Tracking Living Costs for Seniors – CPI or HLPI?

Judith A.Davey


Most people will have heard of the consumers’ price index (CPI), which tracks changes to the prices of items that New Zealand households buy and so provides a measure of inflation. The CPI is used by the Reserve Bank to guide monetary policy; to adjust welfare benefit rates, and by employers and employees in wage negotiations. It can help to show how adequate incomes are in relation to price rises, which is especially important for older people, most of whom have fixed incomes with little opportunity to supplement them.

Statistics NZ has been measuring consumer prices for 100 years, but the goods and services measured in the CPI have changed, reflecting the changes in New Zealand society.

“In 1914 we collected prices for sago, tapioca, treacle, and tripe. Washing machines were added to the CPI in 1949 followed by refrigerators in 1955, televisions in 1965, and home computers in 1988[1]

It took until 1955 to include private motoring and beer in the CPI basket of goods and services and a further 20 years for wine and spirits to be included. There are now 11 CPI groups: food, housing and household utilities, health, recreation and culture, education, communication, clothing and footwear, transport, alcoholic beverages and tobacco, household contents and services, and miscellaneous goods and services.

Over the 100 years, prices for consumer items have increased 7,500 percent. Annual inflation averaged 4.4 percent. It was in double digits from 1973 to 1983, peaking at 19 percent in 1987, when GST was introduced.

In the 1990s a superannuitants’ price index was published. This showed a faster rate of inflation for renters than owner-occupiers. This index was discontinued in 1999. Due to aggregation and averaging, it did not show a great deal of difference from the general CPI, especially for home owners.

More recently a new set of household living-costs price indexes (HLPIs) have been developed, which track inflation as experienced by 13 different household groups.[2] One of these is superannuitants, but the groups also include beneficiaries and Maori. There are five groups of households according to level of expenditure.

The HLPIs arose out of consumer consultation by SNZ, which pointed out that the CPI was a macroeconomic indicator and an aggregate measure, rather than truly reflecting the living costs of households. For example, the CPI does not include mortgage interest payments, only the cost of purchasing new dwellings. What was needed were extra indexes to reflect changes in the purchasing power of incomes for different demographic groups. Data from Household Economic Survey in 1973/74 made constructing special indexes for particular household groups technically feasible. The data for these measurements began in the June 2008 quarter.

Superannuitant households are where the highest-income recipient receives a New Zealand government pension[3]. The figures show that these experienced the highest annual price change over the over the first years of the HLCIs.

The most recent HCLI data is for the September 2017 quarter, released on 27 October.

Household Living-costs price indexes, recent rises: –

                                                                      September quarter       Annual change 2016-2017

Lowest expenditure household [4]          0.8%                                 2.6%

Superannuitants                                            0.9%                              2.3%

Households overall                                        0.6%                            1.9%

This shows that cost inflation for the lowest-spending households increased 2.6% in the year to September 2017, well ahead of households overall (and especially the highest spending group, at 1.5%). Superannuitant households also had higher cost inflation rates, especially in the September quarter.

According to Stats New Zealand, poorer households experienced a greater impact from increased prices for rents, insurance, cigarettes and tobacco. Do you think that this also applies to superannuitant households? If not, what made their price inflation higher than average? High home-ownership costs have played a part – for rates and insurance – as most superannuitants own their homes. Local authority rates for the September 2017 quarter rose 3.4%, reflecting an annual increase. For superannuitants the cost of rates is a larger proportion of total expenditure than it is for other groups.

High-spending households benefitted from decreased prices for telecommunication services and audio-visual equipment, which may be seen as luxury items.

I welcome your comments about what might be causing these differences and if the HLCP Indexes are more useful than the CPI. We need to keep an eye on these measurements to see how they relate to the adequacy of retirement income.





[2] Household living-costs price indexes: Background

[3] Similarly, beneficiary households are where the highest-income recipient receives a benefit payment.

[4] The lowest 20% in terms of household expenditure.

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Progression of Feelings about University Study  


Judith A. Davey


As the 60-plus students thought about their university experiences, there was a typical sequence of emotions.


Several were very unsure of themselves and their abilities at first. Lillian and Stan feared that their study skills would be out-of-date. Geraldine had thought “you had to be very clever – super intelligent – to go to university”. Frequently this was related to their age and the feeling that they would not “fit in” with the school-leavers at Victoria University.


