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Jobless households in New Zealand: June 2017 quarter

Purpose and summary

Purpose 

Jobless households in New Zealand looks at the number and structure of jobless households in New Zealand, and examines some of the characteristics of the individuals living in these households. Data from the Household Labour Force Survey (HLFS) has been used to produce the analysis in this paper.

Introduction

Unemployment and wider joblessness is often examined at the individual level. However, looking at labour force status at the household level can provide further information to help understand the well-being of households, and of the people living in those households. The impact of joblessness on individuals can often be mitigated by the financial and social support of others, particularly those they share a household with. In contrast, jobless households may have increased reliance on government support, experience financial hardship, and suffer from diminished social networks and other forms of social isolation. 

Children who live in jobless households may be at increased risk of disadvantage and of experiencing poverty, which can significantly affect their current and future well-being. Intergenerational joblessness can also become a risk where there are no role models of employment in the household. However, there are potential positive effects for children living in jobless households where the parent(s) is jobless for reasons of care or study. 

Summary of key points 

In the June 2017 quarter:

  • One in 10 households were jobless.
  • Joblessness was higher in single-adult households, particularly sole-parent households.
  • Jobless household rates were highest in households with either no dependent children or a large number of dependent children (four or more).
  • Women were more likely to live in jobless households than men.
  • While those aged 55–64 have fairly low unemployment rates, they were more likely than other age groups to live in jobless households.
  • Those born in New Zealand were more likely to be living in jobless households.
  • Individuals living in jobless households were more likely to have no or low levels of formal qualifications.
  • People of Māori ethnicity were more likely to live in a jobless household.
  • Disabled people were over-represented in jobless households.

Read One in ten households jobless in June quarter – news story

Information about the data

Who is included when defining household labour force status

For this analysis, adults aged 18–64 and non-dependent children aged 15–17 are included for the purpose of defining household labour force status. These individuals are referred to in this analysis as ‘working-age adults’. This means that households that include individuals aged 65 and over are effectively redefined so as to exclude them (ie a household that has a 63-year-old unemployed adult and a 67-year-old employed adult would be defined as a one working-age adult jobless household).

Only the characteristics of those included for the purpose of defining household labour force status are examined in this analysis.

Household labour force status

Household labour force status is assigned to each household based on the individual labour force status of each of the household’s working-age adults. They can be assigned to one of the following statuses:

  • Employed – all working-age adults were classified as employed (ie working one or more hours per week).
  • Mixed – at least one working-age adult was classified as employed and at least one as not employed.
  • Jobless – all working age-adults were classified as not employed (ie were unemployed or not in the labour force).
  • Unknown – missing labour force status of at least one working-age adult means we are unable to define the household as one of the above statuses.
Households defined as ‘unknown’ (and the individuals living in them) have been removed from this analysis.

Jobless household rate

The jobless household rate is calculated as the proportion of households in a population of interest that are jobless. For example, the number of jobless households with dependent children as a proportion of all households with dependent children.

Data

Unless otherwise stated, we used data from the June 2017 quarter of the HLFS for this analysis. Where we’ve looked at longer time periods, we used June quarter HLFS data to help with comparability and to remove seasonal effects. We’ve used the June 2001 quarter as our starting point to remove any effect of changes in retirement age that occurred before this time. 

Changes in household labour force status over time

In the June 2017 quarter the jobless household rate was 10.6 percent, representing approximately 150,600 households in total. As figure 1 shows, this was the lowest jobless household rate recorded in a June quarter since 2001. The proportion of employed households was 67.4 percent (the highest level recorded in a June quarter) while the proportion of households that had mixed labour force status was 22.0 percent. 

We redeveloped the HLFS questionnaire in the June 2016 quarter (shown as a vertical line in figure 1). This resulted in some level changes in labour force status at the individual level so is likely to have affected the time-series – some caution should be used.

Figure 1

Graph, Household labour force status, June quarters, 2001 to 2017.

