Survey of Family, Income and Employment Dynamics (Wave 2) September 2004

Commentary

Introduction

This release presents results from the Survey of Family, Income and Employment (SoFIE). SoFIE is New Zealand's first ever national survey designed to study income, family type and employment and how these change over time.

SoFIE is a 'longitudinal' survey, which means that the same respondents are visited over a number of years to measure how their individual and family circumstances change over time. In this respect SoFIE differs from cross-sectional surveys that typically measure an individual's circumstances at the time of a single interview.

This release contains analysis of data collected in the first two waves (or interview cycles) of the survey. Wave one of SoFIE was conducted from 1 October 2002 to 30 September 2003, and wave two from 1 October 2003 to 30 September 2004. At each interview respondents were asked to recall information about a specific annual reference period, which was the 12 months prior to the month of interview. This means that SoFIE data published in this release relates to a two-year period for each respondent that falls somewhere between 1 October 2001 and 30 September 2004.

Cross-sectional information on net worth, assets and liabilities collected from respondents in the second wave of the survey is also included in this release.

Rather than provide an exhaustive set of all the analysis that is possible from SoFIE data, this release is intended to illustrate types of analysis that can be done. A more detailed analysis of results from wave one and wave two of SoFIE will be available at a later date.

Changes in family and household types

At each interview survey participants were asked about the family members they lived with at different times in the previous year. This provides data on changes in an individual's family circumstances over time.

In this release a family is defined as two or more people living in the same household who comprise either a couple, with or without children, or one parent and their children. A child in a family can be of any age, but must not have a partner or children of their own living in the same household. This definition of family excludes parents and children who live in different households.

Changes in family type

This section provides information on the type of family individuals were living in at the end of wave one and at the end of wave two. Note that this data compares two points in time only. For example, a person who was in a couple with children family at the end of their first year in the survey who was also in a couple with children family one year later, may have had a period of time in a one parent with children family between these two dates.

  • Of those people with an identified family type, 89.6 percent were in the same type of family at the end of their first year in the survey and a year later.
  • Nine out of 10 people (92.2 percent) who were in a couple with child(ren) family at the end of their first year in the survey were in the same type of family a year later. Of the 148,900 people who were no longer in this type of family a year later, 41.0 percent were in a one parent with child(ren) family.
  • Of the 465,800 people who were in a one parent with child(ren) family at the end of their first year in the survey, 7.7 percent were in a couple with child(ren) family a year later, while 5.8 percent were no longer in a family nucleus. The majority (85.6 percent) of people in a one parent family at the end of their first year in the survey were also in a one parent family a year later.
  • The number of people not in a family nucleus increased between wave one and wave two. At wave one 13.4 percent of the population were not in a family nucleus. At wave two 15.6 percent of the population were not in a family nucleus.

Time spent in a family type

This section provides data on the total length of time an individual was in a particular type of family over the first two years (104 weeks) of the survey. All adults and children in the longitudinal population are included (3,718,400 individuals).

  • Four out of five people (79.1 percent) were in one type of family for the whole two-year period.
  • Those who were in a couple with child(ren) family at some stage over the two-year period were the most likely to be in the same type of family for the whole time (80.1 percent).
  • Of those who were in a one parent with child(ren) family at some stage over the two-year period, 64.0 percent were in this type of family for the whole two years.
  • People who were not in a family nucleus tended to spend shorter periods of time in this type of situation than those in other types of families. Of those who were not in a family nucleus for at least part of the two-year period, 36.2 percent were in this situation for the whole two years, while 33.9 percent spent less than one year not in a family nucleus.

Graph, Time-spell by Family Type.

Changes in household type

A household is defined as either one person who usually lives alone, or two or more people who usually live together and share facilities, such as eating or cooking facilities. The types of households collected in SoFIE are one family households, two or more family households, other multiperson households (ie a household with no family nucleus such as a flat), and one person households.

This section provides information on the type of household individuals were living in at their first interview and a year later. This data compares two points in time only. A person who was in the same type of household at their first interview and a year later may have been in a different household type at some time in between the two interviews.

  • The number of people living alone increased between wave one and wave two. At wave one, 297,000 people (8.0 percent) were living alone. At wave two, 349,800 people (9.4 percent) were living in a one person household.
  • Nine out of 10 people (90.8 percent) were in the same type of household at their first interview and a year later.
  • Most people (93.8 percent) who were in a one family household when they were interviewed in the first year were in the same type of household a year later. Of those who were in a one family household when interviewed in the first year and were no longer in this type of household a year later, 42.1 percent had moved into a multiperson household (ie a household with no family nucleus, such as a flat).
  • Of those people in a two or more family household at wave one, 58.9 percent were in the same type of household a year later, while 38.3 percent were in a one family household.

