3  The Data

The Household Economic Surveys 1991-92 to 2000-01, all released by Statistics New Zealand (NZSTATS), have been used for the analyses. These surveys were released on a yearly basis from 1991/92 to 1997/98, but are currently undertaken only once every three years. The survey collects information on the sources and amounts of income received by persons resident in private dwellings throughout New Zealand, along with data on a range of characteristics for all individuals within the household. Individuals in each household are linked by a household number and family number, so that household characteristics such as income and the number and age of children can be derived by using information from other records in the same household. The detailed information on income allows the budget constraint to keep its full complexity. In order to combine the ten years into input for one model, the monetary variables from 1991/1992 to 2000/2001 are converted to the December 2001 level[10]. Furthermore, the observed nominal wages in these survey years are adjusted by the average wage increases for men or women as relevant.

The survey is held continuously over the year with around 2000 individuals interviewed every quarter during the financial year, except for 1992/93 when over 3000 individuals were surveyed per quarter. In the surveys from 1991/92 to 2000/01, information is available for 68,711 individuals.

3.1  Selection Criteria

In this section, the selection criteria to be included in the sample of analysis are discussed for each of the four groups.

The criteria for the first group, work-age couples, are the following:

• Only income units that consist of a man and a woman with or without dependants are included.[11]
• Self-employed are excluded from the analyses. For self-employed the relationship between total earned income and labour supply is not as simple as for many wage and salary earners, where total earned income equals labour supply multiplied by the wage rate.
• People 65 years and over, who are eligible for government age pensions in the current system, are excluded. They are expected to behave differently from younger people. In the earlier survey years, individuals were eligible for the New Zealand Superannuation at the younger age of 60 years, but this was gradually increased to 65 years of age[12]. This change during the survey period provides an opportunity to examine the effect of this policy change on the preference for work of individuals aged between 60 and 64.
• All people temporarily or permanently unable to work because of illness or disability are excluded from the analysis.
• All full-time students are excluded.

The criteria for the second group, working-age single men, are the same as above with the first criterion replaced by income units that consist of one adult man without dependants. The criteria for the third group, working-age single women, are also the same as above but with the first criterion replaced by income units that consist of one adult woman without dependants. Finally, the criteria for the fourth group, working-age sole parents, are the same as above with the first criterion replaced by income units that consist of single adults with dependants.

Missing values or outliers (which may be measurement errors) result in the deletion of a few additional households, all households who have zero net income or more than 4000 dollars at zero hours of work are excluded[13]. After this selection, a data set of 10250 couples is left for the labour supply analysis in group 1; 5671 single men in group 2; 4596 single women in group 3; and 1822 sole parents in group 4.

3.2   Distribution of hours worked

Hours of work is the dependent variable in this analysis. Figures 1 and 2 give frequency distributions of male and female working hours in the samples for the different groups. The difference between men and women is as expected. Relatively more women work part time and more men work full time (especially over 42.5 hours per week) in the different subsamples. There is also a clear difference between singles and couples.

Figure 1 – Labour supply of men

Single men are more likely to be non-participants or work part time than men in couples. They are also less likely to work more than 42.5 hours and in particular to work more than 47.5 hours per week.

Figure 2 shows that single and married women have different hours distributions. Single women work more hours and are less likely to work part time or be out of the labour force. The sole parents in this figure also contain sole fathers, which is a rather small group. Sole parents are by far the least likely to participate in the labour force and if they participate they are more likely than the other groups to work relatively few hours.

Figure 2 – Labour supply of women and sole parents