National labour force projections: 2024(base)–2078
National labour force projections indicate the future size and age-sex structure of the labour force usually living in New Zealand based on assumptions about labour force participation and average hours worked, and current policy settings.
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National labour force projections: 2024(base)–2078
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Key facts
National labour force projections indicate the future size and age-sex structure of the labour force living in Aotearoa New Zealand. All data cited here relate to June years. Data before 2024 are sourced from the Household Labour Force Survey (HLFS, year ended June, unless otherwise stated).
The projections indicate that:
- New Zealand's labour force will continue to grow, but the growth rate will slow in the long-term
- the labour force will age, reflecting increasing labour force participation rates among males and females aged 50 years and over (50+), and the general ageing of the population.
The projections indicate a 90 percent chance that:
- the labour force (3.1 million in 2024) will increase to between 3.5 and 4.4 million in 2051, and to between 3.7 and 5.3 million in 2078
- the labour force aged 65 years and over (65+, 220,000 in 2024) will increase to between 250,000 and 460,000 in 2051, and to between 280,000 and 730,000 in 2078
- the proportion of the labour force that is aged 65+ (7 percent in 2024) will increase to between 7 and 11 percent in 2051, and to between 7 and 15 percent in 2078
- the proportion of the population aged 15 years and over (15+) in the labour force (71 percent in 2024) will be between 64 and 75 percent in 2051, and between 57 and 73 percent in 2078
- the proportion of the population aged 65+ in the labour force (25 percent in 2024) will be between 16 and 31 percent in 2051, and between 13 and 33 percent in 2078
- the ratio of those not in the labour force across all ages to those who are in the labour force (72 per 100 in 2024) will be between 54 and 84 per 100 in 2051, and between 55 and 103 per 100 in 2078
- the average number of hours that people in the labour force are working or available for work (37 hours per week in 2024) will be between 34 and 41 hours per week in 2051, and between 32 and 42 hours per week in 2078.
Contents
- Important advice for using projections
- Slower labour force growth
- Migration the main driver of labour force growth
- Ageing labour force
- Growing share of the labour force aged 65+
- Declining share of 65+ in the labour force
- Fall from peak labour force participation
- Upward pressure on economic dependency ratio
- Males working fewer hours on average, females working more
- Projection assumptions
- Method
- Accuracy of projections
- Differences between HLFS, Census, and projections
- More data
- Definitions and metadata
Important advice for using projections
National labour force projections give an indication of the future supply of people, usually living in New Zealand, who are available for work. The projections cover a range of possible outcomes based on different combinations of assumptions about the population (fertility, mortality, and migration) from the National population projections: 2024(base)–2078 and assumptions about labour force participation.
The projections also indicate the extent to which people are available for work, by applying assumptions on the average number of hours worked per week to the labour force projections.
These projections are neither predictions nor forecasts. The projections are designed to meet both short-term and long-term planning needs but are not designed to be exact forecasts or to project specific annual variation. They should be used as an indication of the overall trend, rather than as exact forecasts. The projections are updated every 2 to 3 years to maintain their relevance and usefulness by incorporating new information about demographic and labour market trends, policy settings, and developments in methods.
The following results highlight the main trends from the projections. Historical data up to 2023 are sourced from labour market statistics (year ended June). For more detail on these latest projections go to Aotearoa Data Explorer.
Labour force definition
The labour force includes people aged 15 years and over who:
- regularly work for one or more hours per week for financial gain
- work without pay in a family business
- are unemployed and actively seeking part-time or full-time work.
People not in the labour force include:
- people under 15 years of age
- students who do not work for pay
- people who are unemployed and not actively seeking work
- people who work without pay (but not in a family business)
- people who have retired.
Reference period
This release contains 2024-base projections of the labour force usually living in New Zealand. These supersede National labour force projections: 2020(base)–2073 released in June 2021. The new projections have the provisional estimated resident population at 30 June 2024 as a base and cover the period 2025 to 2078 at one-year intervals. Email info@stats.govt.nz for extended projections beyond 2078.
Which projection should I use?
Users can make their own judgement as to which projections are most suitable for their purposes. At the time of release, the median projection (50th percentile) indicates an estimated 50 percent chance that the actual value will be lower and a 50 percent chance that the actual value will be higher than this percentile.
The median projection is not an assumed trajectory, but the median of the projection simulations, which vary every year around that median.
Other percentiles indicate the distribution of values (such as projection results or assumptions). For example, the 25th percentile indicates an estimated 25 percent chance that the actual value will be lower and a 75 percent chance that the actual value will be higher than this percentile. Shading in graphs indicates the chance that actual values will fall within a certain range. Different shading is used to distinguish different ranges.
