1 in 3 Men Unemployed, Under the Age of 25

I mentioned some statistics about current conditions in the Irish labour market in a recent post. 1 out of 8 individuals in the Irish labour force are unemployed. Taking account of labour force withdrawal and reduced working time, it is estimated that approximately 1 out of 7 are in some form of labour market distress. Gender breakdowns indicate that 2 out of 3 of these individuals are male. The latest Live Register figures show that almost twice as many men are claiming unemployment benefit (or allowance), compared to women.

Despite many posts on this blog flagging youth and graduate unemployment (a recent one is here); I was still somewhat surprised to read in today's Irish Independent that 1 in 3 men under the age of 25 are now unemployed. I decided to take a look at the most recent QNHS publication; the figure of 1 in 3 is indeed correct. Table 14 from the QNHS publication (shown below) indicates that 36.9% of males ages 15-19 are unemployed; and that 31.7% of males aged 20-24 are unemployed. This approximates to one third of males under the age of 25 being currently unemployed. The number of persons under 25 years of age on the Live Register are available on Table 2b (page 3) of Friday's Live Register release: the figure is 84,400. (Click on the table below to see a larger picture of QNHS Table 14).


What else can we learn from the table above? Looking at both genders under the age of 25, approximately 27% are currently unemployed; this figure is over double the current national average of 12.5%. The gender difference in unemployment is most marked in the 20-24 age-group; twice as many males (compared to females) are unemployed in this category. There are also twice as many males unemployed in the 25-34 age-group. These ratios are in line with the national figures for unemployment (2 out of 3 unemployed individuals are male). Across both genders, the highest concentration of unemployment is in the 15-19 age-group, followed by the 20-24 age-group; and monotonically decreasing for higher age-groups.

Finally, what can we infer about graduate unemployment? If we consider the 20-24 age-group on its own, we see that one quarter of these individuals are unemployed; and that males account for two thirds of the unemployment figure. Only a subset of individuals in the 20-24 age-group hold graduate qualifications; what we know about this demographic comes from the QNHS Special Module on Educational Attainment that ran from 2003-2008 (see Table 2 on page 6 of the Pdf). In March-May of 2008 (the most recent data available), 25% of the 20-24 age-group holds a third-level qualification (non-degree, degree, or above). 45% of the 25-34 age-group holds a third-level qualification as at March-May 2008; the higher attainment level of the 25-34 age-group suggests that graduate unemployment is as much (if not more) of a problem for this age-group.

To re-cap, we know from the QNHS Special Module on Educational Attainment that 25% of the 20-24 age-group, and 45% of the 25-34 age-group, had third-level qualifications as at March-May 2008. From the most recent QNHS we know that 24.2% of 20-24 year-olds, and 14.1% of 25-34 year-olds, are unemployed. However, it is important to be careful at this juncture, because we cannot yet tell whether unemployed individuals (aged 20-24 or 25-34) are more or less likely to have third-level qualifications. Though it only refers to March-May 2008, the most indicative source of information about graduate unemployment appears to be the breakdown of ILO employment status by educational attainment and age-category in the QNHS Special Module on Educational Attainment. Table 5 in the QNHS Special Module shows the employment rates of persons aged 25 to 64 by highest level of education attained. Unfortunately, 25-64 is the only age-range used; and QNHS Database Direct does not include the educational attainment variable.

How Does Under-Employment in the QNHS Contribute to an Overall Measure of Labour Market Distress?

Following on from the previous post (based on the CSO's Quarterly National Household Survey), another question arises: what is the extent of underemployment in the Quarterly National Household Survey (QNHS)? And... what does this mean for an overall measure of labour market distress?

We know that there were 1,922,400 people in employment in the third quarter of 2009; which represents an annual decrease of 184,700 (or 8.8%). However, 15,300 of those in employment are 'part-time under-employed'; almost three times as many compared to summer 2007. This can be seen in the chart from the previous post. (Technical details about the measurement of 'part-time under-employment' are provided in the comments section).

Also, besides under-employment, the 'part-time' component of employment has increased by about 16,000 individuals; comparing Q3-2009 to the summer of 2007. It is possible that some of these individuals may not be classified as 'under-employed' because they have given up looking for additional hours of work. What does all of this mean for the headline statistic that the (non-seasonally adjusted) unemployment rate climbed to 12.7% in the third quarter of 2009?

