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Explaining labour market statistics

This article explains the suite of official labour market measures produced by Statistics New Zealand.

The Household Labour Force Survey (HLFS) measures the number of people employed and unemployed, and reports the unemployment rate, the employment rate, and labour force participation rate.

Statistics NZ uses tax data to produce Linked Employer-Employee Data (LEED), which measures filled jobs for wage or salary earners.

The Quarterly Employment Survey estimates the number of filled jobs employed by established businesses.

Each of these statistics is designed to provide a slightly different window into the labour market, and combined, provide a comprehensive picture of the New Zealand labour market.

This article explains what is included in each measure. Each of these measures provides a different view of employment; and measures are not directly comparable. Definitions of terms like jobs and employment are specific to each of the measures and should be considered in that way.

Household Labour Force Survey (HLFS)

The HLFS measures the number of people employed, unemployed and not in the labour force. This is the most comprehensive measure of people employed.

HLFS results are based on a representative sample of 15,000 households and about 30,000 individuals throughout New Zealand. The survey is designed to produce robust estimates of the numbers of people employed, unemployed, and not in the labour force. It uses international best practice and accepted guidelines and definitions of employment and unemployment as set out by the International Labour Organisation (ILO). The HLFS is the official measure employment and unemployment in New Zealand.

People classified as employed in the HLFS are all people in the working-age population (ie those aged 15 years old and over) who, during the reference week:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment
  • worked without pay for one hour or more in work that contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative
  • had a job but were not at work due to: illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.

The population targeted by the HLFS is the civilian, usually resident, non-institutionalised population aged 15 years and over.

For more information see Household Labour Force Survey.

Linked Employer-Employee Data

The LEED measures filled jobs for employees who were paid wages or salaries by an employer. LEED also provides a range of measures of labour market dynamics. These give an insight into the inner workings of New Zealand's labour market. Labour market measures from LEED, such as job and worker flows, help explain what causes movements in employment measures.

LEED uses existing administrative data drawn from the taxation system, together with business data from Statistics NZ's Business Frame (BF).

LEED measures the number of filled jobs, not the number of people employed. This means that a person with multiple jobs on the reference day is counted multiple times.

LEED measures of labour market dynamics

LEED provides measures that tell us about the dynamics of the labour market. These include:

  • accessions – the number of new employees who have joined employers since the previous reference date
  • separations – the number of employees who have left employers since the previous reference date
  • worker turnover rate – the ratio of the average of the total accessions and separations to the average of the total jobs in the reference quarter and the previous quarter
  • job creation – the number of jobs created, since the previous reference date, when businesses expand or start up. For example, a business employing 100 workers with 10 accessions and five separations has job creation of five jobs
  • job destruction – the number of jobs lost, since the previous reference date, when businesses contract or shut down. For example, a business employing 100 workers with five accessions and 15 separations has job destruction of 10 jobs.

Net job change

The total change in jobs at the aggregate level – the net job change – is the difference between the counts of job creation and job destruction (job flows). Job flows reveal the amount of job turnover at the individual business level. Similarly, the difference between the counts of accessions and separations (worker flows) is also equal to the net job change. Worker flows reveal the turnover of individual employees.

Job creation and destruction, and worker separation and accession over longer comparison periods

The quarterly job creation and destruction statistics are designed to explain the change in aggregate jobs between two specific points in time – the 15th day of the middle month of the reference quarter and the 15th day of the middle month of the previous quarter. They compare the number of jobs at individual business location on these two dates.

Estimates of annual job creation and destruction can be produced on the same basis as the quarterly series, by comparing employers' job levels between two snapshots a year apart. This is different from simply summing together four quarters of quarterly data. This approach is not recommended, as summing quarterly job creation and destruction figures  to get an annual estimate will overstate permanent job creation and destruction by including seasonal and temporary variations in employment. A similar argument can be made against summing four quarters of worker accessions and separations to produce annual worker flow statistics.

See Guide to interpreting the LEED data.

Quarterly Employment Survey

The Quarterly Employment Survey (QES) estimates the number of filled jobs at established businesses, not the number of people employed. This means a person with more than one job during the reference week could be counted more than once.

The QES estimates the demand for labour by New Zealand businesses. From the survey responses, we estimate the levels and changes in employment; total weekly gross earnings; total weekly paid hours; average hourly and average weekly earnings; and average weekly paid hours in the industries we survey.

The QES surveys approximately 18,000 business locations selected from a population of economically significant enterprises in surveyed industries. Economically significant enterprises are those of a certain size, either in terms of their income (greater than $40,000), GST sales or expenses (greater than $30,000), or number of employees (three or more employees on average over the year).

There are some parts of the economy that the QES does not measure. In particular, agriculture is not included in the QES. Other exclusions are residential property operators and military and diplomatic staff.

For more information see Quarterly Employment Survey.

Published 13 September 2012

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