Household Labour Force Survey resource

What is the Household Labour Force Survey?

The Household Labour Force Survey (HLFS) is a nationwide, quarterly survey and is the official measure of employment and unemployment in New Zealand. It has been providing the only comprehensive and ongoing picture of the labour force since it began in October 1985. The HLFS measures: the number of employed and unemployed people, the number who are not in the labour force, the hours worked, which occupations and industries people work in, the duration of unemployment, steps people take to find work, steps they take to find more work hours, and the number of people in formal study. These measurements are then cross-tabulated by demographic characteristics, such as age group, gender, locality, and ethnicity.

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How is the data collected?

HLFS data is collected from a sample survey, which is designed to be representative of the country as a whole. (More information on a sample is in the Household Economic Survey learning resource.)There are about 15,000 households in the sample, which is roughly 30,000 people, from both rural and urban localities. Households and household members are interviewed every three months and asked about their activities during a particular week. From the information provided, Statistics New Zealand can estimate the official unemployment rate and other labour market indicators.

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How is the HLFS used?

Perhaps the most high profile use of HLFS data is as an indicator of the overall health of the economy. Many take the unemployment rate as the key indicator. A warning though, labour markets take time to adjust, therefore when the economy is unhealthy it may take a while for that to be seen in the labour market (and in the opposite direction too). For this reason we say that the labour market is a ‘lagged’ indicator.

The HLFS is particularly good for making comparisons of labour force variables across demographic characteristics. For example, you can easily compare the unemployment rates for men and women, and for different ethnic groups. The data is also useful for identifying patterns over time for particular industries, regions, or groups of people. Some also use HLFS data to help model or predict the future direction of the labour market.

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What are the common confusions?

A glossary is published in each quarterly release. However, the definitions of the different statistics can be confusing for the general public. People often equate the terms ‘unemployment rate’ and ‘jobless rate’ – these are two different things. Unemployed persons are those in the working-age population who were without a paid job, available for work and had either actively sought work in the past four weeks ending with the reference week, or had a new job to start within the next four weeks. The jobless are defined as those people who are either officially unemployed, available but not seeking work, or actively seeking work but not available. The jobless rate is an alternative measure of unemployment, though it is not the official unemployment rate.

People sometimes confuse the labour force participation rate (LFPR) with an employment rate. Statistics NZ doesn’t publish an actual ‘employment rate’, but the LFPR is the proportion of the working-age population who are either employed or unemployed.

Another common confusion is the relationship between employment and unemployment. A decrease in employment does not necessarily equate to an increase in unemployment.

The unemployment rate published each three months in the HLFS release is the official unemployment rate for New Zealand. People can confuse this with the quarterly unemployment benefit statistics published by the Ministry of Social Development. There are people on the benefit who would not qualify as unemployed by the HLFS definition. Similarly, there are people who are unemployed in the HLFS definition who are not eligible for the unemployment benefit.

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Statistical calculations

Definitions

Percentages – A percentage is a way of expressing a number as a fraction of 100 (per cent literally means "per hundred"). It is often identified by the symbol ‘%’. For example, 1% = 1/100 and 90% = 90/100.



Percentage points – A percentage point is the actual difference between two percentages or rates, one is subtracted from the other. We use percentage points to measure the differences in rates or percentages over time, for example, the quarterly change in the unemployment rate. This is different to percentage change, which is the change over time as a percentage of the original value.

Example

Percentages

There are two situations where you might use percentages:

1) If you want to calculate what number a given percentage of a larger number is:

Imagine the labour force is 800,000, and 4 percent are unemployed. How many people are unemployed?

800,000 x 4/100
800,000 x 0.04
= 32,000

2) If you have two groups and want to calculate what percentage one is of the other:

65,000 of the 1,000,000 people in the labour force are unemployed. What percentage is this?

65,000 / 1,000,000 x 100
0.065 x 100
= 6.5 percent

Percentage points

1) The unemployment rate in December 2007 was 3.4 percent. It increased to 4.6 percent in December 2008. What is the percentage point change over the period?

4.6 – 3.4 = +1.2 percentage points

2) The labour force participation rate in the September 2008 quarter was 68.7 percent. By the December 2008 quarter it had risen by 0.6 percentage points. What was the labour force participation rate in the December quarter?

68.7 + 0.6 = 69.3 percent

Activities

Calculating percentages and percentage points

Let’s calculate a couple of unemployment rates (percentages) and quarterly changes (percentage points).

The unemployment rate is the percentage of unemployed people in the labour force. Fill in the missing values in the table:

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Further reading

This summary is largely based on information on the Statistics New Zealand website. For more information about the HLFS please follow these links:

Information about the Household Labour Force Survey
Household Labour Force Survey

Answers