Work is an important part of life for most New Zealanders. For nearly all of us, paid work – our own, our parents', our partner's – is our main source of income. Work is also one of the main ways people participate in society.
Good employment can transform lives, especially for families where welfare receipt and poverty are entrenched. It is also fundamental to better economic outcomes and contributes to improved living standards for all New Zealanders. Suitable, 'good work'  is work that supports wellbeing. It is work that is well rewarded and safe, and where workers have some reasonable control over how they complete their work. It is work where workers have some confidence in the amount of work and, therefore, the income they will receive. This is not the case for many New Zealanders (OECD, 2018b).
Skills are increasingly important to labour market participation and productivity in New Zealand, as in other OECD countries. A significant proportion of those on working-age benefits have obtained no or few educational qualifications. Skilled workers adopt innovations earlier and are associated with greater firm investment in knowledge-based assets, but New Zealand has a high incidence of skills mismatch and, consistent with this, among the lowest returns to education in the OECD (Conway, 2018).
While paid work remains as central as it ever was, how we work has changed dramatically since the Social Security Act 1964 and continues to change. The welfare system needs to be updated to fit the changes that have already occurred, the flexibility to cope with future change, and to support productivity and wage growth. In this chapter, we discuss what those changes should be.