University Of Tasmania
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Skill utilisation in Australia : a response to the proposed 3Ps solution to the implications of population ageing

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posted on 2023-05-28, 10:17 authored by Lisa DennyLisa Denny
The solution proposed by successive Australian governments to the challenges of an ageing demographic is to foster economic growth through a policy framework designed to increase the Three Ps (3Ps) ‚Äö- productivity, participation and population. Raising the skill level of a population has become the primary objective of national economic policies to increase productivity, yet current understandings of the optimal use of skills are limited and based on a relatively weak knowledge base. This thesis explores whether the existing complement of education and skills held by Australians is being effectively utilised in the Australian labour market to determine the existence of any foregone productivity growth. The return on human capital investment in the form of skill utilisation is an indicator of potential successful life outcomes for an individual over their life course, and is also as an indicator for macro-level productivity performance and for economic and social well-being. Using a conceptual framework based on human capital theory and principles of the life course, this thesis develops an indicator of skill utilisation which enables analysis of the Australian population aged 25 to 64 years of age with post-school qualifications. The indicator also enables the type of skill mis-utilisation to be identified; either field of study mismatch (skill mismatch), over-qualification or under-qualification (education mismatch) or a combination of skill mismatch and education mismatch. Skill utilisation is examined by occupation, labour force status, educational attainment, field of study and sex. Using demographic and life course variables, the thesis explains how factors such as ageing, the presence of a partner, and/or the presence of a child affect skill utilisation over the lifespan, how the experience differs for men and women, and how they engage with work. The thesis finds that just two in five Australians are effectively utilising their complement of skills in the workforce. In other words, three in five Australians are not maximising their potential successful life outcomes, compromising productivity performance at the macro level. Those employed full time experienced the highest level of skill utilisation ‚Äö- predominantly men. Skill utilisation was the lowest for those employed part time (and not employed at all) ‚Äö- predominantly women. Notably, those employed part time were twice as likely to experience a combination of field of study mismatch and over-qualification as those employed full time. Regardless of human capital accumulation, it is the presence of a partner and/or the presence of a child and the associated level of engagement with the workforce, different for men and women, which is ultimately correlated with the level of skill utilisation experienced by each population group. The high level of under-utilisation of skills in Australia suggests further investment in education and skills will not automatically equate to improved productivity. Targeted skill investment and the improvement of skill utilisation, as well as workplace reform, are viable, complementary policy alternatives for increasing productivity, and subsequently economic growth, in response to the challenges of an ageing population.


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