A guide to unemployment statistics
Second edition
Acknowledgement
Statistics New Zealand would like to thank the Ministry of Social Development and the
Ministry of Business, Innovation and Employment for all their input into this guide.
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Citation
Statistics New Zealand (2014). A guide to unemployment statistics (second edition).
Available from www.stats.govt.nz.
ISBN 978-0-478-42912-1 (online)
First edition published May 2010.
Published in July 2014 by
Statistics New Zealand
Tatauranga Aotearoa
Wellington, New Zealand
Contact
Statistics New Zealand Information Centre: [email protected]
Phone toll-free 0508 525 525
Phone international +64 4 931 4610
[email protected]
www.stats.govt.nz
Contents
List of tables and figures ................................................................................................... 4
Purpose and summary ....................................................................................................... 5
Purpose............................................................................................................................ 5
Summary.......................................................................................................................... 5
1 Introducing measures of unemployment .................................................................... 6
Household Labour Force Survey ..................................................................................... 6
Jobseeker support – work ready ..................................................................................... 7
Job seekers register ........................................................................................................ 8
2 Differences between measures .................................................................................. 10
Timing differences ......................................................................................................... 10
Definitional differences .................................................................................................. 10
Quality differences ......................................................................................................... 12
3 Choosing between measures ..................................................................................... 14
Conclusion ........................................................................................................................ 16
Further reading ................................................................................................................. 17
3
List of tables and figures
List of tables
1. Measures of unemployment, by various definitional characteristics ......................... 12
2. Breakdown of information available from each measure, by topic ........................... 15
List of figures
1. Pre-July 2013 benefit categories and post-July 2013 benefit categories ................... 7
2. Pre-July 2013 benefit categories and jobseeker support ............................................ 8
3. HLFS unemployment and jobseeker support – work ready recipients ..................... 10
4. Unemployment over time, by unemployment measure, quarterly ............................ 11
4
Purpose and summary
Purpose
A guide to unemployment statistics provides guidance to data users on the different
features of four unemployment measures. It is intended to aid users in choosing the
correct unemployment measure to suit their needs.
Summary
This guide explores four measures of unemployment in New Zealand: persons
unemployed and jobless from the Household Labour Force Survey (HLFS); and
jobseeker support – work ready and the job seekers register from the Ministry of
Social Development. Each of these indicators has a different purpose, as well as different
definitions, timings, and qualities.
This guide gives an overview of each indicator, what they measure, how they differ from
each other, and how they can best be used. The HLFS unemployment measure is best
used when an official measure of unemployment in New Zealand is required. The three
other measures are more useful when looking at specific aspects of unemployment.
5
1 Introducing measures of unemployment
Many labour market indicators can provide an understanding of unemployment in New
Zealand. This guide explores four measures produced by Statistics New Zealand and the
Ministry of Social Development (MSD).
Statistics NZ’s Household Labour Force Survey provides the official unemployment
measure for New Zealand. The HLFS jobless series measures a wider group of people to
take account of those who do not fit the specific criteria required to be counted as
unemployed.
Occasionally, commentators suggest looking at alternative indicators of the health of the
labour market, such as benefit data and the job seekers register, both produced by MSD.
Jobseeker support – work ready numbers are currently most comparable to HLFS
unemployment. The job seekers register was historically used as a measure of
unemployment before the introduction of the HLFS, but has limited uses as a current
labour market indicator.
Each of the four measures of unemployment has a different purpose and definition.
Household Labour Force Survey
HLFS statistics provide an understanding of labour market trends across time. Before
1985, the only quarterly measure of unemployment in New Zealand was derived from the
register of unemployment, which was maintained by the Department of Labour. However,
this measure had various shortcomings, which led to the development of the HLFS.
The HLFS, a sample survey, was specifically designed to provide a more consistent and
accurate measurement of employment and unemployment trends in the labour market.
Additionally, the use of the International Labour Organisation (ILO) standards ensured
international comparability.
Unemployed
The HLFS Persons unemployed in the labour force series (referred to in this article as
HLFS unemployment) is the official measure of unemployment in New Zealand.
To count as unemployed in the HLFS, a person must be:
• part of the working-age population: the usually resident, non-institutionalised,
civilian population of New Zealand aged 15 years and over
• without a paid job
• both actively seeking and available for paid work, or have a new job to start within
the next four weeks.
Jobless
The HLFS also produces a broader series called the jobless to account for people who
aren’t in work, but do not meet the specific criteria to be counted as unemployed in the
HLFS. This series incorporates the HLFS unemployed, as well as those who are
available for, but not actively seeking work and those who are actively seeking, but not
available for work.
