Labour Underutilisation in New Zealand

Abstract

The purpose of this paper is to introduce a preliminary measure of labour underutilisation in New Zealand using data from the Household Labour Force Survey (HLFS). Underutilisation measures add value to the suite of labour market indicators already available from the HLFS. In particular, the underutilisation rate complements the unemployment rate by providing a broader picture of unmet demand for paid employment in New Zealand. The concept of underutilisation and the necessity to measure underutilisation is based on recommendations of an International Labour Organization (ILO) Working Group on Underutilisation made in 2008. The Working Group recommended that ‘... the statistical community should devote serious efforts to introduce, at a par with unemployment, a supplementary concept which measures the employment problem as experienced by individual workers.’ The development of underutilisation measures is also important to mirror changes in increasingly transitional labour markets and to enable analysis and evaluation of these changes.