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Household Labour Force Survey: March 2010 quarter
Embargoed until 10:45am  –  06 May 2010
Technical notes

Background to the survey

The Household Labour Force Survey (HLFS) commenced in October 1985, and the first results published were for the March 1986 quarter. The survey provides a regular, timely, and comprehensive portrayal of New Zealand's labour force. Each quarter, a range of statistics relating to employment, unemployment, and people not in the labour force is published.

In this release

This release contains seasonally adjusted, trend, and survey statistics for the March 2010 quarter. These statistics are averages for the three-month period and do not apply to any specific point in time. Data sourced from the seasonally adjusted series and trend series are identified as such in the table or section headings. All other data, whether in the commentary or in tables, are sourced from the original survey series and are unadjusted.

Figures presented in this release are rounded. Because each table contains rounded figures, there may be some small inconsistencies between the totals and individual cells. Unrounded figures have been used in the calculation of unemployment rates and labour force participation rates. Cells with estimates of less than 1,000 have been suppressed and appear as ‘S’ in the tables. These estimates are subject to sampling errors too great for most practical purposes.

Seasonal adjustment

Seasonal adjustment aims to eliminate the impact of regular seasonal events on a time series. In the case of the labour market, there are cyclical events that occur at around the same time each year that affect labour supply and demand. For example, in summertime there is a large pool of student labour that is both available for, and actively seeking, work. There is also increased demand for labour in the retail sector and in many primary production industries.

Seasonal adjustment makes data for adjacent quarters more comparable by smoothing out the effect on the times series of any regular seasonal events. This ensures that the underlying movements in the time series are more visible. Each quarter, the seasonal adjustment process is applied to the latest and all previous quarters. This means that seasonally adjusted estimates for any of the previously published quarters may change slightly.

Each series is adjusted separately. For this reason, the sum of the seasonally adjusted estimates for employment, unemployment, and people not in the labour force will usually not add up to the working-age population estimates.

All seasonally adjusted and trend series are produced using the X-12-ARIMA Version 0.2.10 package developed by the U.S. Census Bureau.

Trend series

For any series, the survey estimate can be broken down into three components: trend, seasonal and irregular. Trend series have had both the seasonal and irregular components removed, and reveal the underlying direction of movement in a series. Revisions to the trend series can be particularly large, especially if any estimates were considered to be outliers, but turn out to be part of the underlying trend. Typically, only the last two or three estimates will be subject to substantial revisions.

Survey scope

The target population for the HLFS is the civilian, usually resident, non-institutionalised population aged 15 years and over. This means that the statistics in this release do not cover long-term residents of homes for older people; hospitals and psychiatric institutions; inmates of penal institutions; members of the permanent armed forces; members of the non-New Zealand armed forces; overseas diplomats; overseas visitors who expect to be resident in New Zealand for less than 12 months; and those aged under 15 years

Reliability of survey estimates

The HLFS sample contains about 15,000 private households and about 30,000 individuals each quarter. Households are sampled on a statistically representative basis from rural and urban areas throughout New Zealand, and information is obtained for each member of the household.

Each quarter, one-eighth of the households in the sample are rotated out and replaced by a new set of households. Therefore, the overlap between two adjacent quarters can be as high as seven-eighths. This overlap improves the reliability of quarterly estimates of change.

Two types of error are possible in estimates based on a sample survey: sampling error and non-sampling error.

Sampling error can be measured, and quantifies the variability that occurs by chance because a sample rather than an entire population is surveyed. A non-sampling error is very difficult to measure, and if present can lead to biased estimates. Statistics New Zealand endeavours to minimise the impact of these errors through the application of best survey practices and monitoring of known indicators (eg non-response).

Sampling errors are calculated for each cell in the published tables and for estimates of change between adjacent quarters. For example, the estimated total number of people employed in the March 2010 quarter is 2,170,600 before seasonal adjustment. This estimate is subject to a sampling error of plus or minus 21,700, or 1.0 percent (measured at the 95 percent confidence level). This means that there is a 95 percent chance that the true number of employed people lies between 2,148,900 and 2,192,300.

Smaller estimates, such as the number of people unemployed, are subject to larger relative sampling errors than larger estimates. For example, the estimated total number of people unemployed in the March 2010 quarter is 153,500 before seasonal adjustment. This estimate is subject to a sampling error of plus or minus 9,500 or 6.2 percent (measured at the 95 percent confidence level). This means that there is a 95 percent chance that the true number of unemployed people lies between 144,000 and 163,000.

Estimates of change are also subject to sampling error. For example, the survey estimate of change in total employment from the December 2009 quarter to the March 2010 quarter is a decrease of 4,300. This estimate is subject to a sampling error of plus or minus 18,600 (at the 95 percent confidence level). Therefore, the true value of the change in surveyed employment from the December 2009 quarter to the March 2010 quarter has a 95 percent chance of lying between -14,300 and 22,900.

