Appendix C: Statistical Definitions

Labour force

This is defined in both Australia and New Zealand as people aged 15 years and over currently employed for more than one hour a week. The proportion of the resident population identified in the Census who worked more than one hour a week in the reference period is identified in this report as the employment rate.

Industry classification

Industries in the dataset are coded according to the Australia and New Zealand Standard Industry Classification (ANZSIC06). Level 2 classification is the most detailed grouping used in this report. This enables the identification of 105 industry groups excluding those not elsewhere included.

An industry is defined as the type of activity undertaken by the organisation, enterprise, business or unit of economic activity within which a person aged 15 years or over is employed.

Occupation classification

An occupation is defined as a set of jobs that require the performance of similar or identical tasks. Occupations in the dataset are coded according to a skill-based occupation classification - the Australia and New Zealand Standard Classification of Occupations 2006 (ANZSCO6). Both Australia and New Zealand used this common occupational classification in 2006. Level 2 is the most detailed classification used in this report, which enables the identification of 43 occupation groups excluding those not elsewhere included. A feature of the ANZSCO occupation grouping is that it is skill-based and assigns each occupation to a skill level of 1-5. More detailed occupation classifications are available in both Australia and New Zealand, and trans-Tasman differences at more detailed levels are examined by Newell (2009).

There is a considerable difference in the size of the residuals in the New Zealand occupational classification, with 5.7% of the usually resident New Zealand workforce but only 1.7% of the usually resident Australian workforce unclassified to any occupation on the respective Census nights. This difference is due to Australia using more rigorous occupational capture and coding methods as well as making more assumptions regarding the occupation a worker might belong to.

Although Statistics New Zealand and the Australian Bureau of Statistics (ABS) both use the aligned ANZSCO classification, there remain some differences in defining occupations in both countries. In addition, the ABS use different methods to code responses and use several more flexible categories not used in the New Zealand Census such as '10 - Managers not further defined'. This meant that 3,769 New Zealanders working in Australia in 2006 (1.5% of the total New Zealand born workforce) were classified into categories that were not used in New Zealand at the 2-digit level. These were not included in detailed occupation-based comparisons. There is a slightly greater tendency for people recorded in the New Zealand Census to be coded as managers.

Rounding and Percentages

Rounding is used in all Census datasets, therefore grouped totals are not always identical. Percentages that exclude missing values from the population denominator are noted.

Highest qualification achieved

A qualification is a formally recognised award for education and training attainment. In New Zealand and Australia, each secondary school and post-school qualification is assigned to one of 10 levels on the National Qualifications Framework, with the level depending on the complexity of the skills and knowledge that are being recognised. Level 1 qualifications are the least complex and are open-ended downward to capture all learning. Level 10 is the most complex. The levels do not equate to years spent learning but reflect the content of the qualification.

The highest qualification achieved used in this report comes from both Censuses. A detailed definition of which New Zealand qualifications are coded to each level in New Zealand is in the Statistics New Zealand website at: http://www.stats.govt.nz/methods_and_services/surveys-and-methods/classifications-and-standards/classification-related-stats-standards/qualifications/appendix-1.aspx.

The derivation of the three broad groupings used to compare New Zealand and Australian qualifications is shown in Table A2 (Appendix A).

The groupings have been made broad to allow for considerable trans-Tasman differences in the educational systems and the way the data is collected. For example, some New Zealand qualifications acquired beyond school but below degree level appear more likely to be coded to levels 1-3 whereas, in Australia, they tend to be at level 4. In addition, not all certificates gained at school were able to be separated from those gained post-school. As a result, qualifications achieved at levels 1-3 and 4-6 are grouped together as post-school qualifications. The N/A cells in Table A2 indicate an incongruence where there was no equivalent entry in the Australian dataset.

Field of study

The field of study represents the main topic or field of study of a qualification. Education field of study is a hierarchical classification of three levels. Excluding residuals, level 1 (broad fields) has 13 categories, level 2 (narrow fields) has 72 categories and level 3 (detailed fields) has 379 categories.

The grouping used in this report are at the level 1 (broad) level, based on the New Zealand Standard Classification of Education - Field of Study v1.0 which is very similar to the broad grouping used in Australia. 'Subject' applies to a post-school qualification, not to a secondary school qualification. There are 11 standard outputs and 78 detailed for post-school subjects used in both Australia and New Zealand. Only standard outputs are shown here.