The ‘available but not seeking work’ category can be further broken down into the
‘discouraged’, ‘seeking through newspaper only’, and ‘others available but not actively
seeking work’. The latter may include students, or parents with young children.
6
A guide to unemployment statistics
Jobseeker support – work ready
Unemployment benefit numbers, produced by MSD, were previously used as a measure
of unemployment. However, these numbers are no longer produced following major
changes to benefit categories.
In July 2013, the unemployment benefit was transferred to the newly created jobseeker
support. Jobseeker support – work ready is a subset of the jobseeker support benefit,
and is most appropriate as a measure of people actively seeking full-time work who are
unable to support themselves financially.
Moving from unemployment benefit to jobseeker support
The July 2013 Welfare Reform led to major changes to benefit categories. The majority of
previous benefits were consolidated into three main benefit categories with differing work
obligations: Jobseeker support, sole parent support, and supported living payment. The
unemployment benefit was transferred to jobseeker support (see figure 1). As a result,
MSD unemployment figures are not directly comparable pre- and post-July 2013.
Figure 1
Pre-July 2013 benefit categories (left) and post-July 2013 benefit categories (right)
1. Pre-J ul y 2013 benefit categori es and post-J ul y 2013 benefit c ategories
7
A guide to unemployment statistics
Jobseeker support is designed to provide short-term financial assistance to people who
are looking for work, training for work, or temporarily unable to work due to a health
condition or disability. An individual’s eligibility for jobseeker support is affected by their
eligibility for other benefits, and the economic activity of other household members. For
example, those with a long-term health or disability could be eligible for the supported
living payment, whereas sole parents caring for children under the age of 14 could be
eligible for sole parent support. Additionally, those living with partners who earn above a
specified income could be ineligible, whether or not they are seeking work.
Features of jobseeker support – work ready
Jobseeker support can be further broken down into two categories: those who are work
ready, and those with a health condition or disability. Jobseeker support – work ready
includes those previously on the unemployment benefit, as well as some of those from
the domestic purposes and widow’s benefits. Jobseeker support – work ready recipients
are expected to seek full-time employment. Those who were receiving the sickness
benefit were transferred to jobseeker support – health condition or disability, and are
required to seek suitable work according to their ability.
Figure 2
Pre-July 2013 benefit categories (top) and jobseeker support (bottom)
2. Pre-J ul y 2013 benefit categori es and j obseeker s uppor t
Jobseeker support – work ready is most comparable to the previous unemployment
benefit and HLFS unemployment; however, it is important to note that it includes some of
those who were previously receiving other benefit types, and that as a result the number
of recipients is higher than the number previously on the unemployment benefit.
Job seekers register
MSD currently maintains the register of unemployment – formerly the official measure of
unemployment – as the job seekers register. Statistics NZ releases these numbers on a
quarterly basis.
To register as a job seeker, a person must be:
• working fewer than 30 hours per week
• seeking to work more hours
• available for and actively seeking work.
8
A guide to unemployment statistics
Reasons for registering as a job seeker include:
• as a requirement for a job seeker or their partner to receive a work-tested benefit
• to obtain assistance with finding work.
The job seekers register is no longer used for reporting on unemployment, as policy
changes over the last 10 years have meant the numbers are not comparable over time.
9
2 Differences between measures
Timing differences
The HLFS unemployment and jobless statistics are quarterly averages, whereas
jobseeker support – work ready recipient figures are counts of people receiving this
assistance at the end of the month. This timing difference is particularly important when
there are substantial seasonal rises in unemployment, for example towards the end of
December.
Definitional differences
It is not always clear what people mean when they talk about ‘unemployment’. The
following examples illustrate how a person may fit into the different measures of
unemployment:
• Mr Brown works part time. He earns very little and is looking for full-time
employment. This qualifies him for jobseeker support, but he is considered
employed in the HLFS. He is not considered jobless.
• Ms Grey does not work, and is seeking work through online advertisements. Her
spouse is employed and receives income above a specified amount, so Ms Grey is
not eligible for jobseeker support. She is considered unemployed in the HLFS, and
is included as jobless.
• John Smith is a 17-year-old school student. He is younger than 18 years so is not
eligible for jobseeker support. He is actively looking for a part-time job in the school
holidays, but is not available at the moment, so he is not considered unemployed in
the HLFS. However, he is counted as jobless.
