Older Male Labour Force Participation: The Role of Social Security and Hidden Unemployment

Abstract

This paper examines the role played by social security provisions and hidden unemployment in influencing trends in older male labour force participation in Australia. The paper concludes that labour demand constraints have been the dominant explanatory force behind the decline in older male labour force participation rates over recent decades in Australia. The results presented in the paper challenge the consensus developed in previous Australian studies that labour supply incentives have been the primary force influencing movements in older male labour force participation rates. Furthermore, various estimates of older male hidden unemployment presented in the paper suggest that potentially large unemployment rates are concealed beneath relatively modest 'official' recorded estimates. Total (hidden plus recorded) unemployment rates of over 25 per cent for males aged 55-59, and 40 per cent for males aged 60-64 are estimated. The results presented in the paper challenge the supply side policy stance toward older workers' labour force participation adopted for an ageing society setting.