Labour supply forecasting by age, gender and qualification

New Zealand
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This report presents forecasts to 2015 for labour supply, working age population and labour force participation rates. The report describes the methodology and the conceptual framework for the forecasting process. These are designed to enable annual updates.

The forecast methodology is new, because: (i) it has a high level of detail comprising 86 combinations of age, gender and qualification and (ii) it accounts for the qualification profile of the labour force, as well as age and gender profiles. The qualification dimension is important since qualifications of the labour force influence the proportion of people who participate in the labour force and their productivity. These, together with the level of working age population, strongly influence economic growth.

Key points

Labour supply is forecast to increase by 109,100 from 2012 to 2015. The increase is underpinned by:

  • increases in the working age population for persons with a “school and level 1-3” or higher qualification
  • rising participation rates of older persons and females
  • increasing 50+ age group numbers due to an ageing cohort of baby boomers
  • females constituting about two-thirds of the increase in labour supply.

Females play an important role in rises in working age population, and their forecast rise is underpinned by rises in “school and level 1-3” qualified persons.

Participation rate changes have less impact on overall labour supply. The level of 68.6 per cent for 2015 is similar to that for 2012 (68.5 per cent). Underlying the steady overall rate, the female participation rate is forecast to rise from 62.8 per cent in 2012 to 63.6 per cent in 2015. The male participation rate is forecast to fall from 74.4 per cent to 74.0 per cent.

Female labour supply for 2013 to 2015 is forecast to rise by 72,000 compared with 37,000 for males. Underlying this are larger rises in both working age population and labour force participation rates for females.

Labour supply forecasts for 2013 to 2015 are mainly influenced by age groups showing:

  • participation rate changes: 55-59 (2.3 percentage points), 60-64 (3.0 percentage points), 65+ (3.2 percentage points), and 15-19 (-4.0 percentage points)
  • working age population changes: 20-34 (64,400), 50-64 (40,500), 65+ (53,300), and 35-44 (-13,600).

Labour supply growth by qualification is largely comprised of:

  • 44,000 “degree” qualified females (up 15.8 per cent)
  • 28,600 “school and level 1-3” qualified males (up 6.9 per cent)
  • 34,600 “school and level 1-3” qualified females (up 7.9 per cent).

Interestingly, participation rates show clear differences by qualification. Over the 21 years to 2012, these were typically:

  • 85 per cent for “degree” qualified
  • 77 per cent for “level 4-7” qualified
  • 67 per cent for “school and level 1-3” qualified
  • 49 per cent for unqualified.

Participation rates for males are generally higher than for females, but are almost the same for degree qualified persons.

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