3  Data and definitions

New Zealand follows international standards in defining the labour force.[4] Statistics New Zealand counts people as being in the labour force if they are either employed or unemployed, according to the following definitions.

Employed: people who, in the week covered by the census or survey, worked for one hour or more for pay or profit, or who worked unpaid in a family business or farm. People are counted as employed if they had a job but were not at work for reasons such as leave, sickness, or industrial action. Full-time workers are those who usually work 30 hours or more per week; part-time workers are those who usually work fewer than 30 hours per week.

Unemployed: people who, in the week covered by the census or survey, were without a paid job, were available for work, and had actively sought work in the previous four weeks, or had a new job to start within four weeks. A person whose only method of searching for a job has been to look at advertisements in the paper is not considered to be actively seeking work and is therefore not counted as unemployed.

The remainder of the population (that is, people who are not employed or unemployed) are classified as being “not in the labour force”. For a particular group, the labour force participation rate (or simply the “participation rate”) is the percentage of that group who are in the labour force; the employment rate is the percentage of the group who are employed.

Some people aged under 15 are undoubtedly working—on a paper round, for example—but little information on children’s employment is collected in New Zealand. In all OECD countries, people aged 65 and over have relatively little involvement in the labour force. The New Zealand and international analysis in this paper is therefore confined to people aged 15 to 64 years.

New Zealand data on labour force participation comes from two main sources: the Census, which is conducted every five years, and the Household Labour Force Survey (HLFS), which is conducted every quarter. The New Zealand data presented in Section 4 is from the latest Census, in 2001. A large amount of Census information on labour force status, analysed by demographic, family and parental characteristics, is readily available from the Statistics New Zealand website,[5] although some additional tables were commissioned specially for this paper. Using the Census also means that sampling errors do not have to be considered.

It is worth keeping in mind that the Census and the HLFS are “snapshots” of the population at a particular point in time and that individuals move between labour force states. For example, of the people who were not in the labour force in the December 2002 quarter of the HLFS, 12% had moved into the labour force by the following quarter (Statistics New Zealand 2003).[6] Readers should also be aware that the participation rates reported in the Census and the HLFS are not identical: in particular the HLFS reports slightly lower participation rates for both younger (aged 15-24 years) and older (aged 55-64 years) age groups. The growth in women’s participation since 1986, when the HLFS commenced, has also been lower than that reported in successive censuses.

The international data presented in Section 5 is collected from member countries by the OECD and is updated each year.[7] New Zealand contributes data from the HLFS. Other countries contribute data from a variety of different surveys. Given the measurement differences between countries it is best to exercise some caution when using these data, and not to place too much emphasis on relatively fine distinctions. Following Bryant et al (2004), and Gruen and Garbutt (2003), we exclude Korea, Mexico, the Slovak Republic, Turkey, Luxembourg and Hungary from all our comparisons.[8] All data in Section 5 are from 2003 (the latest available year) unless otherwise stated.