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

Introduction

The Survey of Family, Income and Employment Dynamics (SoFIE) began in October 2002 and is the largest longitudinal survey ever run in New Zealand. The primary focus of SoFIE is to look at the changes in individual, family and household income, and the factors that influence these changes, such as involvement in the labour force, and family composition. The survey re-interviews the same group of individuals over eight years (or 'waves') in order to build a picture of how their circumstances and lifestyles change over time.

The statistics presented in the attached tables present selected information from the first two waves of SoFIE, from October 2002 through to September 2004.

Survey scope

The target population for SoFIE is the usually resident population of New Zealand living in private dwellings. This means the survey excludes overseas visitors who intend to stay in New Zealand for less than 12 months, non-New Zealand diplomats and diplomatic staff and their dependents, members of non-New Zealand armed forces stationed in New Zealand and their dependents, and people living in institutions or in establishments such as boarding houses, hotels, motels and hostels.

For practical reasons, the population surveyed is restricted to people whose usual residence at the time of sample selection is a permanent private dwelling on the North Island, South Island or Waiheke Island.

Survey methodology

At wave one, a total of about 15,000 randomly-selected households were approached to take part in SoFIE. Approximately 11,500 households agreed to be interviewed, and data was collected from over 22,000 eligible individuals aged 15 and over. All adults responding at wave one, and children aged less than 15 for which data was collected in wave one, are known as Original Sample Members (OSMs). The intention is to re-interview all OSMs aged 15 years and over in subsequent years, regardless of changes in their place of residence. OSM children will not be interviewed directly until they turn 15. From the second interview onwards, other members of an OSM's household who are not OSMs ('cohabitants') are also interviewed while they remain living with an OSM. Cohabitants will be asked a reduced set of questions and will not be followed up if they leave the OSM's household.

Collection method

SoFIE is conducted using computer-assisted interviewing. Interviewers use laptop computers to administer the questionnaire face to face with the respondent in the respondent's home. There are two separate questionnaires used to collect information for SoFIE. The Household Questionnaire is answered by one person in each household and collects household characteristics. A Personal Questionnaire is completed with every OSM in the household aged 15 years and over. A slightly shorter version of the Personal Questionnaire is completed with any adult cohabitating with an OSM adult from wave two onwards. Children aged less than 15 years are not interviewed; instead, a nominated parent/other adult is asked questions about them.
The household questionnaire contains two sets or 'modules' of questions:

1. Household
2. Standard of living.

The personal questionnaire contains eight standard modules:

1. Demographics
2. Child (if the respondent is a nominated adult answering about a child)
3. Labour market history
4. Education
5. Family
6. Labour market
7. Income
8. Contact.

The SoFIE questionnaires collect both point-in-time data and spell data. Point-in-time data relates to a single date, usually the interview date (eg the respondent’s educational qualifications as at the interview date). Spell data relates to a period of time or time-spell with a defined start and end date reported by the respondent (eg the period of time a respondent lived with a family member, or the length of time a person worked for a particular employer). The analysis in this release includes uncompleted spells, that is spells that were ongoing at the time of the second interview.

Over the eight waves of the survey, different modules will be added to gather a more complete picture of the influences on individual and household circumstances. In waves two, four, six and eight a net worth module will be included, and in waves three, five and seven a health module will be included. The net worth module collects information on the type and value of assets and liabilities.

Survey period

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. The original sample was spread out over the 12 months in the first wave so that interviewing was continuous over the year. The interview for each subsequent wave will always be in roughly the same month as the interview of wave one. At each interview the respondent is asked to recall information about a specific annual reference period. The annual reference period is 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.

Response rate

In a longitudinal survey the response rate for the survey will decline over time as individuals are unable to be located, leave the country, or die. Minimising attrition (loss of respondents) is very important, because of the cumulative effect of non-response over time. Statistics New Zealand is putting considerable effort into maintaining contact with respondents in order to be able to interview them in subsequent years, thus maintaining a high response rate for SoFIE.

