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Introducing ethnic labour force statistics by age

This article introduces new labour market time-series data, which is broken down by ethnicity and 10-year age groups. This data has been added to the suite of labour market statistics for users to better understand ethnic differences in the Household Labour Force Survey (HLFS).

The article highlights the differences and similarities between New Zealand’s main ethnic populations for employment and unemployment. Individuals from each ethnicity have, on average, improving labour market outcomes as age increases. However, differences in ethnic employment and unemployment rates still remain at each age grouping. After adjusting for the age structure differences between some ethnic populations, the gap between ethnic unemployment rates is reduced.

What the Household Labour Force Survey measures

The HLFS measures the number of people employed, unemployed, and not in the labour force. This is the most comprehensive measure of people employed based on a representative sample of 15,000 households and about 30,000 individuals throughout New Zealand. The survey uses international best practice and accepted guidelines and definitions of employment and unemployment as set out by the International Labour Organization. The HLFS is the official measure of employment and unemployment in New Zealand.

Household Labour Force Survey – information releases 

Age structure comparisons of New Zealand’s main ethnic populations

New Zealand’s ethnic populations – most notably Māori, Pacific peoples, and Asian – have significantly different age structures to the European population. The median age of the 2013 projected total population for each ethnicity varies considerably; the European median age is 40 years, which is almost double the median age for both Māori (23 years) and Pacific peoples (22 years). The Asian median age is in between, at about 31 years.

Figure 1

Graph, New Zealand's ethnic working-age population structure, 2013 projections.

The European population is older – roughly 1 in 5 of the working-age population is 65 years or older (figure 1). This is far higher than for the Māori, Asian, and Pacific peoples populations, which have no more than 1 in 12 in this bracket.

Similarly, only 3 in 10 of the European working-age population are under 35 years old – a far smaller proportion than for the Māori, Asian, and Pacific peoples populations, which have half the population in this age range.

The differences in ethnic age structures are largely due to past and current patterns of fertility (births), mortality (deaths), migration and inter-ethnic mobility (people changing their ethnic identification over time).top

Ethnic employment and unemployment rate comparisons

What does the relationship between age and labour market outcomes look like, particularly between ethnicities? As individuals progress through their working life they are likely to encounter and take part in opportunities to increase their skills and experience, making them more attractive to employers. The older a person is, the more likely they are to have better work experience, knowledge, and training. The younger a person is, the more likely they are to be studying and raising children. An individual’s stage in life can have an influence on their labour market outcome.

This is reflected in the two figures below, where the trend common to each ethnicity is that of improving labour market outcomes as age increases. Generally, we see the employment rate increase and the unemployment rate decrease with age until individuals reach retirement age.

Figure 2

Graph, Employment rates, by ethnic group and age, year to June 2013 quarter.

Figure 3

Graph, Unemployment rates, by ethnic group and age, year to June 2013 quarter.

While ethnic employment and unemployment trends are similar, there are notable differences in the levels of ethnic employment and unemployment rates at each age grouping. This suggests that labour market outcomes for ethnic groups are varied when taking into account age differences. The two figures above show that Māori and Pacific peoples have, on average, a higher unemployment rate and lower employment rate than people from European and Asian ethnicities for most ages. These differences can be partly explained by factors such as educational attainment and location. Explaining these differences is not the focus of this article.top

How an ethnicity’s age structure influences labour market statistics

As an example, let’s turn our focus to the unemployment rate. In the year to the June 2013 quarter, the Household Labour Force Survey’s estimated unemployment rate for New Zealand was 6.7 percent. Breaking this down by ethnicity, unemployment rates were:

  • Europeans – 5.3 percent
  • Māori – 14.1 percent
  • Pacific peoples – 15.8 percent
  • Asian – 7.8 percent.

Both Māori and Pacific peoples have the largest proportion of their working-age population in youth (15–24 years). Youth face a challenging labour market with relatively higher unemployment rates compared with other ages (figure 3). Although there is a level difference between ethnicities that will result in a higher unemployment rate for Māori and Pacific peoples, the larger proportion of the working-age population in younger age brackets will result in a higher total unemployment rate when compared with Europeans. The opposite applies for Europeans – the large proportion of older people in the working-age population has a diminishing effect on the unemployment rate.

It is clear that not taking into account the age structure differences between ethnic populations widens the gap between key labour market statistics and depicts a more divided labour market.

Taking into account age structure differences

Age standardisation is a technique used to better present results after removing the effect of differing age structures. The standardised rates indicate the rate that would occur if each ethnic population had the same age distribution.

In the direct method of standardisation, age-specific rates are calculated for each period of time and standardised against a standard population. Here, we use the HLFS population for the December 2007 quarter, which is the first quarter that HLFS data for total response ethnic groups are available.

Figure 4

Graph, Unemployment rates, age standardised and original rates, by ethnic group, December 2007 quarter to June 2013 quarter.

As expected, ethnic populations have unemployment rates that are much closer after age standardisation, but significant differences remain, notably between European and Maori and Pacific peoples. Unemployment rates have risen for all ethnic groups between 2008 and 2013, but ethnic differences appear to have widened since the recession of 2008 and 2009.

Significant attention has been paid to the topic of New Zealand’s population structure and its implications for social and economic planning. There is a known relationship between age and employment and unemployment rates, and understanding this is critical to understanding labour market outcomes. We are introducing ethnicity by age time-series data to better highlight the differences between New Zealand’s ethnic populations and to allow users a more comprehensive way to explore our labour market statistics.top

More information

Total response ethnicity

From the December 2011 quarter, the HLFS publishes ethnicity data using the total response ethnicity. Using this method, people who report that they belong to 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.

New Zealand statistical standard for ethnicity (2005) has more information.

Infoshare

Infoshare allows you to organise data in the way that best meets your needs. The new ethnicity by age series is now available in Infoshare from the December 2007 quarter onwards, and will be updated quarterly. The Infoshare series include headline labour market variables by total response ethnicity and 10-year age groups.

Use Infoshare 
For the ethnicity by age time-series select the following categories from the Infoshare homepage:
Subject category: Work, income and spending
Group: Household Labour Force Survey – HLF
Table: Labour Force Status by Total Resp Ethnic Group and Age Group

For more information contact:

Auren Clarke
Wellington: 04 931 4600
Email: info@stats.govt.nz

Published 1 October 2013top

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