Figure 3 shows the relationship between HLFS unemployment and jobseeker support –
work ready recipients. Table 1 below provides a more comprehensive summary of the
differences between HLFS unemployment and jobseeker support – work ready recipients.
Figure 3
HLFS unemployment (left) and jobseeker support – work ready recipients (right)
3. H LF S unempl oyment and j obs eeker support – wor k ready reci pients
15–17-year-olds,
65-year-olds and
over
People who are not employed
and are available for and
seeking part-time work
People available for and
seeking work who are
ineligible for a benefit
Benefit recipients
aged 18–64 years
available for and
seeking full-time
work
Benefit recipients
seeking full-time
work but unavailable
for a short period of
time
Benefit recipients
working part-time
People with family
or personal income
sufficient to
support them while
looking for work
10
A guide to unemployment statistics
People in the left section only of figure 3 will be represented in HLFS unemployment
statistics, people in the right section will only be counted in jobseeker support – work
ready numbers, whereas people in the middle section will be represented in both.
Because of these differences, HLFS unemployment numbers, and numbers receiving
jobseeker support – work ready, do not always closely parallel one another.
Figure 4 shows a time series of each of the unemployment measures. Note how the
measures move in similar directions, but have different levels.
Figure 4
Unemployment over time, by unemployment measure
Quarterly
4. U nempl oyment over ti me, by unempl oyment meas ure, quarterl y
Number (000)
180
160
140
HLFS unemployed
120
Jobseeker support –
work ready
100
80
60
40
20
0
M
08
J
S
D
M
09
J
S
D
M
10
J
S
D
M
11
J
S
D
M
12
J
S
D
M
13
J
S
D
Source: Statistics New Zealand, and the Ministry of Social Development
Table 1 shows the differences between the HLFS unemployed series, and jobseeker
support – work ready recipients.
11
M
14
A guide to unemployment statistics
Table 1
Measures of unemployment, by various definitional characteristics
1. M easur es of unemployment, by various definiti onal c harac teristics
Characteristic
HLFS unemployment
Jobseeker support – work ready
recipients
18–64 years (generally)
Age
15 years or over
Residency
’Usually resident’
Continuously lived in New Zealand
for at least two years at one time
(as a citizen or permanent resident)
Full-time or parttime work sought
Seeking to work for one hour
or more per week
Seeking full-time employment
Current work
status
Less than one hour per week
for pay or profit in the previous
week, and have had no
unpaid work in a relative’s
business
May work part time subject to
relevant income tests
Income
Not relevant
Ineligible if income is greater than a
certain threshold
Partner's
employment
status
Not relevant
Makes some ineligible (through
excess income)
In tertiary study
Can count as unemployed
Ineligible for jobseeker support
Efforts to find
work
Must have actively sought
work (eg contacted a private
employment agency, written to
an employer, or contacted
friends about a job) within the
last four weeks
Complies with job seeker
agreement, work test, and any
other administrative requirements
of Work and Income
Availability for
work
Must be available for work
within the next four weeks
May be unavailable for work for
short periods
Wanting income
assistance from
Work and Income
Not relevant
Must apply for jobseeker support,
and meet eligibility criteria
Timing
Quarterly average
Administrative count at month end
Source: Ministry of Social Development
Quality differences
The HLFS unemployment and jobless statistics are estimated based on a sample survey.
A typical margin of sampling error around these estimates is plus or minus 5 percent. As
jobseeker support numbers are administrative records, they are not subject to sampling
errors like HLFS unemployment and jobless statistics.
The number of people unemployed is seasonally adjusted to minimise the seasonal
effects in the data. Seasonally adjusting the data reveals the underlying trend and allows
for quarter-to-quarter comparisons. Jobless numbers are not seasonally adjusted, and
are suited for annual comparisons only.
Time series data based on jobseeker support – work ready numbers are not seasonally
adjusted. This means that the series are more suited for annual comparisons, rather than
month-to-month comparisons.
12
A guide to unemployment statistics
While the total number of people unemployed in the HLFS is seasonally adjusted, it is not
feasible to do so for every breakdown of unemployed people that the HLFS can provide.
As a result, only the number of unemployed males, females, and total for both sexes is
seasonally adjusted. Breakdowns by age, ethnicity, and regional council area are not
seasonally adjusted, so are only suitable for annual comparisons.
The HLFS labour force estimates provide a measure of the economically active
population. They are based on the principle that a person’s labour force status should be
determined on the basis of their activities during a specified reference period. In the
HLFS, this reference period is short (one week) to ensure that the measure accurately
reflects the labour supply situation at a specified moment in time.