As the older people moved into their courses, many of their fears proved unfounded. They adjusted and began to enjoy their study and interactions with younger and mature students.

I have been treated as “normal” by students and staff and in no way patronised. To me this was a surprise and a delight. (Stan)

You have to make an effort to fit it, not to take over in seminars, to listen. But the younger students were very tolerant and I have met some wonderful mature students. (Lillian)


Joy and excitement clearly shone through when interviewees spoke about their study experiences, especially the women.

It’s a lot of fun and I am having a wonderful time. I get more of an adrenaline rush with this research than with any job I could go for at my stage of life. (Katherine)

It’s magic – I really like history. People said “you’re drooling”.  I came away angry with dead teachers who only told us one side of the story. Study is addictive – now that it is over I am grieving. (May)

I found it liberating, exciting. In fact I need to get less excited. I fizz along too much. (Lillian)

It’s really heady stuff. Study has become a way of life. I can’t put it down. (Joan)

I almost felt like clapping in some of the lectures. (Stan)

Others were more measured in their reactions, but still talked about the pleasure of learning; the new vistas which their studies had opened up for them; the challenges, but also the stimulation when their abilities met the test.

Confidence and Self Esteem

Despite barriers and difficulties, for the majority of respondents university study ultimately became a source of confidence, respect and credibility and a boost to their identity as retired people. Even those who had lacked self-confidence initially began to feel they were proving themselves. In his music course, John was forced not only to compose a piece, but to sing his own song. He rose to the occasion:

They got me doing things I never thought I would.

Interviewees were proud to report the respect which study gave them and their families’ support. Diana’s children all had degrees and her husband was a retired scientist, still active in his field. She liked to feel that she was keeping up with him in her own way. Stan’s pleasure in learning was reinforced by knowing that “not only my children can do well.” Grace talked about her grand-daughter who is studying at another university.

She says “Grace, I like to see you doing that”. I think I encourage them, by obviously enjoying my study.

Cynthia also said her husband was secretly pleased at her achievements. She said jokingly – “He thinks it’s a bit of a hoot!” – but also felt that the satisfaction was shared by all her family. Nina felt that she was part of a family tradition of valuing education. All of her five children and now her ten grandchildren were well educated.

It shows my children and grandchildren that I am one of them. They tell people “my grandmother is at the university”.

Sheila summed up the pride in their achievements which infused many of the 60-plus students.

I am incensed when people just say, “I am doing some papers at Vic.” I say, “I am “working for a BA”. People say, “Are you really?” I like that. I have a new persona – university student.

This is not to suggest that everyone enjoyed such support. May’s daughter was horrified when her mother started a BA.  But her grandchildren were delighted and boasted about it. Others found their friends disinterested or even critical, but their confidence allowed them to ignore such attitudes.

Most of my friends think I am nuts. (Susan)

My friends almost sneered. They thought it wouldn’t last and said I would be bored. A lot of people still don’t know that I go to university; I try not to talk about it. (Stan)


For several of the interviewees, both men and women, the pleasure and satisfaction which they derived from study brought almost guilty feelings. Grace considered that she was being “wickedly self-indulgent;” Deirdre that she was “egotistical and self-centred”. These feelings were linked with a somewhat puritanical view that it could not be quite right to enjoy something so much, or that time should be spent in more altruistic pursuits. To counteract the feeling, interviewees frequently expressed the view that studying is good for older people, providing stimulation and structure in retirement. John’s mother died of Alzheimer’s disease. He was clear in his view that senile decay is staved off by activity.


Thus, looking back over their university experience, the interviewees mostly expressed high levels of satisfaction with their choice of courses and course content. Only a few expressed some dissatisfaction with teaching and assessment, and only four were dissatisfied with their own performance at university. Lillian and Stan felt that they were not thinking as quickly as when they were younger, but Joan was realistic – “Study is addictive, one always wants to do better.

Overall, I hope I have shown that educational involvement can indeed assist the transition to retirement and contribute to successful ageing in the psychological sense.



[1] Davey, J., Neale, J. and Morris Matthews, K. (Eds.) (2003) Living and Learning: Experiences of University after Age 40.  Wellington, Victoria University Press.

