Climbing the Jobs Ladder Slower: Young People in a Weak Labour Market

Abstract

Abstract The downturn in Australia's labour market from 2008–2018 was reflected in dimensions other than unemployment. We use the Household Income and Labour Dynamics in Australia data set to explore one key dimension—occupational choice. Using an occupational ranking (AUSEI06) based on earning potential and education level, we show young graduates (aged 20–35) found work in lower‐scored occupations after 2010. We examine potential heterogeneity of the occupational outcomes using Markov transitions between quartiles of the occupational distribution. We find the likelihood of transitioning to better quartiles worsened over the 2001–2018 period, suggesting poor initial outcomes can have long‐term effects on one's occupation.