Disengaged: The costs and possible causes of youth disengagement in Australia

by Jo Auer

The e61 Institute has published new research to identify causes and costs of youth disengagement from work and study since COVID-19. Key findings include:

  • young men are more likely to be disengaged than young women, and are spending more time out of work and study
  • people living in regional areas, people with disabilities and those with Aboriginal or Torres Strait Islander heritage are at greater risk of being disengaged
  • disengaged young people are more likely to be lonely, and 3 times more likely to be the victims of physical violence, than those who are working or studying.

According to Disengaged: The costs and possible causes of youth disengagement in Australia, the share of young people that are not working or studying surged to multi-decade highs during the COVID-19 pandemic. The share of men aged 20-24 years that have dropped out of the workforce remains historically high despite the youth unemployment rate being at an historical low.

The e61 research identifies the key risk factors associated with youth disengagement, including:

  • not completing high school
  • low levels of parental education
  • underlying health conditions or disabilities
  • Aboriginal or Torres Strait Islander heritage
  • living in a regional area.

The research note finds that disengagement can cause long-term damage to young people:

  • disengaged young adults are more likely to work in lower-skill occupations than their peers;
  • disengaged young women are three times as likely to report being victims of physical violence than their peers;
  • disengaged young people report much higher rates of loneliness;
  • disengaged young people earn significantly lower wages later in life than peers.

For society, high rates of youth disengagement mean higher direct welfare support and long-term productivity losses. Now is the right time to consider policies to address high rates of youth disengagement given the persistence of structural problems in the Australian economy and the weak outlook for productivity growth.

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