Hours worked, hours preferred and individual level changes in both

Each year, the HILDA Survey obtains from all employed persons not only their usual weekly hours of work, but also their preferred hours of work. This facilitates examination of a variety of aspects of working hours, including how hours worked and preferred by individuals change over time. Table 14.1 provides information on working hours, showing the average of usual weekly hours (in all jobs) of employed persons in each wave, disaggregated by sex and age group. Average weekly hours worked remained fairly stable during this period, at around 42 hours per week for males and 32 hours per week for females. For males who were working full-time, average working hours dropped from 48 hours per week in 2001 to 46 hours per week in 2009, but for females working full-time, average weekly work hours remained quite stable, at around 43 hours per week. While average full-time working hours were higher for males than for females, the opposite is true for part-time workers, with females who were working part-time working longer hours than males who were employed on a part-time basis. For males who were working part-time (less than 35 hours per week), average weekly working hours increased slightly, from 18 hours per week in 2001 to 19 hours per week in 2009, and for females who worked part-time, average weekly working hours remained steady at approximately 19 hours per week during the period from 2001 to 2009.

In 2009, as in previous years, ‘prime-age’ males (aged between 25 and 54), work the longest hours. The average weekly hours for work for prime-age males decreased slightly during this period, from 46 hours per week in 2001 to 44 hours per week in 2009. Average working hours for older males also declined by approximately 2 hours between 2001 and 2009. Among employed males aged between 15 and 24, many of whom will still be in full-time education, average working hours increased from 32 hours per week in 2001 to 34 hours in 2008, but dropped back to 32 hours per week in 2009. Females aged between 25 and 54 average around 34 hours of work per week, com- pared to around 26 hours per week for females aged between 15 and 24 and 31 hours per week for females aged between 55 and 64. Among females aged 65 and over, many of whom will be in partial retirement, average working hours ranged from 19 hours per week in 2003 to 23 hours per week in 2001 and 2007.

Individual changes in working hours

How much do working hours change from one year to the next? Table 14.2 shows the changes in working hours from 2008 to 2009. The single most common outcome in 2009 was for individu- als to be in the same hours category as they were in 2008. However, large proportions do change

hours categories—albeit often by increasing or decreasing hours worked only enough to move one category up or down.

Those working part-time and those working long (over 45) hours are particularly likely to change hours categories. Most commonly, the change is an increase in hours for persons employed part- time and a decrease in hours for persons working long hours. For example, almost half of the males and over 30 per cent of females who were work- ing fewer than 10 hours per week in 2008 had increased their working hours by 2009. Of those

working 55 to 64 hours per week in 2008, 44.8 per cent of males and 54.6 per cent of females were working fewer than 55 hours per week in 2009.

Preferred hours of work

Are most people happy with the hours they work? Figure 14.1 shows the proportion of prime-age employees who were working their preferred

hours, and those who were not, in 2009.1

Approximately 60 per cent of all prime-age employees were content with their working hours

Table 14.1: Mean usual weekly hours of work in all jobs, by sex, age and employment status

2001 2003 2005 2007 2008 2009 Males All males 42.8 42.3 42.1 41.6 42.0 41.3 Age group 15–24 31.6 31.7 32.5 32.8 33.5 32.2 25–54 45.8 45.3 44.9 44.5 44.9 44.3 55–64 42.8 42.7 41.7 40.5 41.4 40.6 65 and over 33.0 34.0 31.8 30.7 28.7 30.9 Employment status Full-time 47.8 47.4 46.6 46.4 46.3 46.0 Part-time 17.7 18.0 18.0 18.4 18.3 18.6 Females All females 31.7 31.1 31.2 31.8 31.7 31.5 Age group 15–24 26.4 24.7 26.5 26.0 26.2 25.1 25–54 33.3 33.4 32.9 33.8 33.6 33.8 55–64 30.9 30.6 30.6 31.5 31.3 30.5 65 and over 22.7 18.5 21.4 23.2 21.3 21.0 Employment status Full-time 43.3 43.4 43.2 42.9 42.5 42.8 Part-time 18.6 18.3 18.8 19.1 18.9 18.9