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Coping at University as an Older Person

Judith Davey


Once at university, the 60-plus students faced a range of factors, which impinged on their view of themselves as students and retired people[1]. The majority mentioned barriers to achieving their study objectives. These concerned life situations, especially time constraints. Comparatively few mentioned money as a personal problem, but several commented that study was an expensive business for retired people.

Barriers, arising from university systems and facilities were sometime mentioned. Diana complained about library restrictions and John about a shortage of computers. Some of the post-graduate students were having problems with supervision – finding appropriate supervisors; being accepted by the department; and the assessment system –

It has taken so long to get the second examiner’s report in for my thesis. I feel disappointed, isolated and frustrated – it has already taken some of the shine off. (Cynthia)

Thus far, these barriers were shared by adult students in general. But some were more clearly age-related. Students aged 60-plus were more likely to mention health problems, less effective memory and lower energy levels. Katherine found it hard to climb uphill to some of the classrooms. Rose and Sheila complained of lack of energy and arthritis. The men in particular suggested mental disadvantages, especially poorer memory, slower and less reliable thinking processes. As a result, examinations were almost universally stressful and difficult.

The head doesn’t work quite as well as it used to. (Trevor)

Older people are not as quick, more anxious, worry a lot. (Joan)

Despite the high proportion citing disadvantages for older students, almost all the 60-plus group thought that there were advantages. Life experience was stressed. This could bring greater tolerance and breadth of vision.

Older students bring life experience – they can see what authors are on about, how their minds work. Young ones are quicker and brighter and do get A’s, but they have tunnel vision. They see everything in black and white. (Rose)

Fewer distractions, ability to focus more, hormonal level zilch and I can spell. (May)

Don and John considered that older students could get on better with the university staff. Rae said that study keeps you mentally alert – “otherwise you would seize up like an old car”. In a more practical vein, several interviewees mentioned that students 60-plus had more time and fewer family demands to cope with. However these barriers were not completely absent.

There were a few comments about attitudes towards older people at university. Some felt a lack of opportunity to draw upon their experience or have opinions respected. Others found that relationships with younger lecturers could be difficult –

You can seem presumptuous and making things difficult. (Chris)

 Young people are embarrassed to tell older people what to do or feel they will become domineering. (Don)

Only Geraldine, however, felt that she had suffered seriously from ageism and sexism –

Members of staff do not take one as seriously as younger students. Mentoring is not as available for older students in my experience.

Thus, apart from accepting the physical and mental effects of age, the 60-plus students did not perceive any greater barriers to educational involvement than people in the 40-59 age group, and their attitudes were equally positive.

Outcomes of study

Apart from a boost to confidence and self-esteem, what else emerged from the experiences of the 60-plus group at Victoria University?

Gaining a qualification

It has been assumed that older learners are not interested in qualifications, grades and competition. This did not ring true in the Victoria University study. Retired people may want qualifications for personal accomplishment and satisfaction.

I achieved more than I expected of myself. It’s the satisfaction of achieving a degree and pleasure of study. Without a purpose I would rot away. (Laura)

The qualification is not important but it is important to finish for my self-esteem. (Katherine)

A smaller group felt that the degree was not an end in itself –

A BA is not important but I can’t see the point of flogging your way up there (to university) without there being something at the end. (Sheila)

Or even that it had become devalued –

It is not important for me to get a degree – a BA doesn’t have the aura it had years ago. It means nothing now; it’s not rare. (Chris)

Further Study

Many of the interviewees had considered that they were “not very bright”, but proved otherwise.  Several regretted not having studied more when they were younger. But this did not deter them from further study. Rose, Sheila and Joan were considering embarking on PhDs, but all had some reservations, in terms of their abilities, energy and financial resources. Others were contemplating further courses on an ad hoc basis. For example, Chris was seeking to move out from language study into (to him) more challenging areas such as philosophy and linguistics.

Advice to other older students

The respondents were asked what advice they would give to older people contemplating university study. The overall response was unequivocal encouragement.

Do it now. You don’t get any younger. (Katherine)

Go for it. Life begins at university. You can do it! (May)



[1] See Davey, J., Neale, J. and Morris Matthews, K. (Eds.) (2003) Living and Learning: Experiences of

University after Age 40.  Wellington, Victoria University Press.


