National Labour Force Projections

The cohort component method was used to derive the population projections. By this method, the base population is projected forward by adding new birth cohorts and calculating the effects of deaths and migration within each age-sex group according to specified mortality and migration assumptions. New birth cohorts are generated by applying specified fertility assumptions to the female population of childbearing age. The labour force projections were subsequently derived by multiplying the projected population by the assumed labour force participation rates, by single year of age and sex.

Which projection should I use?

The projections are summarised by percentiles, which indicate the probability distribution for any projected characteristic. Users can make their own judgement as to which projections are most suitable for their purposes. At the time of release, the 50th percentile (or median) indicates an estimated 50 percent chance that the actual result will be lower, and a 50 percent chance that the actual result will be higher, than this percentile. The 25th percentile indicates an estimated 25 percent chance that the actual result will be lower, and a 75 percent chance that the actual result will be higher, than this percentile. It is important to note, however, that the estimates of uncertainty are themselves uncertain.

Population

The 'cohort component' method was used to derive the population projections. Using this method, the base population is projected forward by calculating the effect of deaths and migration within each age-sex group (or cohort) according to the specified mortality and migration assumptions. New birth cohorts are added to the population by applying the specified fertility assumptions to the female population of childbearing age.

The stochastic approach involves creating 2,000 simulations for the base population, births, deaths, and net migration, and then combining these using the cohort component method.

Labour force

The labour force projections are derived by multiplying the projected population by the assumed labour force participation rates, by single year of age and sex. Stochastic labour force projections are derived by applying the 2,000 simulations of labour force participation rates to the 2,000 simulations of the population.

The labour force by total hours workable projections are derived by multiplying the projected labour force by the assumed average hours workable, by single year of age and sex. Stochastic labour force by total hours workable projections are derived by applying the 2,000 simulations of average hours workable to the 2,000 simulations of the labour force.

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.

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. These projections are based on assumptions about future fertility, mortality, and migration patterns of the population combined with assumptions about future labour force participation and hours worked. While the 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.

The projections do not take into account non-demographic factors (eg war, catastrophes, major government and business decisions) which may invalidate the projections.

Accuracy

The accuracy of these projections is unknown at the time of release. An evaluation of previous national and subnational population projections over the period 1991–2013 is available in How accurate are population estimates and projections? An evaluation of Statistics New Zealand population estimates and projections, 1991–2013.

Confidentiality

Data is combined from many sources to produce labour force projections. Therefore, it is not possible to identify individuals in our published statistics. The published statistics are also aggregated (eg to larger geographical areas), while data is also rounded to avoid conveying spurious levels of precision.