Firstly, taking account of the 15,300 individuals who are 'part-time under-employed' means that we get an overall measure of labour market distress (i.e. unemployed plus 'part-time under-employed'). The rate of labour market distress (by this measure) was 13.4% (non-seasonally adjusted) in the third quarter of 2009. (Broader measures of labour market distress were discussed on the blog before - here - in the context of U.S. unemployment. And also on the Economix Blog: here).

Finally, if we take account of individuals who are 'marginally attached to the labour force' (see previous post on declines in the labour force), the rate of labour market distress was 14.3% (non-seasonally adjusted) in the third quarter of 2009. This figure (which requires seasonal adjustment) is closer to taking account of individuals forced onto shorter working weeks; and those who have given up looking for work (this could include the long-term unemployed who are not job-seeking).

How Important are Recent Declines in the Labour Force for Understanding Unemployment?

The RTE website reports that the unemployment rate climbed to 12.4% in the third quarter of 2009. This is in keeping with recent indications from the Live Register. The report on the RTE website is based on the CSO's Quarterly National Household Survey (QNHS) - available here. The Irish Times reports (here) that the rise in Q3-2009 represents the smallest quarter-on-quarter increase in unemployment since the first quarter of 2008. Similar observations have been made in relation to previous rounds of the Live Register. The Irish Times notes however, that "commentators warned against reading too much into signs of a stabilisation in the unemployment rate, with Davy’s Rossa White pointing out that a decline in the labour force rather than an improvement in the employment trend, was the primary factor behind the slowing down in the rate of increase."

So what are the most recent annual decreases in unemployment and the labour force? There were 1,922,400 people in employment in the third quarter of 2009; which represents an annual decrease of 184,700 (or 8.8%). There were 2,202,300 persons in the labour force in the third quarter of 2009; representing an annual decrease of 64,300 (or 2.8%). The labour force decrease compares with an annual labour force growth of 0.6% (or 13,500) in the third quarter of 2008. So compared with this time last year, there is certainly much more downward movement the labour force. This can be seen in the chart below, taken from today's QHNS publication. (The chart can be clicked on to see a larger resolution).


According to the CSO, "the decline in the size of the labour market is largely attributable to a decline in participation of 53,600, as represented by the fall in the participation rate from 64.2% in Q3-2008 to 62.5% in Q3-2009." The participation rate (as defined by the CSO) is 'the number of persons in the labour force expressed as a percentage of the total population aged 15 or over'. In addition to changes in participation, the labour force is also affected by changes in the number of persons of working age in the State (the demographic effect). Also from the CSO: "Up to the start of 2008 this demographic (was)... primarily driven by net inward migration. With the decline in inward migration the demographic effect has declined through 2008 and became negative in Q2-2009. In Q3-2009 this negative demographic effect contributed 10,600 to the overall annual decline in the labour market."

In summary, what we can see in the table above is the importance of following trends in the data-rows which show "in labour force" and "total persons aged 15 or over". Furthermore, if one compares the first 5 columns in the above table (with the final two columns), a number of points are apparent:

(i) A marked slow-down in unemployment
(ii) An increase in labour force size comparing Q1-2009 to Q2-09 and Q3-09 (however, there is still a notable decrease in Q3-09 when compared to Q4-2008)
(iii) A fall off in persons of working age i.e. "total persons aged 15 or over"

Finally, is there anything to the claim that a recent decline in the labour force (rather than an improvement in the employment trend) is the primary factor behind the recent slowing in the rate of unemployment-increase? Looking at the figures from a year-on-year perspective (Q3-08 vs. Q3-09), we can see that the labour force has shrunk, and much more so than the fall-off in persons of working age. This suggests that labour force decline is limiting the increase in the unemployment rate more than emigration, at least for now. However, it must be remembered that in September of this year, the CSO announced there was a return to net outward migration for Ireland (-7,800 in the year to April 2009) for the first time since 1995. Of the 65,100 people who emigrated in the year to April 2009, Irish nationals totalled 18,400. This figure is roughly one tenth of the reduction in the number of employed individuals during the Q3-08 to Q3-09 period (184,700).

But is labour force decline the primary factor behind the recent slowing in the rate of unemployment-increase? The reduction in the size of the labour force during the Q3-08 to Q3-09 period (64,300) is roughly one third the size of the reduction in the number of employed individuals (184,700); and more than three times the outflow of Irish nationals in the year to April '09 (18,400). There is no doubt that the recent decline in the labour force (64,300) is a contributory factor in the recent slowing of unemployment-increase; however, it is not the primary factor. The primary factor seems to be that the country is simply losing jobs at a slower rate than in previous quarters. Despite this, it is important to remember that we are still enduring increments to an unemployment rate that is absolutely large.