Table 14.2: Changes in usual weekly working hours (in all jobs), 2008 to 2009 (%) Work hours in 2009

Work hours in 2008 0 1–9 10–19 20–34 35–44 45–54 55–64 65 and over Total Males 0 86.6 1.8 2.0 3.1 4.3 1.7 *0.3 *0.3 100.0 1–9 23.8 38.1 16.2 *9.0 *10.3 *0.3 *2.4 *0.0 100.0 10–19 22.9 14.3 36.6 12.8 *7.9 *4.1 *0.9 *0.4 100.0 20–34 15.8 *2.4 7.4 45.2 22.3 *3.8 *1.0 *2.1 100.0 35–44 5.2 *0.4 *0.9 5.8 69.7 14.4 *2.4 *1.1 100.0 45–54 3.0 *0.2 *0.8 *2.0 27.2 52.7 12.1 2.0 100.0 55–64 *2.2 *0.1 *0.5 *1.3 9.4 31.3 42.1 13.1 100.0 65 and over *2.1 *0.0 *0.0 *1.6 *13.4 10.3 27.6 45.0 100.0 Total 29.9 2.1 2.9 6.3 30.2 17.7 7.4 3.4 100.0 Females 0 88.3 2.2 3.2 3.5 1.9 *0.7 *0.1 *0.1 100.0 1–9 25.6 43.7 20.5 6.8 *2.4 *0.7 *0.2 *0.0 100.0 10–19 13.8 12.8 40.2 23.1 8.3 *0.8 *0.5 *0.5 100.0 20–34 7.7 2.8 8.7 60.3 18.2 *1.5 *0.4 *0.3 100.0 35–44 7.2 *0.6 1.9 11.7 67.7 9.2 1.4 *0.4 100.0 45–54 7.7 *0.2 *0.4 4.2 25.7 48.4 9.3 *4.1 100.0 55–64 *3.1 *0.0 *0.5 *7.4 *16.6 25.8 36.5 *9.9 100.0 65 and over *2.4 *0.0 *0.0 *1.0 *8.4 *13.1 *32.3 42.8 100.0 Total 42.3 4.5 7.4 15.1 21.2 6.6 2.0 0.9 100.0

in 2009. Among full-time employees, males are more likely to be satisfied with their working hours than are females, but among part-time employees, females are more likely to be satisfied with their working hours. In particular, 40 per cent of female full-time employees prefer fewer hours, compared with 31 per cent of male full-time employees, whereas 45 per cent of male part-time employees prefer greater hours, compared with only 26 per cent of female part-time employees.

Do people who are not working their preferred hours eventually get the hours they want? Using the HILDA Survey data to compare working-time pref- erences in 2002 and 2004, Wooden (2006) found that while in any year 40–45 per cent of employees were not working their preferred hours, many were working preferred hours a few years later. He found, however, that over-employment—a prefer- ence for fewer hours—was more persistent than underemployment—a preference for more hours. Table 14.3 shows the working-time preferences in 2008 and 2009 of prime-age individuals, according to their preferences in the previous year. This allows examination of the proportions of those with mis- matches between preferred and actual working-time

who had resolved their mismatches one year later— be this by changing hours worked and/or changing their preferred hours—as well as the proportions of those without mismatches for whom mismatches arose. Note that all prime-age males and females are included in the sample. Those who are unemployed or marginally attached are considered to prefer more hours, and those who were not in the labour force and not marginally attached are considered to be satisfied with their (zero) working hours.

Table 14.3 indicates that a preference for fewer hours is the most difficult working-time preference problem to resolve. Almost 60 per cent of males and females who preferred fewer hours in 2008 were in the same situation in 2009. Slightly more readily resolved is the problem of unemployment or underemployment, whether by increasing actual hours or decreasing preferred hours.

