The relative proportions of the employed, the unemployed and those not in the labour force depends on many factors, particularly the strength of the economy. Government policies on issues such as the availability of affordable childcare, or the age of eligibility for superannuation, also have an influence on people’s employment choices.
The changing size of the workforce
Since the beginning of the 20th century, net migration to New Zealand has been a major factor in the growth of the working-age population. Both the First and Second World Wars (when many working-age men were overseas), and the depression of the 1930s (when huge numbers were unemployed and immigration dried up), have been the exceptions to the overall trend of an expanding workforce.
Since the Second World War the total labour force has grown not only from immigration but also because of:
- the post-war ‘baby boom’
- Māori moving from rural to urban areas, and taking up paid employment
- a large increase in the numbers of older women entering the paid workforce.
As a result, from 1951 to 1986 the labour force more than doubled – from 740,000 to 1,600,000 – increasing at a faster rate than population growth. Then it shrank again due to the 1987 share market crash, the restructuring of New Zealand’s economy and the recession of 1989–92, when many workers did not seek re-employment after being made redundant.
From the late 1990s the workforce expanded again as economic conditions improved and immigration policies encouraged an inflow of skilled migrants. It is expected to continue growing until about 2020, then to drop once again as increasing numbers of ‘baby boomers’ retire.
Having a formal qualification, and the type of qualification, influences whether someone is part of the paid workforce. In 2006 only half of those with no formal educational qualification were in paid work. This rises to 68% for those with a New Zealand Qualifications Authority level 1 certificate, while 81% of those with a bachelor’s degree were employed in 2006.
Who’s not at work?
In 2006, about 3.5% of the adult population was officially unemployed, but another 28.5% were not employed for other reasons, such as carrying out domestic work at home.
Both younger and older people are most likely to be out of the workforce. In 2006, 34% of those aged 15–24 were not in the workforce – partly because they were increasingly likely to be studying or training. Also not in the workforce were 17% of those aged 25–44, 20% of 45–64-year-olds and 83% of those aged 65 or older.