Characterising New Zealand’s underutilised workforce: Evidence from the Household Labour Force Survey

This study aims to provide a detailed understanding of the underutilised workforce in New Zealand (NZ). The International Labour Organisation (ILO) considers workers to be underutilised if they are unemployed, time-related underemployed (referred to as underemployed hereinafter) or belong to the potential labour force. The primary data source for this report comes from the Household Labour Force Survey, specifically a period of results from between June 2016 and June 2018, which incorporated new variables and introduced information to identify the underutilised workforce in NZ, in line with ILO definitions. Some key findings from the study include: (1) underutilised workers tend to be significantly younger and female (one third of underemployed were aged 15-24); (2) characteristics linked with being more likely to be underutilised included low educational attainment, ethnic minorities, and large household size; (3) underemployed workers are most likely to be community and personal service workers or labourers and most likely to be found in accommodation and food services or retail trade; (4) the primary reason provided for their underemployment was ‘not enough work available’ (59.5 per cent) while women were four times more likely than men to cite ‘difficulty in finding suitable childcare’ as their reason (4.1 per cent versus 1.1 per cent); and (5) there was some evidence to indicate that underutilisation is a short-term phenomenon, with a 50.4 per cent probability that an underemployed person will be fully utilised in the next quarter they are surveyed, and an 84.8 per cent chance after a year.