Preferences for more hours were more easily resolved between 2007 and 2008 than between 2008 and 2009, presumably due to a reduced demand for labour in 2009 as a result of the Global Financial Crisis. On the other hand, the proportion of males who were able to resolve a Preferred hours of work

A difficulty in eliciting individuals’ preferred hours of work is that many people are inclined to say that they would like to not work at all, despite clearly choosing work over non-work. To overcome this problem, the HILDA Survey asks respondents the number of hours per week they would like to work, taking into account the effect this would have on their income.

Figure 14.1: Work hours preferences of prime-age employees, 2009

0 10 20 30 40 50 60 70 % Working full-time Working part-time All Working full-time Working part-time All Males Females

situation in which they were overemployed increased from 38 per cent between 2007 and 2008 to 42 per cent between 2008 and 2009. However, this is not the case for females, with 45 per cent resolving their preference for fewer hours between 2007 and 2008 and 44 per cent doing so between 2008 and 2009.

Changes in underemployment and overemployment over time

In Figure 14.2, the proportion of prime-age males and females who are either underemployed or

overemployed in each year from 2001 to 2009 are presented, along with the unemployment rate in September of the corresponding year.

Among prime-age males, overemployment

increased from 29 per cent in 2001 to 32 per cent in 2004, before decreasing to 26 per cent by 2009. During this period, the rate of unemployment for prime-age males decreased from 7 per cent in 2002 to 4 per cent in 2007. At the same time, the pro- portion of prime-age males who expressed a pref- erence for working more hours declined from just under 20 per cent to only 13 per cent. Then, as

Table 14.3: Changes in preferred working hours of prime-age individuals, 2007 to 2008 and 2008 to 2009 (%) Preferences in the following year

Prefer fewer hours Prefer current hours Prefer more hours Total 2007 to 2008

Males

Prefer fewer hours 61.7 33.1 5.2 100.0

Prefer current hours 16.3 74.1 9.6 100.0

Prefer more hours 9.6 44.8 45.6 100.0

Total 28.2 58.6 13.2 100.0

Females

Prefer fewer hours 54.8 40.9 4.3 100.0

Prefer current hours 14.7 72.1 13.3 100.0

Prefer more hours 9.0 45.6 45.4 100.0

Total 22.9 60.2 16.9 100.0

2008 to 2009 Males

Prefer fewer hours 57.7 37.1 5.2 100.0

Prefer current hours 16.6 73.0 10.4 100.0

Prefer more hours 4.1 43.1 52.8 100.0

Total 26.3 58.7 15.0 100.0

Females

Prefer fewer hours 56.1 37.7 6.2 100.0

Prefer current hours 12.0 74.9 13.1 100.0

Prefer more hours 5.3 43.2 51.5 100.0

Total 21.1 60.7 18.2 100.0

Note: Percentages may not add up to 100 due to rounding.

Figure 14.2: Proportion of prime-age males and females overemployed and underemployed, 2001 to 2009

Note: Unemployment rates are obtained from ABS (2011). 0 5 10 15 20 25 35 30 0 5 10 15 20 25 35 30 2001 2002 2003 2004 2005 2006 2007 2008 2009 % Males 2001 2002 2003 2004 2005 2006 2007 2008 2009 % Females Overemployed Underemployed Unemployment rate

rates of unemployment began to increase, under- employment increased to 14 per cent in 2008 and 17 per cent in 2009.

For women, underemployment and overemploy- ment do not appear to be as closely related to the

unemployment rate as they are for men.2_{The pro-}

portion of prime-age women who were underem- ployed declined steadily from 25 per cent in 2001 to 17 per cent in 2008, then increased to 18 per cent in 2009. After falling from 21 per cent in 2001 to 19 per cent in 2002, overemployment among prime-age females increased to 23 per cent in 2006, before falling again to 20 per cent by 2009.

Changes in actual working hours

Table 14.4 examines how working hours change from one year to the next—specifically, whether they decreased, increased or stayed the same—for prime-age men and women based on their working- time preferences in the previous year.

