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Household Labour Force Survey resource

This page is a learning resource for the Household Labour Force Survey (HLFS). It outlines the purpose of the survey and its main uses, and provides a few practical exercises relating to the survey.

What is the HLFS?

The HLFS is a nationwide, quarterly survey and is the official measure of employment and unemployment in New Zealand. It has been providing the only comprehensive and ongoing picture of the labour force since it began in October 1985. The HLFS measures:

  • the number of employed and unemployed people
  • the number who are not in the labour force
  • hours worked
  • which occupations and industries people work in
  • duration of unemployment
  • steps people take to find work
  • steps people take to find more work hours
  • the number of people in formal study.

These measurements are then cross-tabulated by demographic characteristics, such as age group, gender, locality, and ethnicity.

How is the data collected?

HLFS data is collected from a sample survey, which is designed to represent the country as a whole. There are about 15,000 households in the sample, which corresponds to roughly 30,000 people, from both rural and urban localities. Households and household members are interviewed every three months and asked about their activities during a particular reference week. From the information provided, Statistics NZ can estimate the official unemployment rate and other labour market indicators.

How is the HLFS used?

Perhaps the most high-profile use of HLFS data is as an indicator of the overall health of the economy. Many take the unemployment rate as the key indicator. A warning though: labour markets take time to adjust, so when the economy is unhealthy it may take a while for that to be seen in the labour market (and vice versa). Typically, employment tends to increase two to three quarters after an upturn in the general economy. For this reason we say that the labour market is a ‘lagged’ indicator.

The HLFS is particularly good for making comparisons of labour force variables across demographic characteristics. For example, you can easily compare the unemployment rates for men and women, and for different ethnic groups. The data is also useful for identifying patterns over time for particular industries, regions, or groups of people. Some also use HLFS data to help model or predict the future direction of the labour market.

Read our Labour Market Statistics information release for quarterly data from the HLFS.

What are the common confusions?

A glossary is published in each quarterly release. However, the definitions of the different statistics can be confusing for the general public. People often equate the terms ‘unemployment rate’ and ‘jobless rate’ – when in fact these are two different things. Unemployed people are those in the working-age population who 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. The jobless are defined as people who are either unemployed, available but not seeking work, or actively seeking work but not available. The jobless rate is an alternative measure of unemployment, though it is not the official unemployment rate.

People sometimes confuse the labour force participation rate (LFPR) with the employment rate. The employment rate is the proportion of the working-age population who are employed, whereas the LFPR is the proportion of the working-age population who are either employed or unemployed.

Another common confusion is the relationship between employment and unemployment. For example, a decrease in employment does not necessarily equate to an increase in unemployment. There are three general labour force status classifications: employed, unemployed, and not in the labour force. Flows of people can occur between all three. A decrease in employment could result from workers retiring and exiting the labour force. This will result in an increase of people not in the labour force, with the number of unemployed people unchanged.

Dynamics of the New Zealand labour market has more information.

The unemployment rate published every three months in the Labour Market Statistics information release is the official unemployment rate for New Zealand. People can confuse this with the quarterly unemployment benefit statistics published by the Ministry of Social Development. There are people on the benefit who would not qualify as unemployed by the HLFS definition. Similarly, there are people who are unemployed in the HLFS definition who are not eligible for the unemployment benefit.

A guide to unemployment statistics has more information.

Practical exercises

Definitions

Percentages:  a way of expressing a number as a fraction of 100 (per cent literally means 'per hundred'). It is often identified by the symbol '%'. For example, 1% = 1/100 and 90% = 90/100.

Percentage points: the difference between two percentages or rates – one is subtracted from the other. We use percentage points to measure the differences in rates or percentages over time; for example, the quarterly change in the unemployment rate. This is different to percentage change, which is the change over time as a percentage of the original value.

Example

Percentages

There are two situations where you might use percentages:

1) If you want to calculate what number a given percentage of a larger number is:

Imagine the labour force is 800,000, and 4 percent are unemployed. How many people are unemployed?

    800,000 x 4/100
    800,000 x 0.04
    = 32,000

2) If you have two groups and want to calculate what percentage one is of the other:

65,000 of the 1,000,000 people in the labour force are unemployed. What percentage is this?

    65,000 / 1,000,000 x 100
    0.065 x 100
    = 6.5 percent

Percentage points

1) The unemployment rate in December 2007 was 3.4 percent. It increased to 4.6 percent in December 2008. What is the percentage point change over the period?

    4.6 – 3.4 = +1.2 percentage points

2) The labour force participation rate in the September 2008 quarter was 68.7 percent. By the December 2008 quarter it had risen by 0.6 percentage points. What was the labour force participation rate in the December quarter?

    68.7 + 0.6 = 69.3 percent

Activities

Calculating percentages and percentage points

Let’s calculate a couple of unemployment rates (percentages) and quarterly changes (percentage points).

The unemployment rate is the percentage of unemployed people in the labour force. Fill in the missing values in the table:

unemployment rate (%)  = 

 unemployed people
_______________

 x 100

labour force 

2020 quarter Unemployed people (000s) Labour force (000s) Unemployment rate (%) Quarterly change (percentage point change from previous quarter)
Mar 60 800 ...
Jun 65 1000
Sep 1000 6.6
Dec 46 4.0 -2.6
Symbol: ... not applicable

Further reading

This summary is largely based on information on the Statistics NZ website. For more information about the HLFS see:

Labour Market Statistics – information releases
Household Labour Force Survey – information releases

Answers

2020 quarter Unemployed people (000s) Labour force (000s) Unemployment rate (%) Quarterly change (percentage point change from previous quarter)
Mar 60 800 7.5 ...
Jun 65 1000 6.5 -1.0
Sep 66 1000 6.6 +0.1
Dec 46 1150 4.0 -2.6
Symbol: ... not applicable
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