Slower labour force growth
The total labour force is projected to rise from an estimated 3.07 million people at 30 June 2024 to 3.97 million in 2051 and to 4.40 million in 2078 under the median projection. There is uncertainty, however, in both the future population (size and structure) and future labour force participation rates. There is an estimated 90 percent chance that the labour force will be between 3.52 and 4.41 million in 2051, and between 3.66 and 5.26 million in 2078.
The projections indicate that:
- the male labour force will grow from 1.62 million in 2024 to between 1.83 and 2.32 million in 2051 and between 1.92 and 2.81 million in 2078
- the female labour force will grow from 1.45 million in 2024 to between 1.69 and 2.09 million in 2051 and between 1.73 and 2.46 million in 2078.
Labour force growth is likely to slow because of changes to the population age structure. For example, the projections indicate increasing proportions of people aged 65+ in the population, who are less likely to participate in the labour force than people at younger ages. The projections indicate that new and returning entrants into the labour force are likely to exceed the number of people leaving the labour force, but by a narrowing margin.
Migration the main driver of labour force growth
Changes in the labour force can be broken down into three key factors:
- net migration
- changes in labour force participation rates (LFPRs)
- changes in age structure (including that of migrants once part of the resident population).
Net migration – the difference between migrant arrivals and migrant departures – is the main contributor to projected labour force growth. In the median projection, the direct contribution of net migration is an average of 27,600 a year over the projection period. Male net migration (average of 14,000 a year) is a very slightly larger contributor than female net migration (average of 13,600 a year).
Changes in LFPRs makes a much smaller contribution to projected labour force growth. In the median projection, the direct contribution of changing LFPRs is an average of 2,500 a year over the projection period. Increasing female LFPRs contribute four-fifths of this component, and increasing male LFPRs one-fifth.
Changes in age structure – essentially the movement of birth cohorts through the age structure – initially make a positive contribution to labour force growth. However, in the median projection the contribution is negative from 2045, and an average contribution of -4,800 a year over the projection period. This largely reflects the faster growth of the population in age groups where LFPRs are lower. Over the entire projection period, the net loss of females from the labour force through ageing and cohort effects is about four times the net loss of males.
Ageing labour force
The labour force is projected to age further. The median age of New Zealand's labour force increased from 35 years in 1988 to 43 years in 2013. It subsequently eased to 41 years in 2024 following sustained net migration gains. The median projection indicates that half of the labour force will be over 43 years by around 2040, and the median age will be over 45 years by the late 2060s.
The increase in the historical and projected median age reflects increasing LFPRs among males and females aged 50+ years, and the general ageing of the population, accentuated by the large number of people born between 1950 and the early 1970s moving into older working ages.
Declining share of 65+ in the labour force
Although more people aged 65+ are remaining in or entering the labour force, the overall 65+ LFPR is projected to decline over time.
In 1991, 6 percent of those aged 65+ were in the labour force. Labour force participation among those aged 65+ increased strongly from the late 1990s, partly driven by the progressive raising of the eligibility for government superannuation from age 60 in 1991 to 65 in 2001. By 2024, the 65+ LFPR was 25 percent – about 30 percent among males and 20 percent among females.
The overall 65+ LFPR is unlikely to rise much further, despite assumptions of further increases in LFPR at individual ages (see Labour force participation rates). Increasing numbers of people aged 80+ who have very low LFPRs, relative to those aged 65 to 79 who have higher LFPRs, will tend to push the overall 65+ LFPR downwards.
Fall from peak labour force participation
The projections indicate that New Zealand is currently near peak labour force participation, and the total (aggregate) LFPR is likely to gradually fall over the coming decades. In 2024, 71 percent of adults (aged 15+ years) were in the labour force, down slightly from 72 percent in 2023. The median projection indicates a gradual drop to 70 percent in 2051 followed by a more rapid drop to 65 percent in 2078.
This drop is despite the assumptions of static or increasing LFPRs at most ages. This apparent paradox is caused by the changing age structure of the population, which sees a growing number and proportion of the population at the oldest ages, where LFPRs are at their lowest.
Among males aged 15+, the proportion in the labour force has fluctuated between 73 and 77 percent since the late 1980s. Under the median projection this proportion drops gradually to 73 percent in 2051, and then drops faster to 69 percent in 2078.
Among females aged 15+, the proportion in the labour force climbed gradually from 53 percent in the late 1980s to 67 percent in 2024. Under the median projection this proportion remains around 67 percent until the mid-2040s, before declining to 62 percent in 2078.