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University Study in Retirement – Choices and Balance

Judith A. Davey


Why university study? Many of the 60-plus interviewees in our Victoria University study[1], who had not previously been at university expressed a long-held desire for study at this level, and for those who had been before it was an obvious choice for learning. Several people had tried distance learning but found it isolating and others were not satisfied by community-based classes. There were several comments on U3A courses, which were seen as low level and non-participatory.

Why study at all and why these subjects?

These questions are difficult to separate. For some interviewees the answer was a desire to pursue an interest of very long standing – either work-related, a hobby, or an aspect of personal experience. Work-related interests were not to the fore, although Don was taking BCA to update his accountancy skills and Katherine and Carl chose courses relating back to their careers as a political writer and a chaplain. Building on a long-term hobby was the motive for John. He had been playing the clarinet for 30 years and now he was retired he wanted to know more about the technical aspects of music so that he could adapt and arrange music for his group of amateur players. Lillian’s interest in art sprang originally from a paper on the Renaissance which was part of her history degree in the 1950s.

For some interviewees, the desire to study arose out of a comparatively recent interest. Trevor’s developed almost accidentally. Going to a recreational class on Polynesian dance led to university courses in Pacific languages and then a BA in anthropology and linguistics. Three years after her retirement, Diana went on a continuing education tour to Greece and Italy but was frustrated that she did not know more about what she was seeing. She went back to complete a degree in Classics. Experiences in other countries provided the impetus for some people. Chris went back to Italy to see people and places which he knew from the war and returned with a strong interest in learning Italian.

For several women, their most recent period of study represented a natural progression from earlier academic work. Laura picked up from her (1940s) studies in Latin and German and went on to complete an MA and a PhD. Geraldine completed her BA part-time while working and later an honours degree in English and Philosophy. When she moved into tutoring she was told she needed an MA. Rae is now working on an MA in Women’s Studies after completing her BA which she began in her 40s following the breakdown of her marriage.

How did study fit into life in retirement?

Did it provide a substitute for paid work? Several of those interviewed had very structured lives, of which study was only one part. Chris rose early and retired at 10, “regular as clockwork.” Others were clear that study provided structure in their lives. Deirdre had a work schedule, with breaks to buy a paper, do the crossword, meditate, walk and have a snooze. Some of the interviewees clearly saw university study as a job substitute and a means of giving structure to their lives –

After working for so long I could get lazy, so it’s good to have a routine. I go in 4 times a week – I just do it. (Susan)

 The University is “my club”. I come in most days and spend time socialising in the quad.  I sit in front at lectures and meet older students that way. (Don)

 The concept of study as a substitute for work can be carried further. Where people filled their lives with activity in retirement, they actually granted themselves “holidays” from it. Like paid work, the demands of study, even though freely chosen, can become onerous. Diana hinted at this –

Study does give structure to my life and this is important. I like the lectures, having lunch with people, getting out of the house, even the trip in to university by bus. It is good to understand what people are doing, not to feel shut out of the world. But sometime it’s a bit like slavery.

 She likened the completion of her degree to a second retirement, which she was sure she would manage better than her first.

Family and caring work occupied several of the interviewees, especially the women. Deirdre had 17 grandchildren, and some visited her daily. She found interruptions to her study bothersome, but she co-operated to enjoy the social contact.  Rose’s grandchildren also frequently came to stay – “I feel guilty when I have to say no to them when I have an essay due”. Grace was caring for her husband, who was severely limited by arthritis. She fitted her study around his needs, calling it “working in the cracks”.

All these examples show how people felt the need to remain busy in retirement, substituting study and other activities for career occupations, with overtones of a moral imperative. Nina made this clear –

I don’t find happiness in gambling (playing mah-jong) as my peers do. It’s a waste of time, I would rather read. Study gives me an aim and something to look forward to.


[1] See Davey, J., Neale, J. and Morris Matthews, K. (Eds.) (2003) Living and Learning: Experiences of University after Age 40.  Wellington, Victoria University Press

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University Study in Retirement – What influences people?

Judith A. Davey


Why would people in their sixties and beyond become university students? Surely work-related motives for study are left behind once people retire? Theories of human ageing can be useful in approaching these questions.


Status in our societies is mostly achieved through occupational prestige. After retirement this is difficult to maintain. The “identity crisis” theory of retirement, suggests that loss of occupational identity can be socially debilitating.  This assumes that paid work is the dominant factor in identity and that lost roles cannot be replaced. It is a very male interpretation of changes surrounding retirement and under-estimates other aspects of life such as family, friendships, unpaid and community work and leisure activities. Few people rest their entire identity on a single role.