In general we can see in figure 1 that the proportion of households defined as employed has increased over time while jobless households have decreased. We can also see that, as with unemployment rates, the jobless household rate increased following the 2008 financial crisis and the recessionary and post-recessionary period that followed. 

Figure 2 shows percentage point changes in household labour force status proportions relative to the June 2007 quarter. This allows us to look more closely at what happened to household labour force status during and following the 2008/09 recession. June 2007 was the last June quarter before the recession, June 2008 was in the midst of recession, and the June 2009 quarter onwards is the post-recession period.

Figure 2

Graph, Change in household labour force status, relative to the June 2007 quarter, June quarters, 2007 to 2017.

Figure 2 shows that the proportion of both jobless and mixed households increased following the recession, while employed households declined when compared with the pre-recession level of the June 2007 quarter. The proportion of employed households has been higher than the June 2007 level since the June 2015 quarter. Jobless households as a proportion of all households has been consistently below the June 2007 level since the June 2014 quarter.

Characteristics of jobless households

This section looks at some of the characteristics of jobless households. Table 1 in the appendix provides more data on the jobless household rate, as well as the percent of jobless households and all households by these characteristics.

Most jobless households are one working-age adult households

About three-quarters of jobless households were one working-age adult households. One-fifth of jobless households were two working-age adult households. 

The total jobless household rate was 10.6 percent in the June 2017 quarter, but it was almost triple this for households with one working-age adult (27.9 percent). Households with two working-age adults and three or more working-age adults have much lower rates (4.4 percent and 2.7 percent, respectively). The higher rate for one working-age adult households is expected as they can only be jobless or employed and can’t be classified as ‘mixed’. This is further illustrated by the fact that one working-age adult households also had the highest employed proportion across household types.

Figure 3

Graph, Jobless household rate by number of working-age adults, June 2017 quarter.

The jobless household rate for one working-age adult households has decreased significantly from 39.4 percent in the June 2001 quarter to the June 2017 quarter level.

The number of working-age adults in a household is an important characteristic to look at in relation to household joblessness. Households with more than one working-age adult are less likely to experience joblessness at the household level as there are more potential adults to engage in employment and, in the case of parents, caring responsibilities. As stated by Singley and Callister, “two-parent households have lower risks of non-employment (and reliance on state income support) than single-parent households because there are two potential income earners and caregivers within the household” (Singley & Callister, 2003).

Jobless household rate highest in single-parent households

Children living in jobless households are potentially disadvantaged or more at risk of disadvantage than children living in households with an employed parent. However, children in these households can also be positively affected as the parent may not be in employment so they can focus on raising and caring for their child. 

Using data from the Household Economic Survey, it was estimated that approximately 16 percent of all children in New Zealand lived in jobless households in 2015 (Ministry of Social Development, 2016).

The jobless household rate is highest in households with one working-age adult and dependent children – 35.0 percent of these households were jobless. In contrast, households with two working-age adults and dependent children had a jobless household rate of only 3.7 percent. Figure 4 shows that both one- and two-adult with dependent children households have similar proportions engaged in employment. The shift in two-adult with dependent children households is away from jobless and into mixed household types, demonstrating the ability for these households to potentially distribute the earning and caring responsibilities.

Figure 4

Graph, Household type by household labour force status, June 2017 quarter.

Jobless household rate highest in households with young dependent children

Flynn and Harris showed that employment and labour force participation rates of mothers are closely related to both the age of their youngest dependent child as well as the number of dependent children. This is particularly the case for sole mothers (Flynn & Harris, 2015). Just under 90 percent of jobless sole-adult households with dependent children were sole-woman households.

Caregiving responsibilities associated with having younger children often make it more difficult or less desirable to engage in paid work. The jobless household rate is higher in households with young dependent children. This then decreases with increasing age of the youngest dependent child.

Figure 5

Jobless household rate of households with dependent children, by age group of youngest dependent child, June 2017 quarter.

