........96 Table A10 Job-to-job mobility by skill level and qualification(cid:151)females (%)......97 Table A11 Job-to-job mobility by skill level and occupation(cid:151)males (%)..........97 Table A12 Job-to-job mobility by skill level and occupation(cid:151)females (%)........98 Table A13 Job-to-job mobility by skill level and industry(cid:151)males (%)................98 Table A14 Job-to-job mobility by skill level and industry(cid:151)females (%).............99 Table A15 Binary logit estimates of job separation(cid:151)males and females (base state is (cid:145)staying in same job(cid:146)).......................................................105 Table A16 Multinomial logit estimates of occupational mobility(cid:151)males (base state is (cid:145)remaining in same occupation(cid:146)).......................................107 Table A17 Multinomial logit estimates of occupational mobility(cid:151)females (base state is (cid:145)remaining in same occupation(cid:146)).......................................110 Table A18 Predicted probabilities of occupational mobility after job separation by industry, full-time/part-time status and reason for ceasing last job(cid:151)males................................................................................113 Table A19 Predicted probabilities of occupational mobility after job separation by industry, full-time/part-time status and reason for ceasing last job(cid:151)females..............................................................................115 Table A20 Predicted probabilities of occupational mobility after job separation by full-time/part-time status, reason for ceasing last job and tenure in last job(cid:151)males.......................................................................117 iv Labour mobility Table A21 Predicted probabilities of occupational mobility after job separation by full-time/part-time status, reason for ceasing last job and tenure in last job(cid:151)females....................................................................118 Figures Figure 1 A framework to analyse the labour market transitions of persons who worked at sometime during year ending February 2002...........16 Figure 2 Predicted probability of job separation by full-time/part-time status and age(cid:151)males and females........................................................38 Figure 3 Predicted probability of job separation by qualification and full- time/part-time status in last job(cid:151)males and females.......................39 Figure 4 Predicted probability of remaining in the same occupation after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)males............................................................................53 Figure 5 Predicted probability of moving to another occupation in the same major group after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)males..........................................53 Figure 6 Predicted probability of moving to a lower occupational group after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)males................................................................54 Figure 7 Predicted probability of moving to a higher occupational group after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)males...........................................................54 Figure 8 Predicted probability of looking for work after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151) males...........................................................................................55 Figure 9 Predicted probability of leaving the labour force after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151) males...........................................................................................55 Figure 10 Predicted probability of remaining in the same occupation after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)females..........................................................................56 Figure 11 Predicted probability of moving to another occupation in the same major group after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)females.......................................57 Figure 12 Predicted probability of moving to a lower occupational group after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)females..............................................................57 Figure 13 Predicted probability of moving to a higher occupational group after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151)females.........................................................58 Figure 14 Predicted probability of looking for work after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151) females........................................................................................58 Figure 15 Predicted probability of leaving the labour force after job separation by age, full-time/part-time status and reason for ceasing last job(cid:151) females........................................................................................59 v Labour mobility Figure A1 An alternative framework based on five-point skill scale to analyse the labour market transitions of persons who worked at sometime during year ending February 2002................................................84 vi Labour mobility Acknowledgements The report acknowledges the invaluable assistance provided by Victoria Leaver from the Australian Bureau of Statistics (ABS) who extracted the data and ran the statistical programs and Michael Long (CEET) who provided feedback at various stages of the project. vii Labour mobility Executive summary This report provides estimates of job and occupational mobility by demographic, educational and labour market variables using data from the ABS Labour Mobility survey for 2002. The report provides considerable information on the effects of these variables on the probability of job separation, information that has previously been unavailable. It also identifies the factors that are significant in explaining various types of occupational mobility, including transitions to non-employment. This information can be useful in the planning of vocational education and training. Background The modern labour market is constantly creating new jobs and destroying old ones. Of over 9 million persons employed at February 2002 in Australia, 22 per cent were employed in their current job for less than one year. The actual number of jobs that were filled was more than 3.3 million. This includes jobs that were filled by multiple job-holders and others who moved through more than one job during the year. Job creation and destruction are part of the larger process of adjustment, reallocation and growth in the labour market. The mix of jobs and associated demand for skills within firms and production sites reflect changes in organisation, regulation, technology and costs of training, hiring and firing workers. Jobs differ in many respects, including the level of skills required, hours of work and security of tenure offered. Globalisation is playing an increasing role in this. As part of the reallocation process workers move voluntarily or involuntarily between employers or locations, and to and from joblessness. The process can also involve career moves with change in occupations, change in earnings and for some a vicious cycle of short-term jobs interspersed with spells of non-employment. This report is an attempt to understand the demographic, educational and labour market factors that affect first, job separations and second, occupational mobility, including to non-employment, in the current Australian labour market. Labour market segments with low rates of job separation and low rates of transitions to non-employment usually signal good worker-job or worker-firm matches. The training literature suggests that good matches increase the probability of investment in worker training, although this may vary by age of the worker. It is important for public policy on training to focus on the labour market segments which are at risk of missing out on investment in skills development. Conceptual model of labour mobility The conceptual model of labour mobility developed in this report begins with all persons who were employed at some time over a period of twelve months. Any such person is classified as a: 1. stayer; ix Labour mobility 2. mover; or 3. new entrant. Stayers are those who have been in their current job for twelve months or more. Movers are those who stopped working in a job at sometime in the current year; and new entrants are those who started their current job during the year and had no previous job during the year. New entrants include those who are entering the labour force for the first time in their lives as well as those who were previously unemployed or temporarily out of the labour force. Movers, who are either job leavers or job losers, could subsequently be: 1. working (re-employed); 2. looking for work; or 3. not in the labour force. Furthermore, those movers who are re-employed could make one of the following occupational transitions: 1. remain in the same four-digit occupation as before; 2. change occupation to one in the same major (1-digit) group as before; 3. change occupation to one in a lower major (1-digit) group than before (meaning at the same or lower skill level); or 4. change occupation to one in a higher major (1-digit) group than before (meaning at the same or higher skill level). Transitions of the first type are perhaps the easiest to make for a worker because they may not involve much additional education and training. The second and third types are likely to involve varying amounts of training by the worker. Some skills will be common across a group of occupations thus enabling easier mobility between occupations in the group. Transitions to jobs in a different major group are likely to involve additional training, perhaps even if the move is to a lower skill category. Key features in job separation The initial analyses of the data showed that of the 9.9 million persons who worked sometime in the year to February 2002, 72 per cent were stayers, 21 per cent were movers and 7 per cent were new entrants. The following briefly describes results from multivariate analysis of stayers and movers from jobs. Age The probability of job separation decreases with age but at a decreasing rate for both male and female workers. At any given age, job separation is more likely for male part-time workers than female part-time workers. Amongst full-time workers, however, the chances of separation are higher for females but the gap between the sexes narrows to almost nothing for middle age and older workers. Migrants The chances of job separation are found to be significantly higher for recently arrived migrants than for Australian-born workers, particularly for those from main English-speaking countries. Recently arrived migrants are less likely to have established roots in a particular location or with a particular employer and are therefore more likely to consider alternative job x