Hunter, BoydAustralian National University. Centre for Aboriginal Economic Policy Research2003-03-212004-05-192011-01-052004-05-192011-01-051036-1774http://hdl.handle.net/1885/41388In a purely economic sense, unemployment in the Australian community is extremely costly. The costs of unemployment will be particularly pronounced if its social, psychological, and economic impacts are concentrated among long-term unemployed and if its effects spill over onto other family or community members. This paper analyses evidence from the 1994 National Aboriginal and Torres Strait Islander Survey (NATSIS) to illustrate the point that such effects are potentially very large in Indigenous households with a substantial concentration of unemployed residents. In spite of the fact that NATSIS is now somewhat dated, it provides a range of social, cultural and economic data that are not available from other sources. This paper uses the international literature on social exclusion and social capital to analyse and interpret NATSIS data on several social indicators, including arrest rates, police harassment and being a victim of assault; being a member of the 'stolen generation'; civic engagement; the loss of motivation; and ill-health. The unprecedented range of social indicators included in the NATSIS allows the analysis to provide an insight into the likely social costs of unemployment in the population at large, not just among the Indigenous population. While the meaning of the term social exclusion appears to be intuitively fairly obvious, being closely related to its literal interpretation, 'social capital' it needs to be carefully defined. The recent McClure Report on the direction of welfare reform provides a rudimentary definition: 'the reciprocal relationships, shared values and trust, which help to keep societies together and enable collective action' (McClure 2000: 32). Before uncritically importing terms such as these into an analysis of the costs of Indigenous unemployment, it is necessary to discuss how useful they are in a cross-cultural context. For example, not having any employment in the Australian labour market may actually empower many traditional Indigenous peoples to hunt, fish, paint, and live on the country. Indeed, the extra hours of 'spare' time may facilitate more extensive participation in ceremonial activities, thus increasing what may be defined in the Indigenous context as 'social capital'. Nor should employment be viewed as automatically contributing to social capital. Some forms of employment actually diminish the extent of shared values and trust referred to above. Work which involves or leads to frequent movement of the workforce, such as some types of casual or seasonal work, could uproot the worker's family and thus weaken their links to the local community. Clearly then, the relationship between social capital and unemployment is not simple, even in a mono-cultural context.396097 bytesapplication/pdfen-AUAuthor/s retain copyrightIndigenous Australianssocial exclusionsocial capitalunemployment2000