Labour supply in New Zealand and Australia: 1919-1939

Abstract

This thesis is a study of the New Zealand and Australian labour markets in the years between the First and Second World Wars. Its specific focus is on the reasons why people entered or withdrew from the workforce. In other words, it focuses on choices made by households with regard to alternative activities of which employment is but one. While the research is based on drawing parallels between the experiences of New Zealand and Australia, the emphasis of the study has been to use a wide range of material to measure and monitor the New Zealand workforce. There are three main innovations in the approach taken by this study. First, it is not a standard comparative exercise. While Australian data and literature are used to establish the plausibility of the findings with respect to New Zealand, Australian data are also used as the basis for deriving workforce and employment estimates for New Zealand in years when there are no New Zealand data. In particular, the Australian census taken during the Great Depression in 1933 is used to estimate New Zealand employment and unemployment levels. Second, much of the research focuses on alternative activities usually associated with people within specific age ranges or a specific gender. Such activities include schooling, child-rearing, and retirement. Third, labour supply behaviour is interpreted through the theoretical framework of the additional worker model. The model focuses on the role of households rather than individuals as suppliers of labour, emphasising both the need of households to supply additional labour when their real disposable incomes are falling and the ability of households to withdraw or withhold family members from the labour market at times when a single breadwinner is able to support the entire household. A study of factory employment and earnings is conducted as a means of following annual changes in labour market activity. The technique of wage overhang is applied to the manufacturing sector, making it possible to reject the view that women constituted an expendable "reserve army", easily discarded during periods in which economic activity was slow and available for exploitation at times of peak demand. By combining a study of annual factory employment data with census workforce data, this thesis produces annual estimates of employment, workforce participation and unemployment in New Zealand. The estimates are disaggregated into four groups: adult males, adult females, male minors and female minors. This study concludes that the level of joblessness in New Zealand during the Great Depression was much more widespread than has been acknowledged in previous quantitative studies. This conclusion is based in part on the rejection of the term "unemployment" as it is defined today; a term which provides little understanding of the variety of circumstances faced by and responses of those people who could not find regular employment.