Figure 2.11 presents net estimated unemployment rates across age groups in 2007 and 2012. Unemployment rates have increased for all age groups in this time frame. Accounting for education, geographic location and the other equality grounds, the net estimates of unemployment are particularly high for the 15 to 19 (24 per cent) and 20 to 24 (23 per cent) age groups. In terms of age, those aged between 15 and 34 are more likely to be unemployed compared with those aged 35 to 44, and the disadvantage of the younger age groups has increased significantly over time relative to those aged 35 to 44.
The experience of being jobless has been shown to leave ‘scars’ on future career outcomes, like lower wages, and also impacts on a number of other outcomes, such as happiness, job satisfaction and health, many years later (Arulampalam, 2001; Scarpetta and Sonnet, 2010). The unemployment risk for young people should be interpreted in the context of their low and falling levels of participation. The unemployment rates of the 20- to 24-year-old age group applies to a substantially larger proportion of that age group who are active in the labour market compared with those aged under 20. The youth unemployment rate can be misleading as a large share of young people are not in the labour market (83.4 per cent in Q4 2012); therefore the unemployment rate figure represents a small proportion of the cohort. As an alternative estimate of youth unemployment some analysts prefer to use the
‘unemployment proportion’ or ‘unemployment ratio’ – the proportion of the whole cohort that is unemployed – as a more accurate reflection of the impact of a recession on young people. This calculates unemployment with all young adults as the denominator, rather than young people in the labour market. The youth (aged 15–24) unemployment ratio in Ireland in 2012 is 12.3 per cent compared with an unemployment rate of 30.4 per cent (Eurostat, 2013).
Figure 2.11 Net Unemployment by Age Group, 2007 and 2012 (model-
estimated controlling for other factors)
Source: QNHS Data, Q4 2007 and Q4 2012.
Notes: Base = persons active in the labour market aged 15 to 64 years. Analysis by authors. See Table A2.4 in the appendix to this chapter for the full probit model underlying the model-estimated figures. Total N of cases unweighted = 60,523.
(r) indicates reference category.
* indicates that the group differs significantly from the reference category in the model-estimated figures.
∆ indicates the change over time differed from the overall change over time (i.e. significant interaction) in the model- estimated figures. Excludes economically inactive.
The 45 to 54 and the 55 to 64 age groups experienced signficantly lower levels of unemployment compared with the 35 to 44 age group. The gap in unemployment rates between the 35 to 44 and 55 to 64 age groups increased significantly over time. Older people in employment enjoy a degree of protection; therefore, their rate of job-loss tends to be lower than that of young people, particularly those who are newly hired and have little protection (Hogarth et al., 2009).
Do these age differences vary for men and women? The gross unemployment rates (see Figure A2.3 in the appendix to this chapter) are larger for young males than females, with young males aged 15–19 reporting an unemployment rate of 37.3 per cent in 2012, and young females aged 29 per cent in 2012. However, modelled unemployment risks for young women are similar to those for young men, and have risen sharply between 2007 and 2012, as they did for men (see Figure 2.12). For women over 25, the situation is different: unemployment has risen between 2007 and 2012, but the rise has not been as marked as for men. Indeed for women over 25, the modelled unemployment risk in 2012 falls sharply with age, the lowest risk being for the 55–64 age group.
Figure 2.12 Unemployment by Age for Men and Women (model predicted
probabilities)
Source: QNHS Data, Q4 2007 and Q4 2012.
Notes: Base = persons aged 15–64. Analysis by authors. Full models available on request. Total N of cases unweighted = 60,523.
Why do the descriptive unemployment rates differ from the modelled rates? The main reason is the educational advantage of young women. In 2012, just under 40 per cent of 20– 24 year old women in the labour market had third-level education, compared with only 22.5 per cent of men (Table A2.5 in the appendix to this chapter). Gender differences in education are not so marked for the 15-19 age group, though here too differences appear: 32 per cent of women aged 15–19 had no qualifications or lower secondary compared with just under 37 per cent of men (see Table A2.5). Both men and women aged 15–19 participating in the labour market are relatively disadvantaged compared with older age groups, but this is because most men and women in this age group are not participating in the labour market, as they are continuing their education, especially women (see Figure 2.2). Those who are participating in the labour market have left the educational system already. These unemployment rates should be seen in the context of different labour force participation patterns. As discussed in Section 2.4, labour market participation varies considerably across age groups, particularly among women. Participation is lower among the 55–64 age group than ‘prime age’ women, and these women are a positively selected group, with the lower educated women not participating. Conversely, participation rates among women under 25 are very low indeed, and female labour market participants in this age group are a comparatively disadvantaged group, as higher educated women are still in further education. The youngest age groups have the lowest participation rates and also display the sharpest drops in activity over the crisis period.