Employment

Relevance

The employment rate is the best available indicator of the prevalence of paid employment. Like the unemployment rate, it is affected by a number of factors, including economic conditions and the availability of work, migration flows, skill levels, family responsibilities and personal decisions.

Current level and trends

In the year ended December 2009, 72.9 percent of 15–64 year olds (2.082 million people) were employed. This was a decrease from 74.7 percent in the year ended December 2008 and the record high of 75.2 percent in the year ended December 2007. The decline reflects the lagged impact of the economic recession in New Zealand between March 2008 and March 2009.

The employment rate fell from 72.2 percent in 1986 to a low of 64.9 in 1992 but has generally risen since, except during the economic downturn of 1997/1998 and the most recent recession.

The full-time employment rate for 15–64 year olds declined sharply between 1986 (60.3 percent) and 1992 (51.2 percent), and had almost recovered to the mid-1980s level by 2006 (59.3 percent) before declining in subsequent years (56.8 percent in 2009). The part-time employment rate increased from 11.9 percent in 1986 to 16.3 percent in 2007, and was 16.0 percent in 2009. Although the part-time employment rate has almost doubled for men since 1986, women continue to have a higher part-time employment rate than men (23.1 percent and 8.7 percent, respectively, in 2009).

Figure PW2.1 Employment rate, 1986–2009

Source: Statistics New Zealand, Household Labour Force Survey
Notes: (1) Average for December years. (2) Based on the population aged 15–64 years.

Age and sex differences

People aged 25–54 years have the highest employment rates and these changed little over the period 2007 to 2009. In contrast, the employment rate of young people aged 15–24 years fell by nearly 7 percentage points (from 58.2 percent in 2007 to 51.6 percent in 2009). Youth employment rates also fell by more than those of other age groups in the two previous economic downturns of 1987–1992 and 1997/1998. Employment rates for people aged 55–64 years have grown strongly since 1992, driven mainly by the phasing in of a higher age of eligibility for New Zealand Superannuation, rising employment among women, and an increase in the demand for labour.

Women are less likely than men to be employed. This is mainly because women spend more time on childcare and other unpaid household work, and are more likely than men to undertake some form of study or training. However, the sex difference in the employment rate more than halved between 1986 and 2009, from 24 percentage points to 11 percentage points. This is the result of female employment rates falling less than those of males during the economic downturns of the past 25 years, and increasing more than those of males between 1992 and 2007. Among youth aged 15–24 years, females (49.2 percent) were less likely than males (53.9 percent) to be employed in 2009.

Table PW2.1 Employment rate (%), by age group and sex, selected years, 1986–2009

Source: Statistics New Zealand, Household Labour Force Survey
Note: Average for December years.

Ethnic differences

Māori and Pacific peoples had the lowest employment rates in 1992 but their rates showed the strongest recovery as economic conditions improved. The Māori employment rate peaked at 65.7 percent in the year to December 2008, then fell back to 61.7 percent in 2009, the same rate as in 2003 and 2004. The Pacific employment rate reached 62.7 in 2008, then fell to 56.8 in 2009, the lowest rate since 1999.

After declining slightly between 1996 and 1998, the European employment rate reached a record high of 79.3 percent in the year to December 2007, then fell to 78.4 percent in 2008 and to 77.0 percent in 2009. The combined Asian, Middle Eastern/Latin American/African (MELAA), Other (including “New Zealander”) ethnic group category had the lowest employment rate in the economic downturn of 1998 (50.5 percent). By 2007, the rate for this combined group had increased to 64.7 percent and was at the same level in 2009.

In 2009, among youth aged 15–24 years, employment rates varied from 57.1 percent for European youth, 42.3 percent for Māori youth, 37.4 percent for Pacific youth and 43.6 percent for youth of the combined Asian/MELAA/Other ethnic group category.

Figure PW2.2 Employment rate, by ethnic group, 1992–2009

Source: Statistics New Zealand, Household Labour Force Survey
Notes: (1) Average for December years. (2) Based on the population aged 15–64 years. (3) People who reported more than one ethnic group are counted once in each group reported. (4) MELAA stands for Middle Eastern, Latin American, African. (5) From the December 2007 quarter, people responding “New Zealander” are included in the Other ethnic group. Before that quarter, they were included in European.

International comparison

In the year to December 2009, New Zealand was ranked sixth highest of 30 OECD countries with an employment rate of 72.9 percent for people aged 15–64 years. This was well above the OECD median of 67.0 percent. Switzerland had the highest employment rate in 2009 (79.2 percent). The New Zealand rate in 2009 was higher than those of Australia (72.0 percent), Canada (71.5 percent), the United Kingdom (70.6 percent), the United States (67.6 percent) and Ireland (62.5 percent). In 2009, New Zealand had a higher male and female employment rate than Australia, the United Kingdom, the United States and Ireland but had a lower female employment rate than Canada.⁶¹

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