Despite this, Statistics New Zealand has been unable to collect valid data from all selected eligible individuals. The most common reasons for this were that a respondent was unable to be contacted, or that a respondent was not able to provide all the relevant information asked for.

For wave one, approximately 77 percent of eligible households responded. In the second year of the survey, 87 percent of all respondents from wave one responded again.

Assets and liabilities

Tables included in this release provide asset and liability data collected in wave two of SoFIE, and net worth information, calculated from asset and liability data. Methodological difference between the Household Savings Survey (HSS) and SoFIE mean that these two surveys are not necessarily directly comparable. The main differences between the surveys are:

• SoFIE collects asset and liability types and amounts for each individual in the survey. People who have joint assets are asked to report their own share of any assets and liabilities jointly owned. In contrast, the HSS did not collect individual share of assets for survey respondents who were part of a couple, and no attempt was made in the HSS to separate out jointly owned assets.
• SoFIE collects the value of household items, whereas the HSS did not.
• The SoFIE population includes individuals aged 15 and over, whereas the HSS population was people 18 years and over.

Estimation

A basic survey weight is attached to each record to indicate the probability of that unit being included in the sample. Two types of adjustment are then applied to the basic survey weights to improve the reliability of the survey estimates. The basic weights are first inflated to adjust for non-response, and are then further adjusted to ensure that estimates of relevant population characteristics match known population totals. The population totals used for SoFIE are derived from population estimates produced by Statistics New Zealand's Demography Division for counts for different age-sex groups.

Imputation

Some respondents are unable to provide complete information. In these cases, missing values are imputed for all key fields. The key fields for SoFIE are age, ethnicity, income and pay details. Where possible, information is imputed deterministically, using other information reported by the respondent to provide a likely estimate for the missing value. When deterministic imputation is not possible, a 'hot deck' imputation method is used. This method involves selecting another respondent with similar characteristics to become the 'donor' and provide the imputed value.

Reliability of survey estimates

The initial SoFIE sample comprised approximately 11,500 responding private households, and 22,000 adults sampled within them, on a statistically representative basis from rural and urban areas throughout New Zealand. Information is collected from each member (including children) of a sampled household that falls within the scope of the survey and meets survey coverage rules. In wave two there were just under 20,000 responding OSM adults.

Two types of error are possible in estimates based on a sample survey: sampling error and non-sampling error. Sampling error is a measure of the variability that occurs by chance because a sample rather than an entire population is surveyed. All sampling errors for SoFIE are measured at the 95 percent confidence interval. The estimates in the tables have had specific sampling errors calculated for them that are available on request.

Non-sampling errors include errors arising from biases in the patterns of response and non-response, inaccuracies in reporting by respondents, and errors in the recording and coding of data. Statistics New Zealand endeavours to minimise the impact of these errors through the application of best-practice survey methods and monitoring known indicators (eg non-response).

Rounding

Due to rounding procedures, table totals may differ from the sum of individual cells. All counts and values in the tables have been rounded to the nearest hundred.

Definitions

A full set of definitions is available from Statistics New Zealand. The definitions listed refer only to terms used in the Hot Off the Press commentary.

Annual reference period

Annual data is data in which one value is collected for a 12-month period. The 12-month period is defined by the respondent's start of annual period date and end of annual period date. An example of annual data is the amount of income the respondent received from interest over an annual reference period. 

Assets

Assets are defined as major assets held by the respondent when they are interviewed. Every second wave (ie waves two, four, six and eight) SoFIE collects information about the following types of assets: residential property; household effects; sporting, leisure or hobby equipment; motor vehicles (other than for business); money deposited with banks; life insurance and superannuation schemes the respondent is contributing to; investments with other financial institutions; business ownership and investments; and any other assets

End of annual period date (EAPD)

EAPD refers to the date which marks the end of the annual reference period for the respondent.

Family

The definition of the family is based on the concept of a family nucleus. A family nucleus is a couple, with or without child(ren), or one parent and their child(ren) where the children do not have partners or children of their own living in the same household. Note that the children can be of any age.

