National Labour Force Projections

Series

Title

^en-NZ

Rights

Statistics New Zealand

^en-NZ

Abstract

National Labour Force Projections provide projected labour force in New Zealand, based on different combinations of fertility, mortality, migration and labour force participation rates assumptions. Demographic projections provide an indication of future trends in the size and composition of the population, labour force, families and households. The projections are used for community, business and government planning and policy-making in areas such as health, education, superannuation and transport. The projections are typically updated every two to three years.

^en-NZ

Purpose

The labour force projections indicate the future supply of people, usually living in New Zealand, available for work. However, they do not indicate the extent to which people are available (eg number of hours per week). The labour force comprises people aged 15 years and over who regularly work for one or more hours per week for financial gain, or work without pay in a family business, or are unemployed and actively seeking part-time or full-time work. The Labour Force Participation Rate (LFPR) is defined as the proportion of the population in the labour force. These definitions are used in the Household Labour Force Survey (HLFS) and the Census of Population and Dwellings, and conform closely to the international standard definitions specified by the International Labour Organization.

The projections are neither predictions nor forecasts. They provide an indication of possible future changes in the size and composition of the labour force . While the projection assumptions are formulated from an assessment of short-term and long-term demographic trends, there is no certainty that any of the assumptions will be realised.

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Universe

National Labour Force Projections ^en-NZ

Significant events impacting this study series

1991 Census

Labour force question changed so that the census labour force will relate more closely to the definition used in the Household Labour Force Survey (HLFS).

1996

Population concept for all demographic estimates, projections and indices changed from 'de facto' to 'resident'. Population estimates based on the de facto population concept (the estimated de facto population) include visitors from overseas, but made no adjustments for net census undercount or residents temporarily overseas. Population estimates based on the resident population concept (the estimated resident population) include adjustments for net census undercount and residents temporarily overseas, but exclude overseas visitors.

The reference date for projections is shifted from 31 March to 30 June.

2012

For the first time, Statistics NZ applied a stochastic (probabilistic) approach to producing national labour force projections. Stochastic labour force projections provide a means of quantifying demographic uncertainty, although it is important to note that estimates of uncertainty are themselves uncertain. By modelling uncertainty in the projection assumptions and deriving simulations, estimates of probability and uncertainty are available for each projection result. No simulation is more likely, or more unlikely, than any other. However, the simulations provide a probability distribution which can be summarised using percentiles, with the 50th percentile equal to the median.

Usage and limitations of the data

Nature of Projections

These projections are not predictions. The projections should be used as an indication of the overall trend, rather than as exact forecasts. The projections are updated every 2–3 years to maintain their relevance and usefulness, by incorporating new information about demographic trends and developments in methods.

Demographic 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. Demographic projections are based on assumptions about future fertility, mortality, migration, inter-ethnic mobility, living arrangement type and labour force participation patterns of the population. Although the assumptions are carefully formulated to represent future trends, they are subject to uncertainty. Therefore, the projections should be used as guidelines and an indication of the overall trend, rather than as exact forecasts.

The projections do not take into account non-demographic factors (eg war, catastrophes, major government and business decisions, changes to the ethnic classification) which may invalidate the projections. Demographic trends are monitored regularly, and when it is necessary, the projections are revised to reflect new trends and to maintain their relevance and usefulness.

Demographic projections should not be confused with economic forecasts. Changes in the number of people, families and households do not necessarily relate to the social and economic well-being of an area. The number of people, families and households may change independently of local economic factors.

National Labour Force: 2006-base to 2061 (August 2012 update)

Base population

The base for the latest labour force projections remains 2006, even though 2011-base national population projections are used to produce them. This is because the labour force projections draw on labour force participation rates (LFPRs) by single-year of age and sex from the Census of Population and Dwellings. Hence, 2006 is the latest census data available, and 2006 is the latest available 'estimate' of the labour force by single-year of age.

Stochastic (probabilistic) approach

For the first time, Statistics NZ applied a stochastic (probabilistic) approach to producing labour force projections. Stochastic labour force projections provide a means of quantifying uncertainty, although it is important to note that the estimates of uncertainty are themselves uncertain. By modelling uncertainty in the projection assumptions and deriving simulations, estimates of probability and uncertainty are available for each projection result. Each simulation path can be considered as likely, or as unlikely, as any other. However, the simulations provide a probability distribution which can be summarised using percentiles, with the 50th percentile equal to the median.

For each assumption, the median is equivalent to the 'medium' assumption used in previous deterministic projections. Similarly, the median stochastic projection is equivalent to the deterministic projection that combined the medium fertility, medium mortality, medium migration, and medium labour force participation assumptions in previous projections (ie series 5M in the 2006-base (May 2010 update) projections). More information about stochastic projections is available in the Statistics NZ working paper Experimental stochastic population projections for New Zealand: 2009(base)–2111.

At the time of release, the 50th percentile (or median) indicates an estimated 50 percent probability that the actual result will be lower, and a 50 percent probability that the actual result will be higher, than this percentile. The median projection assumes:

fertility – the total fertility rate decreases to 1.9 births per woman in 2036 and beyond
mortality – life expectancy at birth increases to 88.1 years for males and 90.5 years for females in 2061
migration – a long-run annual net migration gain of 12,000 people from 2015.

Five 'what if' scenarios have been produced to illustrate the effect of different specific levels of fertility, mortality, and migration assumptions:

Very high fertility: Assumes a total fertility rate of 2.5 births per woman in the long term, period life expectancy at birth reaching 88.1 years for males and 90.5 years for females in 2061, and annual net migration of 12,000 in the long term.
Very low mortality: Assumes a total fertility rate of 1.9 births per woman in the long term, period life expectancy at birth reaching 95.0 years for both males and females in 2061, and annual net migration of 12,000 in the long term.
No migration: Assumes a total fertility rate of 1.9 births per woman in the long term, period life expectancy at birth reaching 88.1 years for males and 90.5 years for females in 2061, and no external migration from 2012 onwards (ie a 'closed' population).
Cyclic migration: Assumes a total fertility rate of 1.9 births per woman in the long term, period life expectancy at birth in 2061 reaching 88.1 years for males and 90.5 years for females in 2061, and annual net migration fluctuates between -10,000 and 30,000 over a 10-year cycle, with an average of 12,000.
Very high migration: Assumes a total fertility rate of 1.9 births per woman in the long term, period life expectancy at birth reaching 2061 of 88.1 years for males and 90.5 years for females in 2061, and annual net migration of 25,000.

Main users of the data

Statistics New Zealand, Ministry of Health, Government Planners/Local Body Planners, Ministry of Education, Consultants, Private Businesses

Frequency

11 Other