3.5  Labour force participation

In the context of the present study, an important aspect of the HWR dataset is the split between those who are still working, and those who are retired. Unfortunately the distinction is not clear cut.[11] In part this reflects the fact that increasingly there is no universal “age of retirement” implying a clean break from the labour market. There are a number of possible criteria for defining “retirement”. Banks and Smith (2006) identify the following:

• complete and permanent withdrawal from any paid employment
• being in receipt of a public or private pension
• a state of mind in which individuals perceive themselves as retired.

This section describes in some detail the classification of the data and the derivation of the working and retired subsets. There are two critical questions in the survey that could be used to define this split. The first is:

Do you consider yourself partially retired, completely retired or not retired? (Q49)

for which respondents were given the choice of:

• Not retired at all
• Partly retired
• Completely retired

At a later stage of the questionnaire respondents were asked:

What is your current work situation? (Q74)

to which they could respond according to the following options:

• Full-time paid employment including self-employment
• Part-time paid employment including self-employment
• Retired, no paid work
• Full-time homemaker
• Full-time student
• Unemployed and seeking work
• Not in the workforce

The results of these questions overlap significantly. Some of those who responded that they are completely retired subsequently recorded that they were in full- or part-time paid work. It is possible that they may have viewed being retired as meaning to have attained the age of eligibility for NZS. Furthermore, some who did not consider themselves retired were nonetheless retired as they undertook no paid work.

Table 3-6 summarises the responses from these two questions, and shows the population estimates in each cell.

Note: The unweighted counts are reported in Appendix Table A.1.

The category of “Other” includes: homemaker, student, unemployed and seeking work, not in the workforce and non-response.

We have used these data to form a split between working and retired, as follows:

Working = Full-time or part-time or unemployed but seeking work. Technically the correct term is “participating”, although the more informal term of “working” will be used.

= 273,612 + 129,617 + (those recorded as not retired (20,546) or partly retired (19,273) from the “Other” category of work status who were unemployed but seeking work = 8,830)

= 412,059

Retired = Retired (no paid work) or those who recorded retired from the “Other” category of work status who were not unemployed but seeking work)

= 135,405 + (22,311 out of 23,291)

= 157,716

This leaves (609,720 – 412,059 – 157,716) = 39,945 people for whom we do not have information, other than they are not in the workforce. These people are dropped from the population considered in this paper, except for where needed to compare to other datasets (Section 9.7). However, the effect of their exclusion is explored in Section 9.2.

Having constructed the two groups, working and retired, it is instructive to compare some of their basic characteristics. Table 3-7 summarises the differences.[12] A higher proportion of retired people considered their health to be poor.

The overall labour force participation rates for males and females in the age range 55 to 70 years appear high, both by historical and international standards.[13] As shown in

Table 3-8, 76% of all males and 66% of all females in this age range are in either full-or part-time work. Remaining attached to the labour market is clearly an important aspect for those over 55 as they age. For males, almost one in four over 65 years old is in full-time work; one in four females over 65 is in either full-or part-time work. Females tend to have higher rates of part-time employment.

All respondents were asked whether or not they planned to continue some form of paid work after retirement. It is assumed that those currently working responded based on their intentions. However it is less obvious how those retired would have responded. On one hand their response could have been based on their intentions prior to retirement. Alternatively, their responses could reflect their current status. With this caveat in mind, the results are depicted in Figure 8.