Among those who had a preference for fewer hours in 2007, 46 per cent of men and 49 per cent of women were actually working fewer hours in 2008 than they were in 2007. However, among those who expressed a preference for fewer hours in 2008, only 41 per cent of males and 47 per cent of females had reduced their working hours one year later, and 29 per cent of males and 28 per cent of females were actually working more hours than they were in 2008.

A preference for more working hours appears to have been more easily resolved between 2007 and

2008 than between 2008 and 2009. Again, this is likely to be a result of a reduction in demand for labour due to the Global Financial Crisis. It is also interesting to note that while men were more likely to have resolved issues of underemploy- ment, women were more likely to have overcome issues of overemployment. Among those who had a preference for more hours in 2008, only 37 per cent of men and 35 per cent of women were actu- ally working more hours one year later, while almost 20 per cent of the individuals who had expressed a preference for more hours in 2008 were actually working fewer hours in 2009.

Endnotes

1 People who were self-employed were excluded from the hours preference analysis as it is assumed that they ultimately have control over their own working hours. The analysis is further restricted to prime-age persons to avoid the complication of younger people moving from part-time work (and full-time education) to full-time work, and older people reducing their working hours before they gradually retire.

2 Note that individuals who are unemployed and actively seeking employment are considered to be underem- ployed as they have a preference to work more hours than the zero hours they are currently working.

References

Australian Bureau of Statistics (2011) Labour Force, Australia, Catalogue No. 6202.0, ABS, Canberra. Wooden, M. (2006) ‘Working Time: Insights from HILDA’, Presentation at the Melbourne Institute Public Economics Forum, Canberra, 21 September.

Table 14.4: Changes in actual working hours of prime-age persons, 2007 to 2008 and 2008 to 2009 (%) Change in working hours

Hours decreased No change in hours Hours increased Total 2007 to 2008

Males

Prefer fewer hours 46.2 31.1 22.7 100.0

Prefer current hours 26.4 41.5 32.1 100.0

Prefer more hours 18.1 34.6 47.4 100.0

Total 30.9 37.6 31.5 100.0

Females

Prefer fewer hours 49.2 23.4 27.5 100.0

Prefer current hours 23.4 47.1 29.5 100.0

Prefer more hours 15.0 43.2 41.9 100.0

Total 27.8 40.9 31.2 100.0

2008 to 2009 Males

Prefer fewer hours 40.9 30.5 28.6 100.0

Prefer current hours 30.2 40.8 29.1 100.0

Prefer more hours 19.4 44.1 36.5 100.0

Total 31.6 38.4 30.0 100.0

Females

Prefer fewer hours 46.5 25.5 28.0 100.0

Prefer current hours 26.6 45.7 27.7 100.0

Prefer more hours 18.0 47.4 34.6 100.0

Total 29.8 41.3 28.9 100.0

In the mid-1990s attention was drawn by researchers to a significant and apparently grow- ing phenomenon in Australia of jobless house- holds (Gregory and Hunter, 1995; Dawkins, 1996). The research highlighted that joblessness, as dis- tinct from unemployment, was particularly preva- lent among households with dependent children. This raised the specific concern that, if children grow up in households in which there is no role model in the world of work, they may be more likely to become jobless themselves (Gregory and Hunter, 1995; Headey and Verick, 2005).

With nine years of data now available, the HILDA Survey provides unique evidence for Australia about persistence and recurrence of household joblessness. Prior to the arrival of the HILDA Survey, nearly all evidence was cross-sectional, providing no information on the extent and nature of the more serious policy issue of long-term job- lessness. Long-term jobless families probably tend to suffer not only material deprivation, but also some degree of social exclusion. Adverse implica- tions for children living in long-term jobless households also seem likely, with available evi- dence suggesting intergenerational transmission of joblessness and welfare dependence is a signifi- cant problem (e.g. Gottschalk, 1992; Blanden and Gibbons, 2006; Jenkins and Siedler, 2009). In this chapter, we examine the prevalence and persistence of household joblessness using two measures, one relating to the ‘current’ period—