Upward pressure on economic dependency ratio
At ages 17 to 65 years, most males and females were in the labour force in 2024. For the total population, more people were in the labour force in 2024 than not. The ratio of those not in the labour force to those who are (the economic dependency ratio) was 72 per 100 in 2024. The median projection indicates that this ratio may drop to 67 per 100 in the mid-2040s before gradually increasing to 76 per 100 people in 2078. However, there is significant uncertainty in the future ratio.
During the 1950s, 1960s, and 1970s, New Zealand’s economic dependency ratio was above 100 per 100, meaning there were more people not in the labour force than in it. In these decades the non-labour force was dominated by children under 15 years.
In the mid-1980s the ratio dipped below 100 per 100, but was above that level through the 1990s, before its most recent downwards trend. These changes reflected demographic changes, especially in age composition, combined with changes in the total LFPR.
For more information on population dependency ratios see National population projections: 2024(base)–2078.
Males working fewer hours on average, females working more
The average number of hours that people in the labour force are usually working (or available for work) dropped slightly from about 39 hours per week in the late 1980s to 37 hours per week in 2024. The projections indicate that this average is likely to remain around that level, assuming recent age-and-sex-specific trends continue.
Among males in the labour force, average hours worked dropped from 44 hours per week in the late 1980s to 40 hours per week in 2024. This is projected to drop further to around 39 hours per week beyond the mid-2030s under the median projection.
Among females in the labour force, average hours worked increased from 32 hours per week in the late 1980s to 33 hours per week in 2024. This is projected to increase further to 36 hours per week beyond the mid-2040s under the median projection.
Projection assumptions
Projection assumptions are formulated after analysing short-term and long-term trends, recent trends and patterns observed in other countries, and government policy.
Future labour force trends are uncertain and depend on a range of factors:
- changes in population composition and different trends in population subgroups (including ethnic groups)
- trends in fertility including the timing and number of births
- trends in the patterns of education (especially tertiary education) and work, including the timing, duration, and proportion of time dedicated to these activities
- trends in how people balance paid work, unpaid work, family, and leisure activities at different ages
- changing macro-level conditions (for example, global and national economic conditions, government policies) that affect the labour market and demand for labour
- trends in health and mortality, affecting wellbeing and life expectancy, especially at ages above 50 years
- changes in financial considerations, including eligibility for government superannuation, especially at ages above 60.
Main changes since the previous 2020-base projections
Deriving the projections involved a review of all projection assumptions. The following are the main changes from the previous 2020-base projections.
Population projections
For the main changes in the base population, fertility, mortality, and migration assumptions see National population projections: 2024(base)–2078.
Labour force participation rates (LFPRs)
An increase in female LFPRs so that the median projection average working life by age 80 years is 46.1 years in 2078, compared with 43.5 years in the 2020-base projections.
Average hours worked per week (AHW)
Increases in the female AHW and decreases in the male AHW, especially at ages 30 to 59 years, with a median female AHW of 35.6 hours per week in 2078, compared with 33.5 hours per week in the 2020-base projections. The median male AHW is 38.8 hours per week in 2078, compared with 40.9 hours per week in the 2020-base projections.
Population projections
These labour force projections are based on the population projection assumptions summarised in National population projections: 2024(base)–2078.
Labour force participation rates
Labour force participation rates (LFPRs) measure the proportion of the population in the labour force, regardless of how many hours are worked per week, but consistent with the labour force definition. LFPRs differ significantly across age for both males and females, so LFPR assumptions are formulated by single-year of age for males and females separately.
The median LFPR assumptions between 2024 and 2078 reflect recent trends:
- increases in LFPRs for males aged 51+ and females aged 20+, especially for males aged 60 to 76 and females aged 24 to 77
- increases in LFPRs at older ages partly reflect increased flexibility in the age of retirement (with no compulsory age of retirement), changing attitudes to retirement, increasing life expectancy and wellbeing at older ages, and financial considerations (for example, to fund longer life spans)
- increases in LFPRs for females at younger ages partly reflecting declines in fertility rates and increases in childlessness.
The median assumption is not an assumed trajectory, but the median of the LFPR simulations that vary every year around that median.
For males and females separately, age-specific LFPRs can be summarised as a single measure by the average working life (AWL), which is the number of years a person would spend in the labour force if they experienced the age-specific LFPRs of a given year throughout their life. The AWL excludes the effect of mortality, so is often calculated across specific ages (for example, 15 to 79) to avoid assuming everyone lives to 100.
