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National labour force projections

For more detailed projections see:

National labour force projections give an indication of the future supply of people who are usually living in New Zealand and are available for work. The labour force projections are derived from the latest National population projections: 2014(base)–2068 by multiplying the projected population by the assumed labour force participation rates (LFPRs), by single year of age and sex.

These projections have the estimated resident population of New Zealand in the labour force at 30 June 2015 as a base. The labour force comprises people aged 15+ who regularly work for one or more hours per week for financial gain, or work without pay in a family business, or are unemployed and actively seeking part-time or full-time work. The LFPR is defined as the proportion of the population in the labour force.

Total labour force

The total labour force is projected to rise from an estimated 2.5 million people at 30 June 2015 to 2.9 million in 2038 and 3.2 million in 2068 under the median projection. There is uncertainty, however, in both the future population (size and structure) and future labour force participation rates. It is highly likely that the labour force will be in the range of 2.7–3.2 million in 2038, and 2.7–3.8 million in 2068.

Labour force by sex

The male labour force will grow from 1.3 million in 2015 to 1.4–1.7 million in 2038 and 1.5–2.1 million in 2068. The female labour force will grow from 1.2 million in 2015 to 1.3–1.5 million in 2038 and 1.2–1.7 million in 2068.

Labour force age structure

The labour force is projected to continue ageing. The median age of New Zealand's labour force increased from 35 years in the late 1980s to nearly 43 years in 2015. Half the labour force could be older than 45 years by the latest 2050s.

The labour force aged under 25 is projected to remain under 400,000 between 2015 and 2068 under the median projection. Because of growth in the older segment of the labour force, the proportion of the labour force aged under 25 is likely to decrease. From about 1 in 4 of the labour force during the late 1980s, young workers will account for about 1 in 7 of the labour force in 2021, and 1 in 8 by the 2050s.

Labour force aged 25–64

The labour force aged 25–64 totalled 1.9 million in 2015, and is projected to increase steadily to 2.2 million in the mid-2030s and 2.4 million in the 2050s (median projection). This broad age group made up 78 percent of the total labour force in 2015, but its share is projected to decrease to 76 percent in the early 2030s and 75 percent in the 2060s.

A comparison of labour force numbers in age groups 25–44 and 45–64 shows how New Zealand's age structure has changed. In the late 1980s, the labour force aged 25–44 (820,000) was double the labour force aged 45–64 (410,000). Between then and 2015, the labour force aged 25–44 increased by 20 percent to 980,000, while the labour force aged 45–64 increased by 130 percent to 960,000. The labour force numbers in these two broad age groups will vary as different-sized birth cohorts move through the age structure, but the size of the two groups will remain within 200,000 of each other.

Labour force aged 65+

The number of people aged 65+ in the labour force climbed from 25,000 in the late 1980s to an estimated 150,000 or more in 2015. Further increases in labour force participation, coupled with more people at older ages, is likely to grow the older segment of the labour force further. It is highly likely that there will be 240,000–400,000 people aged 65+ in 2038, and 260,000–550,000 in 2068. The largest growth will occur between now and the early 2030s, as the bulk of the baby boomers move into the 65+ age group.

Among those aged 65+, barely 6 percent were in the labour force in 1991. Labour force participation among those aged 65+ (see Labour Market Statistics – information releases) is now about 22 percent – about 28 percent among men and 17 percent among women – and is projected to increase to perhaps 27 percent overall by the late 2020s. Beyond the 2020s, even greater numbers of people aged 80+ are likely to push the overall 65+ participation rate downwards.

As a result, by 2038, it is expected that between 9 and 13 percent of the labour force will be aged 65+, compared with 6 percent in 2015. By 2068, between 9 and 16 percent of the labour force will be aged 65+.

Labour force aged 80+

The number of people aged 80+ will increase significantly. From roughly 7,000 in 2015, it is highly likely there will be 17,000–40,000 people aged 80+ in the labour force in 2038, and 18,000–68,000 in 2068.

Among those aged 80+, about 1 percent were in the labour force in 1991. It is now 4 percent, and is projected to increase to over 6 percent by the late 2020s.

Labour force participation

The projections indicate that New Zealand is currently near peak labour force participation, and this is likely to fall over the coming decades. In recent years, 68–69 percent of adults (aged 15+) were in the labour force. The median projection indicates a gradual drop to 64 percent in 2038 and to 62 percent in 2068. This drop is despite the assumptions of static or increasing labour force participation rates (LFPRs) at most ages. This apparent contradiction is caused by the changing age structure of the population, which sees a growing number and proportion of the population at the oldest ages where LFPRs are at their lowest.

Working hours

The average number of hours that people in the labour force are working (or available for work) has dropped slightly from about 39 per week in the late 1980s to 37 per week in 2015. The projections indicate this average is likely to remain around that level, assuming current age-specific trends continue.

Page updated 19 February 2016

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