Any estimate produced by Statistics NZ that is fewer than 1,000 people is subject to
suppression for quality reasons. The sampling errors of these estimates are too great for
most practical purposes, so they are not released. This limits the level of detail that can
be released on some breakdowns, such as by certain ethnicities and regions.
For confidentiality reasons, MSD suppresses data when the number of people in any
breakdown below national level is fewer than five. This may affect the breakdowns MSD
are able to provide of their benefit numbers.1
Changes in social welfare policy can also change beneficiary numbers. For example,
changing the eligibility criteria for a benefit may impact the number of people receiving it.
This can cause inconsistencies in the time series.
1
Statistics NZ produces a high-level registered unemployed / job seekers series from MSD. Contact
MSD for more detailed information on the registered job seekers.
13
3 Choosing between measures
HLFS unemployment statistics are used when the official measure of unemployment is
required. The unadjusted numbers are available broken down by age, sex, ethnicity, and
region (and combinations of these). The HLFS unemployment measure is particularly
good for making comparisons across demographic characteristics. Demographic
breakdowns are not released by MSD for jobseeker support – work ready numbers.
Unlike the other measures, HLFS unemployment is available as a seasonally adjusted
series. This is useful for users who wish to compare data quarter to quarter, rather than
annually. Additionally, HLFS unemployment figures should be used when comparing data
internationally, as the survey was designed according to the internationally agreed
standards of the ILO.
This measure is used as a key indicator of the health of labour market by stakeholders,
policy makers, media, politicians, economists, etc.
The HLFS jobless series is useful as an indicator of how many people are on the fringes
of the labour market, and how this number changes over time.
Jobseeker support – work ready numbers are useful when seeking information on
people who are seeking full-time work and unable to support themselves while doing so.
While the job seekers register was used historically as the official measure of
unemployment, its current use as a measure of unemployment is limited as policy
changes over the last 10 years have meant the numbers are not comparable over time.
Table 2 outlines the breakdown of information, by topic, available from the measures
discussed in this guide. Data from these measures is readily accessible on the Internet.
The official unemployment series from the HLFS has been separated into seasonally
adjusted and unadjusted to illustrate which breakdowns are available from the HLFS. The
unadjusted series tend to be more detailed, but are only suitable for annual comparisons.
14
A guide to unemployment statistics
Table 2
Breakdown of information available from each measure, by topic
2. Breakdown of infor mation availabl e from each meas ure, by topic
The jobless
Jobseeker
support –
work ready
recipients
Covers all
ages from 15
years
Total all ages
only (18+
years)
Covers all
ages from 15
years
Male, female,
and total
Male, female,
and total
Total both
sexes only
Male, female,
and total
Ethnicity
Total all
ethnicities
only
European,
Māori, Pacific
peoples,
Asian,
MELAA1, and
total
Total all
ethnicities only
European,
Māori, Pacific
peoples,
Asian,
MELAA1, and
total
Region
New Zealand
14 regional
council areas
New Zealand
14 regional
council areas
Time series
Suitable for
quarter-toquarter and
year-to-year
comparisons
from 1986
Suitable for
year-to-year
comparisons
from 1986
Suitable for
year-to-year
comparisons
from 2008
Suitable for
year-to-year
comparisons
from 1986
International
Comparable
to other ILO
and OECD
subscribing
countries
Not
comparable
internationally
Not
comparable
internationally
Not
comparable
internationally
HLFS unemployment
Topic
Seasonally
adjusted
Unadjusted
Age
Total all ages
only (15+
years)
Sex
1. Middle Eastern / Latin American / African.
Source: Ministry of Social Development, and Statistics New Zealand
15
Conclusion
This guide discussed four labour market measures:
• HLFS unemployment – the official measure of unemployment – provides a
comprehensive understanding of labour market trends across time. This measure is
used as the key indicator of the state of the labour market.
• The number of jobless people is useful as a broad labour market indicator.
• Jobseeker support – work ready figures measure the number of people whose
employment and financial situations meet the criteria for government assistance.
• The number of registered job seekers has limited use as a labour market
indicator.
16
Further reading
Ministry of Social Development (2014). Benefit fact sheets. Available from
www.msd.govt.nz.
Statistics New Zealand (nd). Household Labour Force Survey information releases.
Available from www.stats.govt.nz.
Work and Income (nd). Jobseeker support. Accessed 28 July 2014, available from
www.workandincome.govt.nz.
17