The labour force participation rate (LFPR) is a measure of the adult population’s engagement in the labour market. It’s calculated as the sum of the employed and unemployed expressed as a percentage of the working age population.

The New Zealand labour market is currently characterised by high rates of participation. In the June 2023 quarter, the seasonally adjusted LFPR reached a record high of 72.4%.

What’s particularly interesting about the LFPR is that it is influenced both by short-term labour market conditions and longer-term changes in the economy and society. Take for example the rise in the labour force participation of females over since the 1950’s, as well as more recent rises in the participation of people aged in their 60’s. Both have been a key contributors to the record high rates we see today, alongside the strong job growth New Zealand has enjoyed before and during the COVID-19 pandemic.

Another key feature of the LFPR over the long term, is the decline over several decades of the male participation rate. I came across an article from the US recently which reported that part of this decline is due to more millennial men going to further education than baby boomer men did when they were the same age. This article prompted me to look at the New Zealand data to see if the same thing has occurred.

Stats NZ defines baby boomers as people born in the years 1946–65. To find data on labour force participation going back to the 1960’s I had to look in Stats NZ’s yearbook collection. There are yearbooks going back to 1893 and they are an interesting read if you are statistically inclined, with data on New Zealand’s population, labour market and education along with a host of other subjects.

And it’s not just the numbers themselves that are interesting. The kinds of things that have been measured over the years reflect who we were as a society back then. For example, compared with today, statistics from the 1950’s and 19060’s have more of a focus on ‘married’ women. They show, for example, that in the 1950’s female participation in the labour market dropped steeply when females got married (usually in their 20’s), reflecting societal norms about the age at which women were expected to marry and their withdrawal from the labour market thereafter to set up a home and start a family.

Using the yearbooks, I got data for (Census years) 1956, 1961, 1966, 1971, and 1976, and then used Household Labour force Survey (HLFS) data from 1986 onwards, enabling me to piece together a time series of male and female LFPRs for age groups back to 1956. There may be some differences in how the labour force is defined in the HLFS and how it was defined in the years before 1986 in the yearbooks. The yearbooks are a little sketchy on details such as technical definitions. If anything, they probably underestimate the LFPR prior to 1986 as it looks like the yearbooks might exclude the unemployed and people working fewer than 20 hours per week from their definition of the labour force.

Bearing differences in labour force definitions into account, the male LFPR was measured at 83.8% in 1956, gradually declined to a low of 73.0% in 1993, in the aftermath of the recession in the early 1990’s and has gradually increased (albeit with cyclical peaks and troughs) to 76.1% in 2023.

This broad downward-then-upward trend is mirrored and amplified among males aged 20-24 years, which suggests they have contributed to the overall trend. Among males aged 20-24, the LFPR was measured at 96.0% in 1956, was only a little lower at 92.4% in 1986, fell to 76.5% in 2010 in the aftermath of the Global Financial Crisis, and has since risen to 85.1% in 2023.

We don’t know much about the education status of successive cohorts of young men from the 1950’s through to the 1980’s. So, we can’t definitively comment on whether falls in their LFPR during that time are the result of more young men going into tertiary education rather than work. But there is circumstantial evidence. The Stats NZ yearbooks tell us that the number of people attending university grew from just under 10,600 in 1954 to just under 65,300 in 1990. We also know from the yearbooks that in 1978 some 28% of university students were males aged 20-24 years. So, in all likelihood, the dramatic growth in university students that occurred in New Zealand in between the 1950’s and 1980’s included growth in the number of males aged 20-24 years attending university. During this time, the tertiary education sector also included polytechnics and colleges of education. The total number of students attending polytechnics also seems to have grown significantly during this time.

A worrying trend is evident post 2010 which seems to mostly explain the rise in the LFPR among males aged 20-24 since then. As Chart 2 shows, the proportion of males aged 20-24 in work but not in education has risen from a low of 47.7% in the year to June 2010 to 61.5% in the year to June 2023.

Not that there’s anything wrong with being in work. But longer-term labour market outcomes tend to be better for young people who complete tertiary education. And the proportion of males aged 20-24 not in the labour force and in education (typically full-time study in a classroom) fell from a high of 17.9% in the year to December 2013 to just 7.6% in the year to June 2023.

The proportion of males aged 20-24 in work and in education (typically some form of industry training) is looking a little better. Having fallen from a recent high of 22.1% in the year to March 2016 to a low of 14.3% in the year to March 2019, it has since risen to 18.6% in the year to June 2023. No doubt aided by deep skill shortages, strong job growth, and subsidised industry training through schemes such as Apprenticeship Boost and Fees Free.

Looking at today’s world in the context of history gives us valuable perspective. But it is also important to be careful when making comparisons between today and earlier periods. New Zealand was a very different place back in the 1950’s and 1960’s. As we have seen, the growth of tertiary education was in its infancy, and social attitudes towards work, education, marriage and family formation were also different to what they are today, all of which had a strong influence on people’s behaviour and the statistics collected to measure that behaviour.