Family type describes the type of family a person is living in, not who is in the family. Someone who is in a couple at the first interview of SoFIE, for example, may also be in a couple a year later – however they may have changed partners during the course of the year.

Household

A household is either one person who usually resides alone, or two or more people who usually reside together and share facilities (such as eating facilities, cooking facilities, bathroom and toilet facilities, and a living area).

Household type describes the type of household a person is living in, not who is in the household.

Household enumeration date (HED)

The household enumeration date is the date when all eligible members of a household have been identified and recorded in the Household Questionnaire.

Income

This release covers aspects of annual personal income and weekly employee earnings.

Annual personal income

This is the total income received from all sources by a person aged 15 years or over in the annual reference period. Personal income does not necessarily reflect an individual's circumstances, due to income sharing within a family or household.

Weekly employee earnings

These are the earnings reported by those people with at least one spell of employee earnings during the year. Weekly employee earnings include gross salary/wages, regular allowances, and commissions and bonuses received as usual pay from a spell of employment, divided by the duration of the spell (in weeks). Self-employment income is not included, and redundancy, holiday pay, back pay and other irregular payments are also excluded.

Labour force involvement

A respondent's labour force involvement is defined as being either employed, not employed but seeking work, or not employed and not seeking work. The definitions for involvement in the labour force are aligned with, but not identical to, the concepts and definitions used in the Household Labour Force Survey.

Employed

This definition includes all individuals in the working age population who worked for one hour or more, either as an employee or in self-employment; or worked without pay for one hour or more in work which contributed directly to the operation of a farm, business or practice owned or operated by a relative; or had a job but were not at work due to own illness or injury, personal or family responsibilites, bad weather or mechanical breakdown, direct involvement in industrial dispute, or leave or holiday.

Not employed but seeking work

This definition includes all individuals in the working age population who were without a paid job and seeking work. Note that this is not the same as the official measure of unemployment derived from the Household Labour Force Survey, because of 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.

Not employed and not seeking work

This definition includes any person in the working age population who is neither employed nor seeking employment: for example, people who are retired, or have personal or family responsibilites; people attending educational institutions; people permanently unable to work due to disabilites; and people not actively seeking work.

Liabilities

Liabilities are defined as the prinicipal sum of money owed to government or private institutions, or other persons outside the household. It excludes interest on debt owed, as this is viewed as a service fee. Liabilities are collected every second wave, from wave two onwards. The following types of liabilities are collected: mortage debt; bank account debt; student loans; credit card debt; and hire purchase debt.

Longitudinal respondent

People responding in all waves of the survey are called longitudinal respondents. Those people who have responded in both wave one and wave two of SoFIE are the current longitudinal responding individuals.

Median

The median is the value at which half of the units in the population have lower values and half have higher values when all values have been ordered from highest to lowest. The median is less sensitive to extreme values than the mean. This makes it a more robust measure of the centre of a distribution for highly skewed distributions. If the mean is higher than the median, it could indicate the distribution is skewed towards the top end of the sample or that the distribution is bimodal (ie it has two 'peaks')

Net worth

Net worth is calculated by subtracting the total value of all liabilities from the total value of all assets.

Spell

A spell is a period of time (ie a time-spell) reported by a respondent. For example, the period of time a respondent is in paid employment is referred to as an employment 'spell'.

Wave 

In a longitudinal survey, interviews are conducted with the same people repeatedly over time. SoFIE is thus made up of cycles, or 'waves', of interviewing. The wave length (ie the time between each wave) for SoFIE is one year, which means that respondents are interviewed annually. The first time respondents were visited was known as wave one, the second time as wave two, and so on.

Quintile

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.

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.

Quintile boundary

The quintile boundary is the dollar value at which the quintile falls. Given that the bottom quintile for annual personal income is income less than $8,854, the quintile boundary between quintiles 1 and 2 is $8,854. 

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