Working Paper 06/04: Polarisation of Employment, 1986–2002: New Zealand in the International Context

In recent years, researchers have identified a growth in both “work-poor” and “work-rich” households in several OECD countries, including New Zealand. This growth indicates an increasing concentration of paid employment at the household level – “polarisation” – which represents a divergence between individual- and household-based measures of joblessness.

Several interrelated changes in the economy and the family have probably contributed to the growth in household joblessness and employment inequality internationally:

• household structural changes
• changes in gender relations and employment patterns
• differential effects of economic restructuring.

The contrasting concerns of controlling the growth of jobless households on the one hand and the growth of working-but-poor households on the other demonstrate the social policy challenges posed by the changes in the economy and family outlined above. Household joblessness and associated employment polarisation present challenges to social policy makers concerned about achieving social equality, alleviating poverty, distributing the benefits of employment across the population, and controlling the costs to the state of government-funded income transfers to individuals and families.

New Zealand’s overall trends in household joblessness and employment inequality over the 1986–2002 period generally followed trends in the health of the economy. In the mid-to-late 1990s, it appeared that household jobless rates would remain high despite the growth of employment amongst individuals. By 2002, however, the strong economic growth reduced household joblessness back to near the level seen in 1986.

However, other trends highlight areas of potential concern.

• Between 1986 and 2002, joblessness rose substantially among households in which all working-aged members were Maori.
• Household joblessness also became more concentrated in childrearing and prime-aged (25–49) households.
• New Zealand levels of joblessness and employment inequality are significantly higher than those of the US.

Taken together, our results suggest the importance for policy makers of keeping track of household joblessness in addition to standard measures of unemployment and joblessness at the individual level. Future research should be directed at understanding emerging patterns of population disparities in household joblessness, as well as the dynamics of household employment inequality.