Simulations of AWL are produced using a simple random walk with drift model. Random errors are sampled from a normal distribution with a mean of zero and a standard deviation of 0.512 for males and 0.384 for females. The standard deviation is derived by fitting an autoregressive integrated moving average or ARIMA(0,1,0) model to annual AWL for 1986 to 2024 June years. The drift function shifts the median of the AWL simulations to follow the assumed median AWL. Median age-specific LFPRs are scaled to sum to the simulated AWL.
Average hours worked per week
Average hours worked (AHW) is the average usual hours worked per week by people in the labour force. It measures the extent to which the labour force is available for work. People in the labour force who are not working are assumed to be available for work to the same extent as those working.
As with LFPRs, AHW differs significantly across age for both males and females, so AHW assumptions are formulated by single-year of age for males and females separately.
The median AHW assumptions between 2024 and 2078 reflect recent trends:
- small increases in AHW for females aged 21 to 73 years, with the largest increases at ages 28 to 51, partly reflecting declines in fertility rates and increases in childlessness
- small decreases in AHW for males aged 21 to 68, with the largest decreases at ages 33 to 46, partly offsetting the female increases at ages where shared childrearing is occurring.
The median assumption is not an assumed trajectory, but the median of the AHW simulations that vary every year around that median.
For males and females separately, age-specific AHW can be summarised as a single measure by the total hours worked (THW), which is the number of hours a person in the labour force would work (or be available for work) if they experienced the age-specific AHW of a given year throughout their life. The THW excludes the effect of mortality, so is often calculated across specific ages (for example, 15 to 79) to avoid assuming everyone lives to age 100.
Simulations of THW are produced using a simple random walk with drift model. Random errors are sampled from a normal distribution with a mean of zero and a standard deviation of 28.5 for males and 35.7 for females. The standard deviation is derived by fitting an autoregressive integrated moving average or ARIMA(0,1,0) model to annual THW for 1986 to 2024 June years. The drift function shifts the median of the THW simulations to follow the assumed median THW. Median age-specific AHW are scaled to sum to the simulated THW.
Method
The 'cohort component' method has been used to derive the labour force projections. Using this method, population projections are first derived as described in National population projections: 2024(base)–2078. The assumed LFPRs are then applied to the population projections, by age-sex, to give labour force projections.
The assumed average usual hours worked per week are then applied to the labour force projections, by age-sex, to give projections of total hours worked (THW). People in the labour force who are not working are assumed to be available for work to the same extent as those who are working. THW projections are then divided by the labour force projections to give projections of average hours worked.
Accuracy of projections
The accuracy of these projections is unknown at the time of release. While the assumptions are formulated from an assessment of short-term and long-term demographic and labour market trends, there is no certainty that any of the assumptions will be realised. The projections do not take into account non-demographic factors (for example, war, catastrophes, or major government and business decisions) that may invalidate the projections.
See Evaluation of the accuracy of Stats NZ population estimates and projections, 1996–2018 for an evaluation of previous Stats NZ national and subnational population estimates and projections, although labour force projections are not specifically evaluated in that report.
Differences between HLFS, Census, and projections
Labour force projection assumptions are formulated from analysis of data from the Household Labour Force Survey (HLFS), supplemented by data from the Census of Population and Dwellings. Although the same definition of labour force is used in the projections as in the HLFS and census, some important differences exist:
- The HLFS provides the official measure of the labour force using an interviewer-administered survey of about 15,000 households and 30,000 people each quarter. By comparison, the census provides a snapshot of the labour force every five years.
- The HLFS measures labour force status over each quarter, while the census question refers to labour force status in the week before the census date.
- Unlike the HLFS, the census is not subject to sample error (although both data sources may contain non-sampling errors). As a result, the census can provide information at a more detailed demographic level (for example, by single year of age) than the HLFS.
- Non-response in the HLFS is minimised using best survey practices. The census is self-administered, so higher rates of item non-response occur. In the 2023 Census, labour force status non-response was filled in using statistical imputation (Work and labour force status - 2023 Census: Information by concept – Stats NZ DataInfo+).
- The HLFS generally excludes people in the armed forces and non-private dwellings (for example, retirement homes, hospitals, prisons), while the census includes everyone who is in New Zealand on census night.
The base estimates for the NLFP are a working-age (15+) population of 4.313 million and a labour force of 3.071 million from the (provisional) ERP at 30 June 2024. By comparison, HLFS estimates for the June 2024 quarter are a (provisional) working-age (15+) population of 4.301 million and a labour force of 3.066 million. The respective differences of 13,000 and 5,000 – or less than 0.3 percent – reflect a combination of factors:
- The estimates have been rebased by incorporating results from the 2023 Census of Population and Dwellings and the 2023 Post-enumeration Survey (a sample survey to measure census coverage). By comparison, all HLFS estimates presented in this release are 2018-base. Rebased HLFS estimates using the 2023-base estimated resident population will be published on 2 July 2025.