A change in an estimate, either from one adjacent quarter to the next, or between quarters a year apart, is said to be statistically significant if it is larger than the associated sampling error. Therefore, the example quoted above does not represent a significant movement.

In general, the sampling errors associated with subnational estimates (eg breakdowns by regional council area or ethnic group) are larger than those associated with national estimates.

Response rates

The target response rate for the HLFS is 90 percent. The response rate is calculated by determining the number of eligible households who responded to the survey, as a proportion of the estimated number of total eligible households in the sample. The following table shows the HLFS response rates for the last five quarters. 

HLFS Response Rates
Quarter Response rate (%)
Mar 2009 89.2
Jun 2009 85.4
Sep 2009 87.9
Dec 2009 86.4
Mar 2010 88.3


Definitions of labour force category

The labour force category to which a person is assigned depends on their actual activity during a survey reference week. The following definitions, which conform closely to the international standard definitions specified by the International Labour Organization, are used for the HLFS:

Working-age population: The usually resident, non-institutionalised, civilian population of New Zealand aged 15 years and over.

Labour force: Members of the working-age population who during their survey reference week were classified as 'employed' or 'unemployed'.

Employed: All persons in the working-age population who during the reference week worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment; or worked without pay for one hour or more in work which contributed directly to the operation of a farm, business or professional practice owned or operated by a relative; or had a job but were not at work due to: own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday. 

Unemployed: All persons in the working-age population who during the reference week were without a paid job, available for work and had either actively sought work in the past four weeks ending with the reference week, or had a new job to start within the next four weeks.

Not in the labour force: Any person in the working-age population who is neither employed nor unemployed. For example, this residual category includes persons who:

  • are retired
  • have personal or family responsibilities such as unpaid housework and childcare
  • attend educational institutions
  • are permanently unable to work due to physical or mental disabilities
  • were temporarily unavailable for work in the survey reference week
  • are not actively seeking work.

Unemployment rate: The number of unemployed persons expressed as a percentage of the labour force. 

Labour force participation rate: The total labour force expressed as a percentage of the working-age population.

This definition of labour force participation includes all those aged 15 years and over in the numerator (the total labour force) and the denominator (the working-age population). This definition is the most appropriate for the New Zealand labour market, as New Zealand does not have a compulsory retirement age, and many workers stay in the labour force beyond the age of 65. Using this definition also means that the measure will reflect changes in labour market demographics, in particular the increasing number of employees working beyond 65 years.

Several alternative definitions of labour force participation rate are in use by other organisations; they differ in regard to age of the working-age population and the inclusion of military personnel. A common definition is to restrict the labour force and working-age population to the 15- to 64-year age group, particularly in countries with a compulsory retirement age. Generally, this definition leads to a higher figure. Using this definition for the New Zealand HLFS in the March 2010 quarter gives a surveyed figure of 77.7 percent.

Industry statistics

Since the September 2009 quarter, the industry statistics are based on ANZSIC 2006 (ANZSIC06), the latest edition of the Australian and New Zealand Standard Industrial Classification. The 1996 version of ANZSIC (ANZSIC96), used in industry outputs in previous releases, has been updated to the 2006 edition. Note that industry outputs defined using ANZSIC06 are not comparable with those based on ANZSIC96.

The release of ANZSIC06 followed a review that involved consultation with government agencies responsible for policy formulation and administration, non-government analysts of industry structure and performance, and industry experts. The changes to ANZSIC ensure the classification is current and relevant, reflecting changes in the structure and composition of industry since the previous edition, and recognises changing user requirements for industry data.

In the HLFS, data has been collected using both ANZSIC06 and ANZSIC96 from the March 2009 quarter, and will continue to be collected using both classifications until December 2011. A back-cast series for ‘total people employed by industry and sex’ has been created for ANZSIC06. The series has been created at the 1-digit divisional level and has been back-cast from the December 2008 quarter to the March 2003 quarter.

With the introduction of ANZSIC06, Statistics New Zealand also developed the New Zealand Standard Industrial Output Categories (NZSIOC) which will assist in the standardisation of outputs. HLFS industry statistics are published at NZSIOC level one. Under NZSIOC level one, industries are published at the 1-digit divisional level, apart from three categories which are combined ANZSIC06 divisions. The category titled ‘retail trade and accommodation’ is the combined ‘retail trade’ and ‘accommodation and food services’ divisions. The ‘professional, scientific, technical, administrative, and support services’ category is the combined ‘professional, scientific, and technical services’ division and the ‘administrative and support services’ division. The ‘arts and recreation services’ division has been combined with the ‘other services’ division to form the ‘arts, recreation, and other services’ category.

