4  Measurement and methods

4.1  Measurement of labour market activity

Labour market activity at the household interview date is used for this analysis. Two breakdowns of labour market activity are used: labour market participationand labour market outcome.

The main focus of the report will be on labour market participation; that is:

• participating (working full-time or part-time (including unpaid work) or being unemployed (that is not working but actively looking for work))
• not participating (that is, not working and not looking for work so that the person is economically inactive).[3]

Labour market outcome is also briefly considered; that is:

• full-time paid or unpaid work (30 hours or more on average in a week)
• part-time paid or unpaid work (less than 30 hours on average in a week)
• unemployed
• inactive.

4.2  Measurement of health

In Wave 3 of the survey respondents were asked a detailed set of health questions. Hence a respondent's health status could be linked to their current and previous labour market outcomes to see what relationships could be established. Two measures of health are available in all three waves of the survey: the presence of chronic diseases (derived from Wave 3 responses); and self-rated health. Neither provide perfect measures of ill health (the sub-sections below provide further discussion of the problems with each health measure). In a review of the literature, Currie and Madrian (1999) concluded that the effects of health on labour supply are sensitive to the way health is measured, so a range of health measures need to be considered to properly understand the impact of health on labour market status. For these reasons this paper summarises and compares results using each of the available health measures in turn.

4.2.1  Chronic diseases

The health module asked respondents if, before the interview date, they have ever been told by a doctor that they have any of the following eight health conditions:

• asthma
• high blood pressure
• high cholesterol
• heart disease
• diabetes (other than during pregnancy for women)
• stroke
• migraines
• psychiatric conditions (depression, manic depression or schizophrenia).

The inclusion of these eight health conditions on the survey defined the conditions to be considered in this report (with the addition of cancer). They are loosely termed “chronic diseases”, a term that has been used by others to refer to similar groups of diseases (DeVol and Bedroussian, 2007). Chronic diseases represent a diverse mix of health conditions. For example, the characteristics of migraines, which are a series of often infrequent brief, acute episodes separated by long periods with no functional loss, are very different from those of cancer. And even cancer covers a large mix of disease characteristics. Some chronic conditions, such as high blood pressure and high cholesterol, are in fact risk factors for diseases. This should be borne in mind when interpreting the results.

As well as the detailed information on each individual disease, a summary variable that indicates the presence of one or more chronic diseases is also used. For people who reported having a particular disease, the age at diagnosis was asked for diseases other than psychiatric conditions. This age of diagnosis was used to estimate the number of years since a disease was diagnosed. The presence of chronic diseases is only asked in Wave 3. For all diseases other than psychiatric conditions, the derived number of years since diagnosis was used to measure its presence in Waves 1 and 2. Diagnosis of mental illnesses (other than depression) almost always have onset in childhood and adolescence. After analysis of the group who had this disease in Wave 3, all these respondents were assumed to have had the disease in Waves 1 and 2. While this may not be the case for all respondents, the assumption is likely to hold for the majority.

The number of years since diagnosis was also used in combination with the presence of chronic disease information to break those with a disease into two groups. Using asthma as an example, this resulted in a variable with the following categories:

• No diagnosis of asthma
• Asthma diagnosed in the last 5 years
• Asthma diagnosed more than 5 years ago.

While the age of diagnosis variable is useful for estimating the time since the onset of each health condition there are likely to be issues with respondents being able to accurately recall this information, especially if this was some years in the past. This should be borne in mind when assessing the results. This is one of the reasons that the time since diagnosis variables were not disaggregated further.

An additional disease of interest not covered in the SoFIE questionnaire is cancer. SoFIE respondents were asked to give permission for their data to be linked to information on cancer registrations held by the New Zealand Health Information Service. For those respondents who agreed to the data linkage (and were successfully matched), it was possible to construct the same presence and years since diagnosis variables in each wave as for the other chronic diseases covered by SoFIE. These variables will only be available for those in the linked data and are only available back to 1990 so the proportion of the population who have had a cancer diagnosis will be an underestimate. The linked sample is used for descriptive statistics that relate to cancer only.[4] In the models a “cancer unknown” category was included so the sample size available for analysis was not reduced.

Finally, using diagnosis of a chronic disease is an incomplete indicator of health status, which does not capture the relative severity of respondents' conditions. At best, this indicator focuses on a particular set of chronic diseases, and is not an encompassing measure of current health. SoFIE respondents are asked if they have ever been told by a doctor that they had the disease (or if they have ever had a cancer registration). A person may have had a disease diagnosis but no longer suffer symptoms. An example would be asthma or migraines, from which respondents may have suffered in their youth, but be symptom free by adulthood. On the other hand, a person may have the disease but not have been diagnosed by a doctor. Hence, this indicator of the disease diagnosis gives no indication of severity, and may not capture all those with a disease. An indication of the severity of such diseases, in terms of the functional losses or activity limitations, would allow better analysis of the relationship between health and labour market participation.

4.2.2  Self-rated health

An alternative health measure available in all three waves is self-rated health. Respondents are asked “In general how would you rate your health - excellent, very good, good, fair or poor?” Self-rated health is potentially a more encompassing measure of current health state than presence of chronic diseases as it can include other illnesses as well as chronic diseases and is collected for all respondents. As a result of this wider coverage, there is potential for more changes in health to be observed during the survey period. While this may be a more current and inclusive measure of health, allowing for the fact that a respondent may no longer suffer from symptoms of a chronic disease and including other health factors such as injury and illness, it is more subjective and, as such, may be subject to potential bias.

Firstly, self-rated health may not be entirely comparable between respondents. Some respondents may be consistently more optimistic in their health rating and others consistently more pessimistic. Secondly, with only three waves of data, most respondents are unlikely to experience many dramatic health status changes over this short period; and reported changes may not be true changes (Mathiowetz and Laird, 1994 in Bound at al, 1999). In addition, the subjective health baseline respondents use as a comparator when answering this question is ill-defined and may change over time. For example, the SoFIE question on self-rated health does not ask respondents to rate their health relative to health of other people of the same age. Some respondents may compare their health to that of others, but others may compare their current health to their past health.[5] Given that there are only three waves of data, and that this report focuses on those of working age, this ageing effect appears to be small and is therefore not considered further in this work. Finally, even for the same person, self-rated health may be dependent on labour market status. This is considered in detail later in this paper.