Continuity and Substitution

The alternative ‘continuity’ theory suggests that people seek substitutes for activities left behind by ageing. Social contacts with family and friends or new activities such as leisure and education may be substituted for paid work, serving the same needs for self-esteem. Strands of life from the past may be resumed, interwoven and adapted. Substitution and continuity theory provide an alternative to the “disengagement theory” which gives a somewhat negative view of ageing, suggesting that it is a time of withdrawal from life.

What experiences and knowledge can people draw from to make these selections and adaptations? Work history, both paid and unpaid, is one influence. Family history and local culture are other important sources of continuity.

The 60-plus Group at Victoria University[1]

These ideas can be illustrated by the experiences of – students at Victoria University aged 60 plus, showing how study can contribute to maintaining a positive identity in retirement. People aged 60 plus represented a very small proportion of students at Victoria University who came into our study – only one in every 300; 21 were interviewed in depth, with ages ranging from 60 to 82.

Early education and influences on educational choices

Their initial education dated back to the 1930s and 1940s. Seven were early school leavers; some went straight into degree courses, but not all finished them at that stage; others went into some type of professional training, including nursing and teaching, or began “on-the-job” or apprenticeship training.

Gender expectations were prevalent at the time and could cut across class. Sheila’s father was an accountant and she attended private girl’s school[2]. But her parents didn’t think that further education was important for a girl. Neither of Katherine’s parents had any secondary education. She gained School Certificate, but left school at 16 and took up typing because her parents could not afford to support her and her brother in education.

Parental aspirations could be more encouraging. Some working class parents were ambitious for their children. Trevor’s father was a farm worker. When he passed his scholarship for grammar school there was debate about whether he should take it up. His father thought he ought to go to work – further education would be too expensive. His mother disagreed and her view prevailed.

Decisions about leaving school and further education were also influenced by work opportunities. In the 1950s and 60s in New Zealand there was a labour shortage; jobs were easy to obtain and replace.

The Second World War affected many of the interviewees and their educational prospects. Rose’s father was killed when she was four. Her mother was left very poorly off with three girls to rear. So Rose had to leave school and go to work. Grace and Chris were nearing school-leaving age when the war began. Grace’s parents wanted her to go to university, but she opted for teacher training as more practical. Chris had intended to begin a law degree but instead left school, joined the army and did two years officer training. Before the end of the war, at age 19, he was with an engineering corps in Italy.

Subsequent Education

Some interviewees had long gaps in their education. Laura took her law degree, but did no other study from her early twenties until well after her retirement. Sheila completed four units of accountancy immediately after school, but did not go back to formal study until she left work.

For several, especially the men, ongoing study was encouraged as part of their careers. Examples include Trevor in personnel management; Chris (army), Carl (church ministry) and several of the female teachers. Others, however, made a personal effort to study. Lillian abandoned her MA when she married, but took extra-mural papers while she was at home with her children. Joan gave up her music degree for similar reasons, but took continuing education music courses while caring for her family.


The group’s experience of retirement was variable. Some reached a set retirement age for their workplace or negotiated an agreed time with their employers. Others were less willing to give up work. Diana left teaching at 63 after feeling pressure from her colleagues who thought that younger people needed the work. Grace remained in distance education until she was 72, when a requirement to upskill seemed like a signal to go.

Some people started their courses very soon after retirement, but others delayed their studies for several years. For Deirdre the trigger was the death of her husband, when she was 73.

Four interviewees were already studying at university level at the time of retirement. For John and May this was overtly “in anticipation of retirement.” Susan and Grace were working part-time on their BAs, over a number of years. Several did not consider themselves retired. However all were working only part-time and had either left or did not have a career job.

So why university study? This will be covered in my next blog.


[1] See Davey, J., Neale, J. and Morris Matthews, K. (Eds.) (2003) Living and Learning: Experiences of

University after Age 40.  Wellington, Victoria University Press.

[2] The interviewees have all been given pseudonyms for reasons of confidentiality.

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Older People are working longer – where, what and how?

Judith A. Davey 8/09/17

In a previous blog I talked about how the population may change in future, looking at Statistics New Zealand projections. One important trend is the increased participation of people aged 65 and over in the paid labour force. In 2015 I published quite a few blogs on this as I was then involved in a project called Making Active Ageing a Reality.[1] But these did not present information on the industries which older people are working in, their occupational categories or hours of work.