The proportion of jobless households with a youngest dependent child aged 0–2 years is higher than for all households. At the other end of the scale the proportion of jobless households with a youngest dependent child aged 14 or older is lower when compared with all households.

Jobless household rate highest for households with four or more dependent children

The jobless household rate is highest for households that have four or more dependent children, followed by those with no dependent children. However, households with four or more dependent children only account for about 2.4 percent of all households and 3.5 percent of all jobless households. The jobless household rate is lowest in households with two dependent children.

Figure 6

Graph, Jobless household rate by number of dependent children, June 2017 quarter.

When looking at the distribution of jobless households for only those with dependent children, the majority of jobless households (as with all households) have one or two dependent children. However, a lower proportion of jobless households have two dependent children and a higher proportion have three or more dependent children when compared with all households.

Figure 7

Graph, Jobless and all households with dependent children by number of dependent children, June 2017 quarter.

Northland has a higher jobless household rate

In the June 2017 quarter, Northland and Taranaki regions had the highest jobless household rates, while Wellington region had the lowest. Northland also had the highest unemployment rate and lowest employment and labour force participation rates for the June 2017 quarter. While the unemployment rate was slightly higher than the national average in Wellington, the employment and labour force participation rates were the highest of all the regions.

Figure 8

Graph, Jobless household rate by region, June 2017 quarter.

Rural areas had a lower jobless household rate than urban areas – 7.6 percent compared with 11.1 percent.

Over half of jobless households not owned by occupants

Jobless households were most likely to be in dwellings that were ‘not owned and not held in a family trust’ by any member of the household. This proportion was notably higher than for employed and mixed households. The jobless household rate was also highest for those living in dwellings not owned and not held in a family trust – 16.5 percent compared with 7.6 percent for those in a dwelling held in a family trust, and 6.9 percent for those in a dwelling owned or partly owned.

Figure 9

Graph, Household labour force status by household tenure, June 2017 quarter.

Characteristics of people in jobless households

This section looks at the characteristics of jobless people living in jobless households. Table 2 in the appendix shows a summary of the characteristics of these individuals. 

For the purpose of this analysis we report:

  • the proportion of people living in jobless households – eg, the number of women in jobless households as a proportion of total working-age adults living in jobless households
  • the proportion of people in a population of interest living in jobless households – eg, the number of women in jobless households as a proportion of total working-age women in all households.
Overall, 7.2 percent of all working-age adults were living in a jobless household in the June 2017 quarter. This proportion has fallen from 12.5 percent in the June 2001 quarter.

More women live in jobless households

Figure 10 shows that 61.4 percent of all working-age adults living in jobless households in the June 2017 quarter were women. As noted earlier, sole-adult households are the most common type of jobless household and women dominate in these households, particularly those with dependent children. Just under three-quarters of all the working-age adults in jobless households with dependent children were women.

Figure 10

Graph, Proportion of individuals in each household labour force status by sex, June 2017 quarter.

Women are also more likely to be living in jobless households than men, with 8.6 percent of all working-age women living in jobless households, compared with 5.7 percent of men. 

Figure 11

Graph, Proportion of men and women in each type of household that are jobless, June 2017 quarter.

More than one-third of all working-age women in sole-adult households with at least one dependent child (37.1 percent) lived in jobless households, compared with 24.4 percent of men in this household type. However, only 5.9 percent of all working-age women lived in this type of household.

Those aged 55–64 most likely to live in a jobless household

Unlike unemployment rates, which tend to be highest in the younger age groups and then decrease with age, individuals living in jobless households tend to be older.

When looking at the distribution of individuals living in jobless households by age group, individuals aged 55–64 represented the largest group. This age group accounted for almost one-third of all working age individuals living in jobless households, but only one-fifth of all individuals. The high rate of joblessness in this older age group could be due to voluntary early retirement, forced redundancy, or living with at least one other person of retirement age (Scutella & Wooden, 2004).

Figure 12

Graph, Proportion of individuals in each household labour force status by age group, June 2017 quarter.

