A Guide to Unemployment Statistics

8/3/2019 A Guide to Unemployment Statistics

1/13

A Guide to Unemployment Statistics

1

http://www.stats.govt.nz/http://www.stats.govt.nz/


2/13

Acknowledgement

Statistics New Zealand would like to thank the Ministry of Social Development and the

Department of Labour for all their input into this guide.

Liability statement

Statistics New Zealand gives no warranty that the information or data supplied in this paper is error

free. All care and diligence has been used, however, in processing, analysing, and extracting

information. Statistics New Zealand will not be liable for any loss or damage suffered by customers

consequent upon the use directly, or indirectly, of the information in this paper.

Reproduction of material

Any table or other material in this paper may be reproduced and published, provided that it does

not purport to be published under government authority and that acknowledgement is made of

this source.

Citation

Statistics New Zealand (2010). A guide to unemployment statistics. Wellington: Statistics New

Zealand

Published in May 2010 by

Statistics New Zealand

Tatauranga Aotearoa

PO Box 2922

Wellington, New Zealand

[email protected]

[email protected]

www.stats.govt.nz

ISBN 978-478-35340-2 (online)


3/13


3

Contents

Overview ........................................................................................................................................... 4Introducing measures of unemployment ............................................................................... 5

Differences in purpose of measures......................................................................................... 6

Timing and definitional differences .......................................................................................... 7

Timing differences .................................................................................................................................. 7

Definitional differences ......................................................................................................................... 7

Quality differences.......................................................................................................................... 9

The jobless ..................... ..................... ..................... ..................... ..................... ...................... ....... 10

Differences between measures ............................................................................................... 11

What each indicator is suitable for.......................................................................................... 12Conclusion and further reading ............................................................................................... 13

Conclusion ............................................................................................................................................. 13

Further reading ..................................................................................................................................... 13

Tables

1 Measures of unemployment, by various definitional characteristics ........................... 11

2 Breakdown of information available from each measure or indicator, by topic ...... 12

Figures

1 Official unemployment and unemployment benefit recipients ....................................... 7

2 Unemployment mesures over time ........................................................................................... 8
http://www.stats.govt.nz/http://www.stats.govt.nz/http://www.stats.govt.nz/


4/13


4

Overview

A Guide to Unemployment Statisticsexplores three measures of unemployment in New

Zealand: the unemployment benefit, the job-seekers register, and the Household Labour

Force Survey (HLFS). Each of these indicators has a different purpose, as well as

different definitions, timings, and qualities.

This guide gives an overview of each indicator, what they measure, how they are

different from each other, and how they can best be used (by the media, stakeholders,

policy makers, etc).


5/13


5

Introducing measures of unemployment

Statistics New Zealands Household Labour Force Survey (HLFS) provides the official

unemployment statistics for New Zealand. This survey has been specifically designed to

measure employment and unemployment according to the internationally agreed

standards of the International Labour Organisation (ILO).

Occasionally, commentators suggest looking to other indicators, such as the

unemployment benefit numbers, or the job-seekers register, both produced by the

Ministry of Social Development (MSD), as alternative indicators of the health of the

labour market.

Each of these three measures has a different purpose, as well as different definitions,

timings, and qualities. A Guide to Unemployment Statisticsgives an overview of each

indicator, what they measure, and how they can best be used (by the media,

stakeholders, policy makers, etc).

It is not always clear what people mean when they talk about unemployment. The

following examples illustrate how a person may fit into the different measures of

unemployment:

Mr Brown works part-time. He earns very little and is looking for full-time

employment. This qualifies him for the unemployment benefit and the job-

seekers register, but he is considered employed in the HLFS.

Ms Grey does not work, but is actively seeking work. Her spouse is employed

and receives income above a specified amount, so Ms Grey is not eligible for

the unemployment benefit. She is considered unemployed in the HLFS.John Smith is a 17-year-old school student He is supported by his parents so is

not eligible for an unemployment benefit, but he is actively looking for a part-

time job, so he counts as unemployed in the HLFS.

The HLFS unemployment statistics, produced by Statistics NZ, provide a comprehensive

understanding of labour market trends across time. Benefit numbers, produced by the

Ministry of Social Development (MSD), can provide insight into the labour market across

time, but their use should be limited to annual comparisons. It is also important to note

any structural changes to policy and practice that may have affected the numbers over

time. The number of registered job-seekers, produced by MSD and Statistics NZ, has

very limited uses as a labour market indicator. The number of jobless people, producedby Statistics NZ, is useful as a broad labour market indicator.


6/13


6

Differences in purpose of measures

The Household Labour Force Survey (HLFS), unemployment benefit numbers, and the

job-seekers register each have a different purpose.

Before 1985, the only quarterly measure of unemployment in New Zealand was derived

from the register of unemployment, maintained by the Department of Labour. However,

this measure had various shortcomings which led to the development of the HLFS. The

HLFS was specifically designed to provide more consistent and accurate measurement

of employment and unemployment trends in the labour market.