Ethnicity

This study does not include ethnicity as a variable among the New Zealand born. However, findings tend to support those of other studies that show a strong Māori dimension to emigration to Australia, given Māori are over-represented in lower to medium skilled occupations where New Zealanders are more likely to be working in Australia.

Skill level groupings

The ANZSCO occupation coding defines five skill levels based on formal education and training, previous experience and on-the-job training. In general, growth in the range and complexity of the tasks involved, the amount of formal education, previous experience and on-the-job training required to perform the tasks increases the skill level. Table A1 (Appendix A) shows the skill level given to each 2-digit ANZSCO occupation, with 1 being the highest and 5 being the lowest. In a few cases, a composite or average skill level is shown if variable skill levels were allocated at a 2-digit occupational level.

Permanent and long-term arrivals and departures

Permanent and long-term arrivals and departures are the official measure of New Zealand's migration flows. It includes people who arrive in New Zealand intending to stay for a period of 12 months or more, plus New Zealand residents returning after an absence of 12 months or more. Included in the former group are people with New Zealand residency as well as students and holders of time-limited work permits. The PLT departures include New Zealand residents intending to depart for 12 months or more plus overseas visitors departing New Zealand after a stay of 12 months or more. The PLT series that identifies New Zealanders by country of birth is available back to 2001. As noted in Section 1.2, figures are affected by 'category jumping', which occurs when some New Zealanders heading for Australia change their category from permanent and long-term to short-term or vice versa after leaving the country. These impact on the reliability of trans-Tasman migration data. Some studies suggest that this led to an understatement of migrant return flows to New Zealand in 2002-2006 in particular.

Census income and purchasing power parity (PPP)

Total annual personal income is collected from the Census in both New Zealand and Australia. It shows annual gross income earned from all sources, such as dividends and superannuation, not just from wages and salaries. Income by occupation is the average earned for all members of the group regardless of hours worked. Occupations where a higher proportion are employed full-time are therefore more likely to receive higher incomes. People employed on a full-year basis also tend to have higher incomes than those employed part-year.

Purchasing power parities (PPPs) provide an internationally recognised way of converting different countries' measures into a common currency unit and price. The PPPs are a measure of the relative domestic prices of the components that form GDP in each country. Because prices are directly observed rather than inferred through exchange rates, more meaningful comparisons can be made between the volumes of goods and services purchased in different countries. It therefore accounts more robustly for differences in the relative cost of living in different countries. The 2005 benchmark year results - the PPP indexes for final expenditure on household final consumption - were calculated as 139 and 152 for Australia and New Zealand respectively (OECD = 100).[44]

To compare Australian income with New Zealand income, the two indices are divided, i.e. an income of NZ$30,000 multiplied by a ratio of 139/152 equals A$27,434 in Australian household consumption terms. Conversely, an income of A$30,000 multiplied by 152/139 represents an income of NZ$32,806 in New Zealand household consumption terms.

While a PPP measure of relative incomes is imperfect, it is superior to exchange rate-based comparison, which is influenced by external factors such as terms of trade. The chosen benchmark year was the 2005 calendar year, which is likely to be the best match against 2006 Census data, as the New Zealand Census asks for income in the 12 months ending on 31 March 2006 whereas, for Australia, it was the 12 months ending on 8 August 2006. A weekly income comparison would have been preferred, but while the Australian form collects weekly income, the New Zealand form does not.

The PPP adjustments to gross annual incomes do not account for inter-country differences in tax, social assistance and income support provisions, insurance levies and other deductions and therefore should be interpreted with caution. There are many important differences in taxation between the two countries. For example, there is greater progressivity in the personal income tax scale in Australia - lower marginal tax rates at lower incomes and higher tax rates at much higher incomes (New Zealand Institute of Economic Research, 2006). Another factor to consider is the very large variation in wage levels that occurs across geographical locations in both New Zealand and Australia.

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^[44] For more discussion on the Eurostat PPP methodology used by Statistics New Zealand, see http://www.stats.govt.nz/Publications/Prices/purchasing-power-parities.aspx.

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