Income

SoFIE collects detailed information about personal income and sources of income. This release provides information on changes in personal annual income and changes in weekly employee earnings for those people who worked as paid employees at some stage over the first two waves of the survey.

Changes in personal annual income

At each interview, respondents aged 15 years and over were asked about income they received over the previous year. Personal annual income is the total gross (before tax) income received from all sources. For ease of comparison between years, data is presented in quintiles. Income quintiles divide the population into five groups by ranking people in order by the amount of income they receive. The bottom quintile (quintile 1) is the lowest 20 percent of the population in terms of income, while the top quintile (quintile 5) is the highest 20 percent of the population. Note that the wave one and wave two quintile boundaries are different because average personal annual income increased over the survey period. For example, those in the lowest quintile in wave one had a personal annual income of less than $7,448, while those in the lowest quintile in wave two had a personal annual income of less than $8,854.

Changes in personal annual income for all individuals aged 15 and over for the first two waves of SoFIE are summarised below.

  • Almost two-thirds (65.2 percent) of people were in the same personal annual income quintile in their first and second year in the survey. This does not necessarily mean that their personal annual income remained the same. However, it does mean that their income relative to the income of other people remained the same.
  • Of those who were not in the same quintile in their first and second years in the survey, one-half (50.3 percent) moved down to a lower quintile, and one-half (49.7 percent) moved up to a higher quintile.
  • Over three-quarters (77.5 percent) of people who were in the top quintile in their first year in the survey were also in the top quintile in their second year.
  • Those in the middle quintile (quintile 3) in their first year were the least likely to be in the same personal annual income quintile in their second year in the survey. Just over half (54.3 percent) remained in this middle quintile, while 19.8 percent moved to a higher quintile, and 25.8 percent moved downwards into either quintile one or two.

Weekly employee earnings

This section summarises changes in the level of weekly gross employee earnings for people who worked as paid employees at some stage over the two waves of the survey. For ease of comparison between years, data is presented in quintiles. Each quintile contains 20 percent of paid employees, ranked in order of the average weekly employee earnings received over the weeks in which they were employed during the year. Note that the wave one and wave two employee earnings quintile boundaries are different. This is due to movement in average employee earnings between wave one and wave two. For example, in wave one of the survey, the top quintile received average employee earnings of $922 and over per week. In wave two, the top quintile received average employee earnings of $960 and over per week.

  • Of those people who received employee earnings in both years they were in the survey, 69.9 percent remained in the same quintile in both years. This means that although their actual earnings may have changed, their relative position compared with other paid employees remained the same.
  • Of those individuals who were in the top quintile in their first year in the survey, 83.6 percent were also in the top quintile in their second year.
  • A relatively large number of people (229,400) moved up one quintile between years. This trend was most obvious for those people whose average weekly earnings placed them in quintiles 2 or 3 in their first year in the survey. One out of five (21.0 percent) people who were in quintile 2 in their first year moved into quintile 3 in their second year, while one out of five (18.9 percent) of those in quintile 3 in their first year had moved into quintile 4 in their second year in the survey.

Labour force involvement

At each interview, respondents were asked to report on their involvement in the labour force over the previous year. They were asked the start and end dates of periods of employment, of being not employed but seeking work, and of being not employed and not seeking work (eg being retired, studying, providing childcare, etc). This timeline information has been collected from respondents for two-years, providing a two-year (104-week) picture of labour force involvement.

Note that the category 'not employed but seeking work' is not the same as the official measure of unemployment derived from the Household Labour Force Survey, due to the difficulty respondents may have in remembering details of their job search activity and availability to start a new job for dates up to a year ago.

Changes in labour force involvement

This section presents information on labour force involvement at the end of wave one and at the end of wave two, for those aged 15 years and over. Note that this data compares two points in time only. For example, a person who was not working and seeking work at the end of their first year in the survey, and who was also not working and seeking work one year later, may have had one or more periods of employment between those two dates.

  • At the end of wave one of SoFIE, 62.7 percent of people aged 15 years and over were employed. One year later, the number of people employed had increased by 69,700, with 65.2 percent of people aged 15 years and over in employment.
  • Most people (93.2 percent) who were employed at the end of their first year in the survey were also employed a year later. Of those who were employed when interviewed at wave one, 5.6 percent had moved out of the workforce and were not looking for work a year later (ie they had retired, were studying or providing childcare etc). A further 19,700 people (1.1 percent) who were employed at the end of their first year in the survey were no longer employed a year later and were seeking work.
  • Of those who were not employed but seeking work at the end of their first year in the survey, less than one-quarter (23.2 percent) were not employed but seeking work a year later. Almost half (44.6 percent) of those who were not employed but seeking work at the end of their first year in the survey were employed a year later, while 31.9 percent were not employed and not seeking work.
  • A total of 192,000 people who were not employed at the end of their first year in the survey were employed a year later. Most of these people (148,300) were not seeking work when first interviewed.