I won’t go over general trends again, but look at industry and occupation data for people 65 plus and full-time/part-time participation from census data.

Industry categories

Older workers, 65 plus, are spread over a wide range of industries, few of them reaching 10% of the total. The largest grouping is in agriculture, forestry and fishing – 14%. This is nothing new and mainly reflects the fact that farmers, most of whom are self-employed, tend to “stay on”.  They can regulate their own working hours and bring in labour for tasks which they cannot or do not want to continue doing themselves. There has never been compulsory retirement in the farming sector.

The next highest category is health care and social assistance – 11% of workers 65 plus. This includes doctors, nurses and allied health workers, as well as paid carers and support workers. This is significant given the importance of these groups for the ongoing health and wellbeing of our population. If these workers are ageing there may be shortages of skills when they leave the workforce. According to a Health Workforce New Zealand report,[2] 40% of doctors and 45% of nurses in this country are aged 50 or over. And 54% of the “non-regulated” health workforce – care and support workers – is in the 45 to 64 age group.

A number of further industry categories account for about 6% each of the 65 plus workforce – education and training; retail trade; manufacturing; professional, scientific, and technical services.

Occupation Categories

Older workers are also found in all occupations, mostly in skilled categories. They are clustered in the following table.

Workers 65 plus Number %
     Managers and executives 25044 22.1
     Professionals, including health and education 22896 20.2
     Clerical and admin workers 12180 10.7
     Machine, stores, drivers 11385 10.0
     Labourers and factory workers 11199 9.9
     Skilled technicians and trades 10854 9.6
     Care and service workers 10731 9.5
     Sales workers 9030 8.0

Source: 2013 Census of Population

The largest categories tend to be managers and professionals, likely to have qualifications and to work in an office environment. These are the “choosers” – see later.

 Full-time and part-time work

The image of older workers tends to be that they will work part-time. This is not totally borne out by the figures. While women are more likely to work part-time than men, there have been some interesting movements in patterns of work over the last three censuses (see table). For both men and women there have been increases in the proportions working full-time. This increase was especially marked in the 2006-2013 period. The proportion working part-time has correspondingly dropped for both men and women.

Full-time and Part-time percentages – Workers aged 65 plus, by sex

Groups % 2001 Census 2006 Census 2013 Census
Full-time Male 54 57 62
Female 32 34 40
Part-time Male 46 43 38
Female 68 66 60

As might be expected, the proportion of full-time older workers decreases with age to only 9% for women at 85 plus. But it may surprise some that one in four men who are working at the age of 85 plus are working full-time, probably farmers again.

Percent of total employed working full-time, by age and sex, 2013 Census
65-69 70-74 75-79 80-84 85 plus
Female 48 33 20 14 9
Male 72 54 38 30 25

The characteristics of people who are working after the age of 65 in New Zealand reflect categories which were suggested by the Centre for Research into the Older Workforce (CROW) in the UK.[3]

Choosers – this group is the most amenable to staying on in work. Most are managers or professionals, predominantly male, with high incomes. They often have choices whether to work or not, may do so mainly out of interest and can often stipulate their working conditions.

Survivors – who are motivated strongly by the need for an income. This group typically have few or no qualifications and are in routine and semi-routine jobs. They have little control over their working lives or leverage with employers. If they continue to work it may be in a lower paid and possibly insecure job.

Jugglers – “jugglers” are balancing domestic and caring roles (responsibilities to older parents/relatives and caring for grandchildren) with paid work. Almost all of them are women.  They are likely to work in intermediate occupations and to work part-time.

[1] Davey, J. (2014) “Paid Employment.” In Koopman-Boyden, P., Cameron, M., Davey, J. and

Richardson, M., Making Active Ageing a Reality: Maximising participation and contribution

by older people. Report to the Ministry of Business, Innovation and Employment. National

Institute of Demographic and Economic Analysis, University of Waikato, Hamilton.

[2] Health of the Health Workforce 2015, Wellington, Ministry of Health 2016

[3] McNair, S., Flynn, M., Owen, L., Humphreys, C. and Woodfield, S. (2004) Changing Work in Later Life: A study of job transitions. CROW, University of Surrey.