Individuals aged 55–64 were also more likely to be in jobless households, with 11.7 percent of total working-age adults aged 55–64 living in jobless households. This proportion has decreased significantly from the June 2001 quarter (25.4 percent). The proportion of younger people in jobless households (those aged 15–24) has also decreased from a rate of 14 percent in the June 2001 quarter to 7.3 percent in the June 2017 quarter.

Figure 13

Graph, Proportion in jobless households by age group, June 2017 quarter.

People born in New Zealand more likely to be in jobless households

In the June 2017 quarter, people born in New Zealand were more likely to be living in jobless households compared with those not born in New Zealand. 

Figure 14

Graph, Proportion in jobless households by country of birth, June 2017 quarter.

The proportion of individuals born in non-English speaking countries living in jobless households had almost halved, from 12.6 percent in the June 2008 quarter to 6.6 percent in the June 2017 quarter.

While, as expected, the majority of people living in all households were born in New Zealand (68.9 percent), they were still over-represented in jobless households where they account for 74.4 percent of all individuals. 

People in jobless households have low levels of formal qualification

People living in jobless households were more likely to have no or low levels of formal qualifications, compared with those living in employed or mixed households. 29.8 percent of those in jobless households had no formal qualifications, compared with 15 percent of those in mixed households and only 10.2 percent of those in employed households. Only 13.8 percent of individuals in jobless households had a bachelor’s degree or higher qualification, compared with more than one-third of individuals (34.6 percent) in employed households.

Figure 15 shows the proportion of people in each qualification category who were jobless. From this we can see the relatively high proportion of people with no qualifications who lived in jobless households. We can also see that those who had a level 1–3 post-school certificate or lower secondary school qualification had a higher rate of living in jobless households than the total. Those with a bachelor’s degree or higher had a much lower rate of living in jobless households.

Figure 15

Graph, Proportion in jobless households by highest qualification, June 2017 quarter.

Māori are more likely to be living in jobless households

Of the four main ethnic groups looked at (European, Māori, Pacific, and Asian), Māori people were the most likely to be living in jobless households (14.3 percent), followed by Pacific people (8.6 percent), European people (6.2 percent), and Asian people (5.9 percent). 

Figure 16

Graph, Proportion of individuals in each ethnic group by household labour force status, June 2017 quarter.

Higher joblessness among Māori may reflect the fact that they are more likely to be living in sole-parent households. In the June 2017 quarter, 8.6 percent of Māori lived in sole-parent households, compared with Pacific (3.9 percent), European (3.4 percent), and Asian (2.0 percent) people. Māori are also less likely to have educational qualifications – particularly post-school qualifications. 43.4 percent of Māori in jobless households had no qualifications and only 3.1 percent had a bachelor’s degree or higher in the June 2017 quarter. 

Free-time activities are the most common activity of people in jobless households

Figure 17 shows the main activity of jobless individuals living in jobless and mixed households. The HLFS asks about main activity of people who are classified as not in the labour force. To show the complete distribution of the jobless, ‘unemployed’ has been added as a main activity. In the June 2017 quarter, the proportion of jobless individuals who were unemployed was the same for those in mixed and jobless households.

Figure 17

Graph, Main activity of jobless individuals by household labour force status, June 2017 quarter.

The most-common main activity of people in jobless households was free-time activities (18.3 percent). These include activities such as visiting friends, relaxing around the house, reading, and hobbies. However, the main activity for jobless people in mixed households was looking after a child, followed by study or training. The proportion of jobless people in jobless households who gave their main activity as own care due to sickness / injury / disability was double that of jobless people in mixed households.

The median age of those in jobless households was 45 years in the June 2017 quarter, compared with 33 years for jobless people living in mixed households. Main activity of people not in the labour force showed that activity changes with stage of life (Stats NZ, 2016). Those who are younger are more likely to be involved in study or training, and looking after a child. In contrast, reporting of household work, free-time activities, and own care due to sickness / injury, or disability is more common in the older age groups. 

