The unmet activation potential of Australia's labour market

Australia’s labour market has performed well over the past 15 years and its labour force participation rate continuously increased over this period and ranks well above the OECD average. While Australia was impacted less by the global financial crisis than most other OECD countries, the commodity price bust led to a deterioration of the labour market and it only started to recover as of 2015. Not all of Australia’s states and territories and sub-regional levels have recovered to the same degree and retrenchments due to economic reason have again increased over the past years. Furthermore, the chapter identifies some unmet activation potential more generally in Australia’s labour market. Mobilising this potential in the future will bring Australia’s labour force participation closer to that seen in the OECD’s vanguard countries. Areas of untapped potential are especially prime-age women, mature age workers, people with disabilities and mental health conditions, as well as Indigenous Australians.