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Forecasts, estimates, projections and prognostications – how can we look into the future?

Judith Davey 3/7/2017

Statistics New Zealand (SNZ) is clear that it makes projections about the future, not predictions. Its projections are the outcomes of “various combinations of selected assumptions about future change in the dynamics of population change.” We can assume that trends will continue along the lines which they have established in recent times. Or we can factor in new directions based on emerging trends, overseas experience or “best guesses”.

We can’t be sure about what will happen in future with respect to –

Fertility      – (how likely is another baby boom?) SNZ thinks fertility will remain low.

Mortality     – linked to longevity, in which we hopefully expect further gains.

Projections cannot take into account factors such as catastrophes, epidemics, wars and government decisions which affect population trends. What about migration? There have been marked variations in movements in and out of NZ in recent years. Governments have some control over this, but what if all the expatriate Kiwis choose to come home?

I recently looked at projections related to the ageing of the populations – a trend which is very likely to continue. Here are some of my findings.

Changes in the age structure

We are likely to see a shift in the balance of children and older people in our population (see diagram). There are still more people under 15 than over 65. But the projections show that the lines will cross in about 2028 – just over 10 years from now. If the 65 plus age group continues its rise, by 2068 the NZ population will be made up of 28% under 15s; 24% aged 15 to 64; and 48% 65 and older.

Actual and projected figures for the under 15 and 65 plus populations


What will this mean for “dependency rates”?

These compare the proportions in the so-called “dependent” age groups with those of “working age” – 15-64. This is a somewhat outdated measure as people are staying in school or tertiary education for longer at the lower end (school leaving age is now 16) and people are remaining in paid work in greater numbers after the age of 65. Would 20 to 75 be a more realistic definition of the working age population? These changes will have implication for future labour and skills supply, which will have significant social and economic implications.

Change in the ethnic composition of the older population

In 2013 the age group 65 plus was dominated by Europeans (88%) and this is likely to continue into the future although in a less marked form (see table). All other ethnic groups will increase their share, with the Asian group rising to a percentage higher than that for Maori – 14% Asian and Maori 9%.

Population 65 plus by ethnicity, 2013 and projected 2033            

Ethnic group 2013 % 2033 %
European 88.3 77.3
Maori 5.8 8.9
Asian 5.1 13.9
Pacific 2.6 3.8

Note: The census allows more than one ethnic affiliation to be recorded, so the sum of these categories will be higher than the overall total.

Life expectancy at birth and age 65

It is important to distinguish between life expectancy at birth and at age 65. Life expectancy at birth has increased from 67 to 80 for males between 1950-52 and 2014-16. The corresponding increase for females is 71 to 83.

The increases are even more striking for life expectancy at 65. Life expectancy at 65 is higher than at birth as individuals reaching that age have avoided dying from illness and accidents which happen to younger people.

Life expectancy is expected to continue to increase, but there are many uncertainties. SNZ suggests that for people born in the mid-2010s perhaps 11% of males and 17% of females will reach the age of 100.

Falling home ownership

At present, home ownership peaks in the 60-74 age group, but has fallen for all age groups over the last three censuses, except for the age group 85 plus (see diagram). In the middle age range – 35-54 – the percentage of homeownership has fallen by 10 or 11 percentage points. Over the total population it has fallen from 74% in 2001 to 64% in 2013.

So in the future we can foresee more people moving into later life without owning and house or, given the rise in house prices, without having paid off a mortgage. This is likely to mean higher housing costs for them and more difficulty in achieving a good standard of living once out of the workforce.

ownership tender

Labour Force Participation

Over the last three census dates there has been strong growth in numbers of older people remaining in the workforce, especially in the 65-69 age group, and especially for men. These trends are expected to continue with people living longer and healthier and no compulsory retirement.

males vs females

Between 2015 and 2068, the total labour force is projected to rise from 2.5 million to 3.3 million. These projections suggest that the number of workers aged 65 plus will increase from 183,500 to 428,300 – by 174%, rising from 6% to 13% of the labour force.  At the same time the total workforce will increase by only 31% and the numbers aged 15-24 (new workforce entrants) will decrease by nearly 1%. From this I suggest that employers will have to acknowledge necessity of keeping their older workers on and providing them with the working conditions which suit them, such as flexible hours, recognition of eldercare responsibilities and ergonomic improvements in offices and factories.

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