Number of labour force involvement time-spells

This section provides data on the number of time-spells that an individual was in a particular type of labour force involvement over the first two waves of SoFIE. All people aged 15 years and over in the longitudinal population are included (2,874,800 people). A time-spell can be from one week to 104 weeks (ie the total number of weeks in the survey).

Note that having one time-spell in a particular labour force involvement type does not exclude an individual from also having a time-spell in another labour force type. For example, a person could have one time-spell employed, then later in the survey period spend time overseas, and on arrival back in the country spend a time-spell not employed but seeking work.

  • Over the first two years of the survey, 73.2 percent of all people aged 15 years and over spent at least part of the time employed. Of those people, 86.5 percent had one time-spell employed and 13.5 percent had two or more time-spells of employment.
  • For people aged 15 years and over, 8.2 percent had a period of time during their first two years in the survey where they were not employed and were seeking work.

Time spent in a labour force state

This section provides information on the total length of time people spent involved in different labour force states over the first two years (104 weeks) of the survey.

  • Of those who were employed for at least some of the two-year period, 67.2 percent were employed for the whole time.
  • Of those people who spent some time not employed but seeking work during the two-year period, almost two-thirds (61.7 percent) spent less than 26 weeks not employed but seeking work over the two-year period, while 23.3 percent spent between six months and a year not employed but seeking work.

Net worth

 In the second wave of SoFIE, respondents were asked to provide details about the type and amount of assets and liabilities they had at the household interview date. Information on assets and liabilities will be collected every second wave of SoFIE, that is years two, four, six and eight. Net worth is calculated from this information by subtracting the total value of all liabilities from the total value of all assets.

Data in this release is based on information collected from people aged 15 years and over who were interviewed at wave two. This includes people who are not part of the longitudinal population, that is those who were not originally selected to be part of SoFIE, but who were interviewed in the second wave because they were living with a longitudinal respondent.

Net worth

The population aged 15 years and over was divided into quintiles to examine the distribution of net worth. Net worth quintiles divide the population into five groups by ranking people in order of their net worth. The bottom quintile (quintile 1) is the lowest 20 percent of the population in terms of net worth, while the top quintile (quintile 5) is the highest 20 percent of the population.

  • The median net worth for individuals aged 15 years and older was $69,800. Median net worth increased with age, peaking at $155,800 for individuals in the 45- to 64-year age group, then declining slightly to $149,500 for individuals aged 65 years and over.
  • Two out of three people (67.1 percent) aged 15 to 24 were in the lowest quintile, with a net worth of less than $6,010.
  • Two out of three people (65.9 percent ) aged 65 years and older were in the top two quintiles (quintiles 4 and 5).
  • The median net worth of men of all ages was $70,900, compared with $68,500 for women. The largest difference in median net worth between men and women was in the 45- to 64-year age group. Men in this age group had a median net worth of $167,300, compared with $146,100 for women. 

Graph, Median Net Worth for Individuals.

Assets

This section provides information on the number of people aged 15 years and over with assets, the types of assets they own, and the value of those assets.

  • Almost all people (99.5 percent) aged 15 years and over owned assets. For people who had assets, the median value of those assets was $107,000.
  • The three most common assets held by individuals were household items, vehicles and leisure equipment, and bank accounts. Of all people aged 15 years and over, 98.1 percent owned household items, 81.8 percent owned vehicle(s) and leisure equipment, and 75.8 percent had a bank account in credit.
  • In terms of value, residential property made up the largest proportion of total asset value (44.3 percent). The next largest type of asset in terms of value was businesses (18.0 percent ).
  • For those people in the 15- to 24-year age group with assets, the median value of those assets was $5,300. People in the 45- to 64-year age group with assets had the highest median value of assets ($188,700).

Liabilities

This section provides information on the number of people aged 15 years and over with liabilities, the types of liabilities they have, and the value of those liabilities.    

  • Two-thirds (67.3 percent) of all people aged 15 years and over had liabilities. For people with liabilities, the median value of those liabilities was $15,500.
  • The most common liabilities were credit card debt and mortgages. Four out of 10 people (40.5 percent) aged 15 years and over had credit card debt, and three out of 10 (31.2 percent) had mortgage debt.
  • In terms of value, mortgage debt accounted for 78.8 percent of total debt. The next largest type of debt in terms of value was bank account debt (ie overdrafts, revolving credit other than mortgages), at 11.5 percent of total debt.
  • For people with liabilities, the median value of liabilities was highest for the 25- to 44-year age group ($31,300) and lowest for those in the 65 and over age group ($700).
  • One-quarter (25.8 percent) of all individuals aged 15 to 24 years had a student loan. The median value of those student loans was $10,000.

For technical information contact:
Roberta Loretto or Karin Henshaw
Wellington 04 931 4600
Email: info@stats.govt.nz