Long-term unemployment as at March 2021

In the March 2021 quarter, there were 15,800 people in long-term unemployment, Stats NZ said today.

In the March 2021 quarter, the unemployment rate, as measured by the Household Labour Force Survey, was 4.9 percent (not seasonally adjusted), up from 4.5 percent for the same period last year. The number of unemployed people increased to 142,000 (up 13,300).

Within this group, 11.2 percent of all unemployed people were in long-term unemployment. Long-term unemployment refers to unemployed people who say they have been looking for a job for more than a year.

Paid employment plays an important role in a person's wellbeing. It not only provides income and financial security but can also provide important social connections and contribute to a person's sense of purpose, social identity, and overall wellbeing.

"Those who are unemployed consistently report lower levels of wellbeing across a number of measures and it may be that this is more pronounced for those in long-term unemployment," labour market manager Andrew Neal said.

The March 2021 quarter showed that there were 15,800 people in long-term unemployment, up 4,800 compared with the March 2020 quarter. However, this annual change was not statistically significant. If there are any changes to long-term unemployment because of the COVID-19 pandemic, they will be measured in coming quarters, when a full year has passed since observing the initial impacts of COVID-19 on New Zealand's labour market.

Long-term unemployment after economic shocks

While we have yet to publish a year's worth of data following the initial effect of COVID-19 in New Zealand, we can look at impacts on long-term unemployment from previous economic shocks like the early 1990s recession, the Asian financial crisis, and the global financial crisis (GFC).

Long-term unemployment rose sharply during the late 1980s and early 1990s, as New Zealand underwent a period of economic restructuring and reform, and peaked in March 1993, following a global recession in 1991/92, with 57,600 people in long-term unemployment.

The number of people in long-term unemployment increased again in 1998/99, due to the impacts of the Asian financial crisis in 1997, coupled with two successive severe droughts in 1997/98 and 1998/99.

Around the time of the GFC in 2008, the number of people in long-term unemployment increased significantly from June 2008 onward as people struggled to secure a job. From June 2009 to June 2010, there were statistically significant increases in the number of people that were unemployed for more than a year.

Characteristics of long-term unemployment

When analysing the characteristics of long-term unemployment, it is important to note that the estimates being examined are small numbers and carry large sample errors. This is because the data is produced from a representative sample survey, not the whole population, which results in some uncertainty. Although many of the differences between groups were not statistically significant in individual quarters, it is possible to observe indicative trends over time.

Long-term unemployment by sex

Over the last 10 years, long-term unemployment has occurred fairly evenly between men and women. In the March 2021 quarter, there were 8,400 men and 7,400 women in long-term unemployment.

Long-term unemployment by age

In the March 2021 quarter, the rate of long-term unemployment for those in the age group 35-44 years was 18.5 percent, followed by those aged 55-64 years, at 17.5 percent. Typically, people over the age of 35 years tend to have higher rates of long-term unemployment.

Long-term unemployment by ethnicity

None of the broad ethnic groups examined (European, Māori, Pacific peoples, or Asian) showed significantly different unemployment rates to one another, and all have been tracking broadly downward in recent years.

Stats NZ will continue to collect and publish data on levels of long-term unemployment by sex as part of the unemployed by duration series, updated each quarter on Infoshare as part of the labour market statistics release.

Labour market statistics: June 2021 quarter will be released on 4 August 2021.