- The estimates are ‘as at’ 30 June while HLFS estimates are for the quarter ended 30 June.
- HLFS estimates have sample error, reflecting they are based on a sample of households.
- HLFS excludes people in the armed forces and in non-private dwellings.
- There may be some differences in how migrants are included in, or excluded from, the respective estimates depending on how they self-identify in the 2023 Census and HLFS.
Text alternatives
Text alternative for New Zealand labour force 1988–2078
The fan chart shows the size of the New Zealand labour force from 1988 to 2078. The New Zealand labour force is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the size of the New Zealand labour force will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that the size of the New Zealand labour force will fall within the light and dark shaded areas.
Text alternative for Median age of the labour force, 1988–2078
The fan chart shows the median age of the labour force from 1988 to 2078. Half the labour force is younger, and half older, than the median age. Median age is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that median age will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that median age will fall within the light and dark shaded areas.
Text alternative for Labour force aged 65+, 1988–2078
The fan chart shows the size of the labour force aged 65 years and over from 1988 to 2078. The labour force aged 65+ is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the size of the labour force aged 65+ will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that the size of the labour force aged 65+ will fall within the light and dark shaded areas.
Text alternative for 65+ labour force participation rate, 1988–2078
The fan chart shows the 65 years and over labour force participation rate from 1988 to 2078. The 65+ labour force participation rate is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the 65+ labour force participation rate will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that 65+ labour force participation rate will fall within the light and dark shaded areas.
Text alternative for Total labour force participation rate, 1988–2078
The fan chart shows the total labour force participation rate from 1988 to 2078. The total labour force participation rate is the percentage of the population aged 15+ in the labour force. The total labour force participation rate is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the total labour force participation rate will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that the total labour force participation rate will fall within the light and dark shaded areas.
Text alternative for Economic dependency ratio, 1988–2078
The fan chart shows the economic dependency ratio from 1988 to 2078. The economic dependency ratio is the number of people not in the labour force per 100 people in the labour force. The economic dependency ratio is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the economic dependency ratio will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that the economic dependency ratio will fall within the light and dark shaded areas.
Text alternative for Projected population by labour force status, age, and sex, median projection (50th percentile), 2024, 2051, and 2078
The three population pyramids show the projected population by labour force status, age, and sex at 30 June 2024, 2051, and 2078, according to the median (50th percentile) projection. The left side of each pyramid represents the male population and the right side represents the female population. For each pyramid, the dark shaded area represents the population in the labour force, and the lighter shaded area represents the population not in the labour force.
Text alternative for Male average hours worked (or available for work), 1988–2078
The fan chart shows the male average hours worked (or available for work), from 1988 to 2078. This is the average usual number of hours worked (or available to work) per week by males in the labour force. The average hours worked is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the male average hours worked (or available to work) will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that the male average hours worked (or available to work) will fall within the light and dark shaded areas.
Text alternative for Female average hours worked (or available for work), 1988–2078
The fan chart shows the female average hours worked (or available for work), from 1988 to 2078. This is the average usual number of hours worked (or available to work) per week by females in the labour force. The average hours worked is estimated from 1988 to 2024 and projected from 2025 to 2078. A black line represents the median (50th percentile). The dark shaded area represents the 50 percent range between the 25th and 75th percentiles. There is an estimated 50 percent chance that the female average hours worked (or available to work) will fall within this dark shaded area. The light shaded area below and above the dark shaded area represents the range between the 5th and 25th percentiles, and between the 75th and 95th percentiles. There is an estimated 90 percent chance that the female average hours worked (or available to work) will fall within the light and dark shaded areas.
More data
Use Aotearoa Data Explorer to access detailed national labour force projections. The following links will take you to the two specific tables:
Definitions and metadata
National labour force projections – DataInfo+ provides general information about methods and assumptions.
Household labour force survey concepts – Datainfo+ provides definitions of terms relating to the labour force used in this release.
Population concepts – Datainfo+ provides definitions of terms relating to population used in this release.
Projection method concepts – Datainfo+ provides definitions of terms relating to projections used in this release.
National population projections – DataInfo+ provides general information about national population projections.
Household Labour Force Survey – DataInfo+ gives general methodology used to produce Household Labour Force Survey statistics, and related metadata.
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Next related release
National ethnic population projections: 2023(base)–2048 will be released on 11 September 2025.