More information can be found at Implementing ANZSIC06 in the Household Labour Force Survey

Occupation statistics

Since September 2009 quarter, ANZSCO is the basis of occupation data in the HLFS. ANZSCO is a harmonised classification which has been developed by Statistics New Zealand, the Australian Bureau of Statistics, and the Australian Department of Employment and Workplace Relations, for use in both Australia and New Zealand. Occupation data was previously based on the New Zealand Standard Classification of Occupations 1999 (NZSCO99). The occupation data is available on Infoshare.

Occupation data has also been collected using both NZSCO99 and ANZSCO from the March 2009 quarter, and will continue to be collected using both classifications until December 2011. A back-cast series for ‘total people employed by occupation and sex’ has been created for ANZSCO. The series has been created at the 1-digit divisional level and has been back-cast from the December 2008 quarter to the March 2003 quarter.

More information can be found at Implementing ANZSCO in the Household Labour Force Survey.

Formal study statistics

To be participating in formal study, an individual must be working towards a qualification that takes three or more months of full-time study to complete. Full-time study is defined as 20 or more hours per week.

Māori benchmarks

Prior to April 2009, the Māori working-age population was not benchmarked to population estimates. This, along with other sample design restrictions, caused a high degree of volatility in Māori statistics of the HLFS. Movements in the working-age population estimates of certain ethnic groups such as Māori may reflect this volatility, rather than a real change in the estimated ethnic demographic.

Including Māori benchmarks in the working-age population mitigates the known undercount of Māori in the HLFS and also results in smoother time series for Māori. However, introducing the Māori population benchmarks does not necessarily translate to improved estimates for non-Māori ethnic groups.

Ethnic statistics

In the September 2008 quarter, the HLFS started publishing ethnicity data using the single/combination output method. This created a complete break in the ethnicity series, as the prioritisation of ethnic groups was no longer produced. Using the single/combination ethnicity output, people are counted just once according to the ethnic group or combination of ethnic groups they have reported. This means that the total number of responses equals the total number of people who stated an ethnicity.

In the December 2007 quarter, the HLFS began collecting ethnicity data using the 2005 New Zealand standard classification of ethnicity. The new single/combination ethnicity tables contain five quarters worth of data using the 2005 classification. The 2005 classification of ethnicity enables the HLFS to collect and output more detailed ethnicity data, especially for the Asian ethnic group, which was not previously collected.

Using the total response ethnicity output, people who reported more than one ethnic group are counted once in each group reported. This means that the total number of responses for all ethnic groups can be greater than the total number of people who stated their ethnicities. The table below shows total response for the December 2009 and March 2010 quarters of the Household Labour Force Survey.

Total Response HLFS Ethnicity Data for Working-age Population(1)
Ethnic group December 2009 quarter March 2010 quarter
European 2,553,100 2,550,900
Māori 426,500 428,300
Pacific peoples 190,100 199,200
Asian 365,300 362,700
MELAA(2) 28,700 31,700
Other 57,400 64,700

(1) The sum of ethnic groups will not add up to the total working-age population as the total response method of grouping ethnicity data counts each response given by an individual.
(2) MELAA = Middle Eastern/Latin American/African.

 

To read about the 2005 New Zealand standard classification of ethnicity please go to the Statistics NZ website, www.stats.govt.nz

Household statistics

A household's labour force status is derived by looking at the labour force status of members in the household aged between 18 and 64 years. For example, if a couple is living by themselves and one is aged 64 and the other is aged 65, this couple will be assigned to the 'All employed' or 'None employed' category, depending on the labour force status of the 64-year-old. Households that have no members between the ages of 18 and 64 years have been excluded from this analysis.

The household categories incorporate the concept of dependent children rather than just children. A child is a person of any age who usually resides with at least one parent (natural, step, adopted, or foster) and who does not usually reside with a partner or child(ren) of his or her own. Statistics NZ defines a dependent child as a child aged under 18 years and not in full-time employment.

More information

For more information, follow the link from the technical notes of this release on the Statistics NZ website.

Copyright

Information obtained from Statistics NZ may be freely used, reproduced, or quoted unless otherwise specified. In all cases Statistics NZ must be acknowledged as the source.

Liability

While care has been used in processing, analysing and extracting information, Statistics NZ gives no warranty that the information supplied is free from error. Statistics NZ shall not be liable for any loss suffered through the use, directly or indirectly, of any information, product or service.

Timing

Timed statistical releases are delivered using postal and electronic services provided by third parties. Delivery of these releases may be delayed by circumstances outside the control of Statistics NZ. Statistics NZ accepts no responsibility for any such delays.

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