Treading water: effects of the COVID-19 pandemic on youth transitions

Description

Economic downturns have pronounced impacts on young people. Using data from the Longitudinal Surveys of Australian Youth (LSAY), this report examines the effects of the COVID-19 pandemic on the education, employment, and social circumstances of young Australians. Comparisons with historical data suggest that the pandemic prevented young Australians from making the typical transitions for their age group, with adverse effects on their wellbeing.

Summary

Summary of key findings

The COVID-19 pandemic has posed severe challenges to health systems and economies around the world. While Australia has fared better than many countries in limiting collective and individual hardship, the impact of personal losses and lockdowns, along with a drastically changed global environment, has had a toll on young Australians especially. As with all economic downturns, young people have been particularly exposed to unemployment, lost earnings and reduced opportunities for education and social wellbeing.

The Longitudinal Surveys of Australian Youth (LSAY) provide insight into the lived experiences of young Australians during the COVID-19 pandemic. The most recent LSAY cohort were about 20 years old in 2020, during the first wave of the pandemic in Australia. In this report, we explore changes in education, employment, financial circumstances, social circumstances, and wellbeing between 2019 and 2020 (that is, ages 19 to 20 for this cohort). To assess the possible effects of the pandemic against an historical context, we compare the 2019—20 transition with three previous LSAY cohorts: those who were aged 19 and 20 in 2013—14, in 2010—11, and in 2007—08. [1]

Based on historical data, the transition from age 19 to 20 would typically see: no significant change in the aggregated rates of participation in higher education; decreases in participation in vocational education and training (VET), including study towards an apprenticeship or traineeship; decreases in proportions living in the family home (as opposed to, for example, renting or buying their own home); an increase in aggregated employment rates; an increase in average weekly hours worked; a decrease in unemployment; and an increase in permanent or ongoing employment. Departures from these ‘typical’ trends for the 2019—20 group may indicate effects of the pandemic.

In general, the COVID-19 pandemic appears to have prevented many young Australians from making the same transitions as previous cohorts at the same age. Between 2019 and 2020, there was:

• A significant increase, of 3.2 percentage points, in the proportion of young people who were engaged in higher education, which was not observed at the equivalent ages for previous cohorts. Research suggests that young people may ‘retreat’ to higher education in times of economic uncertainty, offsetting short-term losses of earnings with increased longer-term earning potential.
• No significant change in the employment rates of young people, when a small increase would have otherwise been expected. That no decrease was recorded, despite widespread restrictions, may be attributable to the JobKeeper payment, which kept employees connected with their employers via wage subsidies. In 2020, 23.7% of 20-year-olds reported they were in receipt of JobKeeper, representing 29.9% of those employed.
• No significant change in the proportions of young people who were in permanent or ongoing employment, when an increase of between 4.4 and 5.4 percentage points would have otherwise been expected. This may suggest that the labour market uncertainty resulting from the pandemic prevented young Australians from transitioning to more secure roles.
• A significant increase of 3.6 percentage points in the youth underemployment rate, compared with a decrease of 3.0 percentage points at the same ages for the previous cohort (2013—14). This suggests that the primary effect of the pandemic on youth employment was that young people were unable to work as many hours as they preferred.

Also, of note from the 2020 data were that:

• The pandemic appears to have had a pronounced effect on young people’s mental health. In 2020, 23.3% of 20-year-olds met the criteria for probable serious mental illness, compared with 7.1% of 20-year-olds in 2014. Being female (29.4%), unemployed (45.8%), in no type of study (28.4%) and reporting no available forms of social support (51.0%) were associated with probable mental illness.

Almost nine per cent (8.9%) of 20-year-olds reported having to move in with their parents or other relatives due to the government restrictions associated with the COVID-19 pandemic; 5.4% reported having to move elsewhere, such as in with friends or a partner.

1. Data for 2016—17 are absent because there was no LSAY cohort at that time.