Halving the gap in employment outcomes between Indigenous and non-Indigenous Australians over the decade beginning in 2008 is one of six COAG targets set to address Indigenous disadvantage. To understand better the labour market outcomes of Indigenous and non-Indigenous Australians, and the human and social capital factors influencing those outcomes, the Productivity Commission has undertaken an analysis using the 2006 Census. The labour market indicators studied are participation, unemployment, hours worked and total personal income. For each of these indicators, separate regressions are estimated for Indigenous males, Indigenous females, non-Indigenous males and non-Indigenous females.

The evidence indicates that education is an important influence on labour market outcomes. Completion of secondary and any level of tertiary education improves labour market outcomes significantly. The estimated marginal effects are significantly larger for Indigenous persons compared with non-Indigenous persons. The evidence also indicates that a number of social factors impact on labour market outcomes, such as remoteness, the number of young children and the need for assistance with disability.