Men were more negatively affected by the 2007–09 downturn than women in the New Zealand labour market. A significant reason for this difference is the industries that each sex mainly works in. This paper outlines the trends in labour force participation, and the employment rate, to highlight the contrasting labour market performance for men and women over the five years to 2013.
Labour market trends over the past decade
Since 2007, the New Zealand labour market has been weak compared with its strength over the preceding five years. The New Zealand economy entered recession in early 2008. We had six successive quarters of negative gross domestic product growth as the global financial crisis developed. Figure 1 illustrates the significant effect of this negative growth on the labour market.
See the definitions for the main concepts use in this paper: the labour force participation rate, the employment rate, and the unemployment rate.
The unemployment rate showed the first signs of being affected by the recession when it began rising in the March 2008 quarter. This was probably influenced by firms not hiring due to tough economic conditions. As the global financial crisis developed, the increasing economic uncertainty impacted employment, with contracts not being renewed and workers being laid off. It is likely that the lack of employment opportunities contributed to fewer workers entering the labour force, which in turn would lower the labour force participation rate, as observed. Between the 2007 and 2009 December quarters, the unemployment rate increased 3.4 percentage points – from 3.5 percent to 6.9 percent.
Since 2009, the economy has been gradually recovering; however, the top level labour market rates have remained relatively flat. Following a weak 2012, we have recently seen positive movements in participation, employment, and unemployment rates as the labour market recovers.
Males more adversely affected by the economic downturn
The 2007–09 recession had notably different labour market outcomes for each sex; men were more adversely affected than women. Figures 2 and 3 illustrate the changes in labour force participation and employment rates for males and females, relative to the December 2007 quarter. This was just before the recession began to be felt in New Zealand’s economy.
Between the December 2007 quarter and the September 2009 quarters, employment and participation rates for males decreased by 3.5 and 1.2 percentage points, respectively. The female employment rate followed a similar downward trend, but by a smaller magnitude – falling 1.6 percentage points by the September 2009 quarter. Female employment held up in the early stages of the recession.
In recent quarters both the male and female employment and participation rates have improved, yet headline rates are still well below pre-recession levels.
Note: comparisons with before the recession should be treated with caution as this was a period of expansive economic growth.
Female participation continues long-term upward trend
Over the two decades to the September 2013 quarter, the female labour force participation rate rose steadily from 53.9 to 62.8 percent. Over this time, there was an increase of 418,000 in the female working-age population and an increase of 386,000 in the female labour force – that’s 13 of every 14 additional women entering the labour force. In contrast, male participation has been relatively flat, fluctuating around 74 percent. The long-term rise in female participation probably reflects the changing social and behavioural norms of women and the impact that this has on their labour market involvement.
In figure 2 we saw that the female labour force participation rate continued its long-term upward trend throughout the economic downturn – rising 0.9 percentage points between the December 2007 and September 2013 quarters. Figure 4 shows how the labour force participation rates for females, by age group, have changed over the two decades to 2013.
We see two main changes when comparing the movements between 1993 and 2013. Firstly, there was a notable increase in participation for women aged 25–34 years (the main child-bearing years). Secondly, participation of females aged 45 years and older was much greater (male participation rates also increased in this age group).
Some of the increased participation for women aged 25-34 years may reflect increasingly flexible working patterns allowing more women to combine employment with caring for children. Some of the increased participation in this age group may also be due to women remaining in the work force, either choosing to delay or forego childbearing. The increase for men and women aged 45 years and older may be partly due to improvements in health and life expectancy.
Manufacturing and construction industries more adversely affected by the downturn
Between the December 2007 and September 2009 quarters the number of people employed decreased by 33,000 in seasonally adjusted terms; 85 percent of this decrease was for men. The movement can be largely explained by the industries that men work in and how these industries are exposed to the economic downturn.
Although the recession impacted many industries, in this paper we focus on the ones that employ large proportions of each sex. The manufacturing and construction industries employ the highest proportions of men and are generally more susceptible to changes in economic conditions. The number of people employed in these industries in 2013 is still well below levels seen in 2007.
In contrast, the health and education industries, which grew considerably in the last 10 years to 2013, employ high proportions of women. These industries are generally less affected by changes in economic conditions. The number of people employed in the education and health industries in 2013 is well above the 2007 level, even after adjusting for population growth.
Figure 5 shows the total level movements in these main male- and female-majority industries, along with the proportion of each sex the industry employs.
When we compare the annual averages to the September 2007 and 2009 quarters we find that:
- male employment fell by 16,000 in manufacturing and 8,100 in construction
- female employment rose by 10,700 in education and training and 12,300 in health care and social assistance.
When we compare the annual averages to the September 2009 and 2011 quarters we saw similar movements as:
- male employment fell by 1,400 in manufacturing and 8,600 in construction
- female employment rose by 13,200 in education and training and 9,400 in health care and social assistance.
The current situation: An improving labour market
In recent times we have seen a different story. Despite a relatively weak 2012, 2013 showed an improvement – particularly for males. The early stages of the Canterbury rebuild and the expanding Auckland housing market had led to a turnaround in national construction with 11,200 more workers in this industry over the year to the September 2013 quarter, a large driving force behind male labour market outcomes.
Between the March and September 2013 quarters, male labour force participation has increased 1.1 percentage points, compared with 0.2 percentage points for females. The male employment rate has increased 0.9 percentage points compared with 0.4 percentage points for females.
Although the recession affected many workers, men were more negatively affected than women – due to the main industries they worked in. With many indicators pointing to a recovery, labour market outcomes for men and women will likely vary – depending on which industries employ them.
Definitions of the main concepts used in this paper
The labour force participation rate is the percentage of the working-age population (those aged 15 years and over) that is in the labour force. Participation is a key factor in determining our standard of living, and is influenced by economic, social, and demographic factors.
The employment rate is the number of people employed as a percentage of the working-age population. Employment rates provide a direct indicator of the health of the labour market, as well as a broad indicator of the state of the economy.
The unemployment rate is the number of people unemployed as a percentage of the labour force.
Infoshare allows you to organise data in the way that best meets your needs. To access the data used in this paper, select the following categories from the Infoshare homepage:
Subject category: Work, income and spending
Group: Household Labour Force Survey – HLF
Where our data on employment comes from
The statistics in this paper come from the Household Labour Force (HLFS). The HLFS measures the number of people employed, unemployed, and not in the labour force. It provides the official measure of employment and unemployment in New Zealand.
View Household Labour Force Survey information releases.
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Published 24 January 2014