Unemployment benefits are designed to provide financial assistance to people who are

looking for work or who are training for work. There are specific eligibility criteria for

benefits, some of which are outlined in table 1 (page 11). These eligibility criteria can

change over time, causing inconsistencies in the time series. The eligibility for the

unemployment benefit is affected by the economic activity of other householdmembers, the persons health status (sickness and invalids benefit) and sole parent

status (DPB). The HLFS unemployment rate, however, measures the economic activity

of the respondent only.

The job-seekers register is no longer used for reporting on unemployment because

policy changes over the last 10 years mean than numbers are not comparable over

time.


7/13


7

Timing and definitional differences

Timing differences

The official unemployment statistics are quarterly averages, whereas unemployment

benefit recipient figures refer to counts of people receiving an unemployment benefit at

the end of the month. This timing difference is particularly important when there are

substantial seasonal rises in unemployment, for example towards the end of December.

Definitional differences

Figure 1 shows a simplified comparison and contrast of official unemployment and the

unemployment benefit. Table 1 (page 11) provides more comprehensive summaries of

the differences between the officially unemployed series and unemployment benefit

recipients.

Figure 1

Official unemployment (left) and unemployment benefit recipients (right)

People in the left section only may be represented in the official unemployment

statistics, people in the right section only may be counted in the unemployment benefits

numbers, people in the middle section may be counted in both.

Because of these differences, the official unemployment measures from the HLFS and

numbers receiving unemployment benefits do not always closely parallel one another.

Benefit recipients aged

1864 years available for

and seeking full-time work

A small number of

married 1617-year-olds

with dependants receiving

benefits

People who are notemployed and areavailable for and seekingpart-time workor have anew job to start within fourweeks

People available for andseeking work who areineligible for a benefit

Benefit recipients

working part-time

1517-year-olds,65-year-olds andover

People with familyor personal incomesufficient to supportthem while looking forwork


8/13


8

Figure 2 shows a time series of each of the unemployment measures. Note how the

measures move in similar directions, but have different levels.

Figure 2

Unemployment measures over time

Source: Statistics New Zealand and Ministry of Social Development

0

20

40

60

80

100

120

140

160

180

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Level(000)

Year

Official unemployed

Unemployment benefit


9/13


9

Quality differences

The official unemployment statistics are estimated based on a sample survey. A typical

margin of sampling error around these estimates is plus-or-minus five percent. The

number of people unemployed is then seasonally adjusted to minimise the seasonal

effects in the data. Seasonally adjusting the data reveals the underlying trend and allows

for quarter-to-quarter comparisons.

While the headline number is seasonally adjusted, it is not feasible to do so for every

breakdown of unemployed people that the HLFS can provide. As a result, only the

number of unemployed males, females, and total for both sexes is seasonally adjusted.

Breakdowns by age, ethnicity, and regional council area are not seasonally adjusted, so

are only suitable for annual comparisons.

The official labour force estimates provide a measure of the economically active

population. It is based on the principle that a person's labour force status should bedetermined on the basis of their activities during a specified reference period. In the

HLFS, this reference period is short (one week) to ensure that the measure reflects the

labour supply situation at a specified moment in time. As stated above, the official

unemployment statistics are seasonally adjusted to remove seasonal effects, giving a

truer picture of the underlying labour market than unadjusted figures.

Any estimate produced by Statistics NZ that is less than 1,000 people is subject to

suppression for quality reasons. The sampling errors of these estimates are too great for

most practical purposes, so they are not released. This limits the level of detail that can

be released on some breakdowns, such as by certain ethnicities and regions.

Changes in social welfare policy can also change beneficiary numbers. These changes

can introduce variability into the count that also affects the time-series.

Series based on unemployment benefit numbers are not seasonally adjusted. This

means that the series are more suited for annual comparisons, rather than quarter-to-

quarter comparisons.

As unemployment benefit numbers are administrative records, they are not subject to

sampling errors like official unemployment statistics. However, where the number of

people in any breakdown below national level is less than five, the data may be

suppressed for confidentiality reasons. MSD may be able to provide detailed

breakdowns of these numbers.1

1Statistics NZ produces a high level registered unemployed/job-seekers series from MSD. Contact MSD for

more detailed information on the registered job-seekers.


10/13


10

The jobless

A broader measure of unemployment is the jobless indicator.

To count as officially unemployed, a person must be both actively seeking and availablefor paid work. This excludes people who are available, but not seeking and people who

are actively seeking, but not available. To account for this, the HLFS also produces a

broader series called the jobless. This series incorporates the official unemployed, those

who are available for, but not actively seeking work and those who are actively seeking,

but not available for work. The jobless series is not seasonally adjusted, which means

that it is more suitable for annual comparisons than quarter-on-quarter comparisons.

The jobless can be further broken down into the discouraged and others available but

not actively seeking work. The latter may include students or parents with young

children.


11/13


11

Differences between measures

Table 1 shows the differences between the officially unemployed series and unemployment benefit

recipients.