Disabled people are more likely to be living in jobless households

In general, disabled individuals are at a higher risk of living in jobless households. Figure 18 shows that in the June 2017 quarter, 15.1 percent of all individuals living in jobless households were disabled. Of the disabled people living in jobless households, two-thirds were aged 45–64 years. Just under one-third of all disabled people were living in a jobless household.

Figure 18

Graph, Proportion of individuals in each household labour force status who are disabled, June 2017 quarter.

Nearly half of people in jobless households have not worked in more than two years

More jobless people in mixed households had never worked when compared with those living in jobless households. This difference might be associated with the younger age distribution of jobless people in mixed households, where half of the individuals (54.2 percent) were aged 15–34. 

Nearly half of the individuals living in jobless households (48.6 percent) had not worked in more than two years, compared with just over one-third of jobless people in mixed households (34.7 percent).

Figure 19

Graph, Time since jobless individuals last worked by household labour force status, June 2017 quarter.

Individuals in jobless households are more reliant on Work and Income support

People living in jobless households were more reliant on income from government transfers than those in other household types. This support includes jobseeker support, disability allowance, supported living payment, sole parent support, accommodation supplement, and other supplementary benefits and allowances. 

Figure 20

Graph, Median weekly income of individuals from government transfers by household labour force status, June 2017 quarter.

In the year to the June 2017 quarter, the overall median weekly earnings from government transfers (for those that received it) was highest for individuals in jobless households at $324.3. The distribution across the different income sources shows that individuals in jobless households received a median income of $325 from Work and Income, followed by New Zealand Superannuation ($318.6), student allowances ($201), and Inland Revenue ($157).

While the benefits of paid employment to an individual and household extend beyond the earnings generated by that employment, income is obviously an important factor in participation in paid employment. Those in low income situations may be less able to afford the basics, be less resilient to one-off shocks, and less able to save for the future. 

Conclusion

The number of jobless households and the number of people living in jobless households has decreased in New Zealand over time. In the June 2017 quarter, most jobless households are one working-age adult households without dependent children. However, sole-parent households with dependent children had the highest jobless household rate. Of those with dependent children, households with younger dependent children or a large number of children were more likely to be jobless.

Women were more likely than men to live in a jobless household and were over-represented in jobless households with dependent children. Those aged 55–64 represented the largest group of individuals in jobless households – accounting for nearly one-third of all people living in these households. Those born in New Zealand, those with low or no level of formal qualification, people of Māori ethnicity, and disabled people were also more likely to be in jobless households.

This paper has examined the characteristics of jobless households and of the people living in them in New Zealand. Further analysis could use the HLFS and other data sources to understand more about the outcomes or implications of joblessness at a household level, look into the persistence of household joblessness and transitions into and out of this household state, and take a broader look at households that have low work intensity or in general can be considered to be work poor, among many other possibilities. 

References

Flynn, S, & Harris, M (2015). Mothers in the New Zealand workforce. Retrieved from www.stats.govt.nz. 

Ministry of Social Development (2016). Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2015. Retrieved from www.msd.govt.nz.

Scutella, R, & Wooden, M (2004). Jobless households in Australia: Incidence, characteristics and consequences. (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne). Retrieved 10 November 2016 from http://library.bsl.org.au. 

Singley, SG, & Callister, P (2003). Work poor or working poor? A comparative perspective on New Zealand’s jobless households. Social Policy Journal of New Zealand, 20, 134–155.

Stats NZ (2016). Main activity of people not in the labour force. Retrieved from www.stats.govt.nz.

Appendixes

For the data in this report in Excel format, see the 'Available files' box on this web page.

Read One in ten households jobless in June quarter – news story

Citation

Stats NZ (2017). Jobless households in New Zealand: June 2017 quarter. Retrieved from www.stats.govt.nz.

ISBN 978-1-98-852829-8 (online)
Published 28 September 2017

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