How much do the self-employed earn?

Two potential data sources for answering this question are the Linked Employer-Employee Dataset (LEED) person-level and the New Zealand Income Survey (NZIS). The advantages and disadvantages of using each of these data sources are outlined below. 

Linked Employer-Employee Dataset (LEED) person-level data

Linked Employer-Employee Dataset (LEED) person-level data provides an annual measure of self-employed earnings.

Advantages of using LEED person-level data

• Accuracy: The LEED person-level data release uses administrative rather than sample survey data and has full population coverage of those registered as self-employed with Inland Revenue. For this reason, the LEED is not subject to sampling error and is particularly accurate.

Disadvantages of using LEED person-level data:

• Less timely: LEED person-level data is not as timely as NZIS data. LEED person-level releases are made available in the year following the tax year to which the data references. 

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New Zealand Income Survey

The New Zealand Income Survey gives a weekly measure of self-employed earnings.

Advantages of using NZIS data:

• More timely: NZIS data is more timely than LEED person-level data and is released approximately three months following the period to which the data references. However, it should be noted that the NZIS is released for the June quarter only. This means that ten months after the most recent June release, the NZIS will no longer be more timely than the LEED person-level data release.

Disadvantages of using NZIS data:

• Sample error: NZIS data provides a less precise measure of earnings than LEED person-level data because it uses data from a sample survey. Sample surveys take a sample of the population as representative of the whole population. This leads to sampling error which, to some extent, affects the accuracy of data produced.

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