Table 1

Measures of unemployment

By various definitional characteristicsCharacteristic Officially unemployed (from Household

Labour Force Survey) Unemployment benefit recipientsAge 15 years or over 1864 years (generally)

Residency Usually resident Continuously lived in New Zealand for

two years since becoming a citizen or

permanent resident

Full-time or part-time

work sought

Seeking to work for one hour or more per

week

Seeking full-time employment

Current work status Less than one hour per week for pay or

profit in the previous week, and have had

no unpaid work in a relative's business

May work part-time subject to relevant

income tests

Income Not relevant Ineligible if income is in greater than a

threshold

Partner's employment

status

Not relevant Makes some ineligible (through excess

income)

In tertiary study Can count as unemployed Generally ineligible for unemployment

benefitEfforts to find work Must have actively sought work (done

more than checking newspaper

advertisements) within the last four

weeks

Complies with Job-seeker Agreement,

work test, and any other administrative

requirements of Work and Income

Availability for work Must be available for work within the next

four weeks

May be unavailable for work for short

periods

Wanting income

assistance from Work

and Income

Not relevant Must apply for an unemployment

benefit, and meet eligibility criteria

Timing Quarterly average Administrative count at month end

Source: Modified version of a table on the MSD website, www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-

definition.html#differences
http://www.stats.govt.nz/http://www.stats.govt.nz/http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-definition.html#differenceshttp://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-definition.html#differenceshttp://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-definition.html#differenceshttp://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-definition.html#differenceshttp://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-definition.html#differenceshttp://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/statistical-report-2008/multiple-sections/unemployed-definition.html#differenceshttp://www.stats.govt.nz/


12/13


12

What each indicator is suitable for

Table 2 outlines the breakdown of information, by topic, available from the measures

discussed in this guide. Data from these measures is readily accessible on the Internet.

The official unemployment series has been separated into seasonally adjusted and

unadjusted to illustrate which breakdowns are available from the HLFS. The unadjusted

series tend to be more detailed, but are only suitable for annual comparisons.

Table 2

Breakdown of information available from each measure or indicator

By topic

TopicOfficially unemployed (from Household

Labour Force Survey) Unemployment benefitrecipients The joblessSeasonally adjusted Unadjusted

Age

Total all ages only

(15+ years)

Five-year age groups

and total all ages

Covers ages 1864 (with

some 16 and 17 year

olds)

Covers all ages from

15 years old

SexMale, female, and

total

Male, female, and

total

Male, female, and total Male, female, and

total

Ethnicity

Total all ethnicities

only

European, Mori,

Pacific peoples,

Asian, MELAA(1), and

total

Mori, Pacific peoples,

Asian, European, other

and total

European, Mori,

Pacific peoples,

Asian, MELAA(1), and

total

Region

New Zealand 14 regional councilareas

73 territorial localauthorities, 13 Work and

Income regions, service

centres

14 regional councilareas

Time series

Suitable for quarter-

to-quarter and year-

to-year comparisons

Suitable for year-to-

year comparisons

from 1986

Suitable comparisons

available from 1996

Suitable for year-to-

year comparisons

International

Comparable to other

ILO and OECD

subscribing countries

Comparable to other

ILO and OECD

subscribing

countries

Not comparable

internationally

Not comparable

internationally

1. MELAA stands for Middle Eastern, Latin American and African


13/13


13

Conclusion and further reading

Conclusion

Four labour market indicators have been discussed in this guide.

The official unemployment statistics provide a comprehensive understanding of labour

market trends across time.

Unemployment benefit numbers measure the number of people whose employment

situation is such that they meet the criteria for government assistance, but their use

should be limited to annual comparisons. It is also important to note any structural

changes to social welfare that may have affected the numbers over time.

The number of registered job-seekers is of very limited use as a labour market indicator.

The number of jobless people is useful as a broad labour market indicator. Like the

benefit numbers, its use should be limited to annual comparisons, as it is not seasonally

adjusted.

Further reading

Ministry of Social Development (2005). Definition of the officially unemployed, and

differences from registered job-seekers. Available from www.msd.govt.nz/about-msd-

and-our-work/publications-resources/statistics/index.html.

Ministry of Social Development (2008). 10 year trends in benefit numbers: December

2008. Available from www.msd.govt.nz/about-msd-and-our-work/publications-

resources/statistics/index.html.

Ministry of Social Development (2009). 10 year trends in benefit numbers: June 2009.

Available from www.msd.govt.nz/about-msd-and-our-work/publications-


Ministry of Social Development (2009). 10 year trends in benefit numbers: March



Ministry of Social Development (2009). 10 year trends in benefit numbers: September


resources/statistics/index.html.Statistics New Zealand. Household Labour Force Survey releases are available from

www.stats.govt.nz/methods_and_services/information-releases/

household-labour-force-survey.aspx.

Work and Income (2009). Unemployment Benefit: For people who are out of work.

Available from www.workandincome.govt.nz/individuals/a-z-benefits/unemployment-

benefit.html.

A Guide to Unemployment Statistics

Documents

Transcript of A Guide to Unemployment Statistics